Funding Programs
SBA Loans
SBA loans, also known as Small Business Administration loans, are a popular financing option for small businesses. These loans are provided by banks and financial institutions but are guaranteed by the SBA, a government agency that supports small businesses. SBA loans offer several advantages to small business owners, including lower interest rates and longer repayment terms compared to traditional bank loans.
General requirements for SBA 7(a) / 504 programs
Size Eligibility
7(a) & 504 Programs
Generally, the business must be small according to SBA size standards, which vary by industry.
For-Profit Status
7(a) & 504 Programs
The business should operate for profit and be engaged in, or propose to do business in, the United States or its possessions.
Operate in an Eligible Industry
7(a) & 504 Programs
Most industries are eligible, but there are some restrictions, such as financial businesses, lending, speculation, passive investment, pyramid sales, gambling, etc.
Use of Proceeds
SBA 7(a) Loan Use
- Working Capital
- Fixed Assets
- Debt Refinancing
- Expansion and Growth
- Start-Up Costs(subject to lender approval)
- Owner-Occupied Real Estate
SBA 504 Loan Use
- Purchasing land and land improvements.
- Constructing or renovating buildings.
- Purchasing long-term machinery and equipment.
- Economic Development Projects
Owner's Equity Investment
7(a) & 504 programs
Typically, the business owner must contribute at least 10% of the total project cost. This contribution can be higher depending on various factors.
Repayment Ability
7(a) & 504 Programs
The business must demonstrate the ability to repay the loan on time from its cash flow.
Personal Guarantee
7(a) & 504 Programs
Owners with more than a 20% stake in the business are typically required to provide a personal guarantee.
Good Character
7(a) & 504 Programs
The business owners must have good character and demonstrate the willingness to repay debts.
No Delinquency on Government Loans
7(a) & 504 Programs
The business should not be delinquent on any existing debt obligations to the U.S. government.
Merchant Cash Advance (Revenue Based Lending)
A Merchant Cash Advance might just be the solution for you! One of the key benefits of a Merchant Cash Advance is the speedy decision-making process, ensuring that you can access the funds you need without unnecessary delays. This option is also suitable for businesses with short trading histories, offering greater chances of approval compared to traditional bank loans. Moreover, the flexible terms provide additional convenience. However, it’s important to note that while MCAs offer rapid funding and adaptable requirements, they can be costly with high annual percentage rates. Despite these drawbacks, for immediate capital needs, a Merchant Cash Advance could still be a viable choice.
General requirements for merchant cash advance
Business Type
Must be a business that generates revenue through credit/debit card sales, such as retail stores, restaurants, or service providers.
Minimum Monthly Revenue
Typically, the business should have a minimum monthly revenue, often around $5,000 to $10,000.
Credit Card Sales History
A track record of consistent credit card sales is usually required, often for at least three to six months.
Time in Business
Many providers require that the business has been operating for a minimum period, often around six months to a year.
No Collateral Needed
Merchant cash advances are often unsecured, meaning they don’t require collateral. However, the provider may place a UCC lien on business assets.
Repayment Terms
Repayment is usually based on a percentage of daily,weekly or monthly credit card sales, with a fixed amount deducted until the advance and fees are repaid.
Invoice Financing
Invoice financing, also known as accounts receivable financing, is a financial solution that helps businesses improve their cash flow by converting their unpaid invoices into immediate cash. This form of financing is particularly beneficial for small businesses or startups that may face challenges in managing their working capital. With invoice financing, your business can get access to funds quickly, without having to wait for your customers to pay their outstanding invoices. You can use the funds to cover operational expenses, invest in growth opportunities, or simply maintain a healthy cash flow.
General requirements for invoice financing
Business Type
Typically, the business must be a B2B (business-to-business) or B2G (business-to-government) company that invoices its customers for goods or services provided.
Invoicing System
The business should have a consistent invoicing system in place, generating invoices for completed transactions.
Creditworthy Customers
Invoices should be issued to creditworthy customers, such as other businesses with a history of timely payments.
Minimum Invoice Amount
Many invoice financing providers have a minimum invoice amount requirement, which can vary but is often around $1,000 to $5,000.
Aging of Receivables
Invoice aging reports may be required to demonstrate the age of outstanding invoices and the average time it takes for customers to pay.
Length of Time in Business
Some invoice financing providers require the business to have been operating for a minimum period, often around six months to a year.
Volume of Invoices
Providers may have requirements regarding the volume of invoices generated each month, which can vary depending on the provider and the size of the business.
Repayment Terms
Repayment is typically made once the customer pays the invoice, with the financing provider deducting a fee or percentage of the invoice amount.
Debt Consolidation Loans
Debt consolidation loans can be a valuable tool for managing multiple high-interest debts. By combining various debts into a single loan or balance transfer credit card with a lower interest rate, owners can streamline their business finances, expedite payoff, lower interest rates, and reduce monthly payments. However, it’s important to carefully weigh the pros and cons before committing to debt consolidation. Factors such as credit score, financial habits, and the type of consolidation loan should be considered. Credit counseling can provide valuable support and advice on managing money and debt, helping business owners understand the reasons for their debt and negotiate with creditors. It’s essential to choose the right approach to debt consolidation to ensure potential cost savings and avoid potential risks associated with different types of consolidation loans. Speak to our financial advisors for assistance.
General requirements for debt consolidation
Business Type
Debt consolidation is typically available to various types of businesses, including corporations, LLCs, sole proprietorships, and partnerships.
Existing Debt
The business should have existing debts that it seeks to consolidate, such as loans, lines of credit, or credit card balances.
Minimum Debt Amount:
Some lenders or debt consolidation companies may have minimum debt amount requirements, which can vary.
Good Payment History
Generally, businesses with a history of making timely payments on existing debts are more likely to qualify for debt consolidation.
Financial Stability
Lenders will assess the financial stability of the business, including factors such as revenue, profitability, and cash flow.
Creditworthiness
While personal credit may not always be a primary consideration, some lenders may evaluate the creditworthiness of the business owner or key stakeholders.
Collateral
Depending on the type of debt consolidation loan or program, collateral may be required to secure the loan, such as business assets or personal guarantees.
Financial Counseling or Education
Some debt consolidation programs may require or offer financial counseling or education to help the business manage its finances better and avoid future debt issues.
Type of Debt
Debt consolidation can typically include various types of business debt, such as term loans, lines of credit, merchant cash advances, or credit card balances.
Repayment Terms
Debt consolidation loans often come with structured repayment terms, including fixed monthly payments over a specified term.
Commercial Real Estate DSCR loans
Are you looking to finance a commercial or multifamily real estate purchase? Consider DSCR loans! These loans are tailored to assess the property’s cash flow compared to its debt service payments, with a higher ratio indicating a better financial position. The application process is faster than other loans, solely relying on the property’s DSCR, not your personal financial history. Real estate investors can benefit from this loan type, as it considers rental income that may not be reflected in tax returns due to business deductions. DSCR loans offer a streamlined approval process and are suitable for properties intended for rental income, such as single-family residences and multifamily properties. With its accessible nature and benefits, DSCR loans are worth exploring for your real estate investment plans.
General requirements for DSCR loans
Property Type
DSCR loans are typically available for various commercial property types, including office buildings, retail spaces, industrial properties, and multifamily residential buildings
Property Condition
The property must be in good condition and meet all applicable building codes and regulations.
Loan Amount
DSCR loans are often for larger loan amounts, typically starting at several hundred thousand dollars and going up to several million dollars or more.
Debt Service Coverage Ratio (DSCR)
Lenders will evaluate the property’s DSCR, which measures the property’s ability to cover its debt obligations. A higher DSCR indicates a more favorable financial position.
Loan-to-Value (LTV) Ratio
Lenders will typically require a specific loan-to-value ratio, which represents the loan amount as a percentage of the property’s appraised value. Lower LTV ratios may result in more favorable loan terms.
Property Appraisal
An appraisal of the property is typically required to determine its current market value.
Term Length
DSCR loans often have longer terms compared to traditional commercial real estate loans, with terms ranging from five to 20 years or more.
Financial Documentation
Borrowers will need to provide financial documentation, including income statements, balance sheets, tax returns, and rent rolls for the property.
Equipment Financing
Equipment financing offers numerous benefits for businesses looking to acquire new assets. By opting for financing over cash purchases, companies can optimize their cash flow and protect themselves from the burden of a hefty initial investment. Furthermore, financing equipment can help build long-term business credit, providing opportunities for future growth and expansion. With lower upfront costs, access to better equipment, flexible terms, and potential tax deductions, equipment financing proves to be a strategic financial move for businesses. It’s essential to consider factors such as creditworthiness and lender type before diving into an equipment finance agreement. Consulting with our licensed professionals can provide valuable insights and ensure a smooth financing process.
General requirements for equipment financing
Business Type
Equipment financing is typically available for various types of businesses, including startups, small businesses, and established corporations.
Intended Use of Funds
Funds must be used specifically for purchasing equipment or machinery necessary for the operation of the business.
Equipment Type
Equipment financing can cover a wide range of equipment types, including but not limited to machinery, vehicles, technology, medical equipment, and manufacturing tools.
Creditworthiness
Lenders will assess the creditworthiness of the business owner or the business itself. This evaluation may include factors such as credit history, income stability, and overall financial health.
Down Payment
Depending on the lender and the specific financing arrangement, a down payment may be required. This can vary but is often around 10% to 20% of the equipment’s purchase price.
Equipment Value
The equipment being financed serves as collateral for the loan, and its value will be assessed by the lender.
Business Financials
Borrowers may need to provide financial documentation, such as income statements, balance sheets, and tax returns, to demonstrate their ability to repay the loan.
Equipment Inspection
Some lenders may require an inspection of the equipment to ensure it’s in good working condition before approving financing.
Business Age
While startups can qualify for equipment financing, some lenders may prefer businesses that have been operating for a minimum period, often around one to two years.
Term Length
Equipment financing terms can vary but typically range from one to five years, depending on factors such as the equipment’s lifespan and the borrower’s preferences.
Business line of credit
A business line of credit is a flexible financing option that allows businesses to access funds as needed, up to a predetermined limit. It provides a revolving source of capital that can be used for various business expenses, such as purchasing inventory, covering payroll costs, or investing in equipment. With a business line of credit, businesses have the ability to borrow and repay funds multiple times, making it an ideal solution for managing cash flow fluctuations and unexpected expenses.
General requirements for a business line of credit
Business Type
Business lines of credit are typically available for various types of businesses, including sole proprietorships, partnerships, LLCs, and corporations.
Business Age
While startups can qualify for business lines of credit, lenders may prefer businesses that have been operating for a minimum period, often around one to two years.
Revenue and Financial Health
Lenders will assess the business’s revenue and overall financial health to determine its ability to repay the line of credit. This may include factors such as income statements, balance sheets, and tax returns.
Creditworthiness
Lenders will evaluate the creditworthiness of the business owner or the business itself. This assessment may include factors such as credit history, payment history, credit utilization, and credit scores.
Minimum Credit Score
Many lenders have a minimum credit score requirement for business owners, which can vary but is often around 600 to 680 or higher.
Annual Revenue
Lenders may have a minimum annual revenue requirement for businesses applying for a line of credit. This requirement can vary but is often in the range of $50,000 to $200,000 or more.
Business Plan or Use of Funds
Some lenders may require a business plan or detailed information on how the line of credit will be used to support the business’s operations or growth.
Collateral
Depending on the lender and the creditworthiness of the borrower, collateral may be required to secure the line of credit. This can include business assets, personal assets, or a personal guarantee.
Bad Credit Loans
Are you a business owner with bad credit? Don’t worry, because there’s a solution for you – bad credit business loans! These loans are specifically designed for entrepreneurs who may have had financial setbacks in the past but are determined to get their business back on track. With bad credit business loans, you can access the funding you need to invest in your business, expand your operations, or even start a new venture. So, no matter how rocky your credit history may be, there’s still hope for you to fulfill your entrepreneurial dreams. Apply for bad credit business loans today and watch your business soar to new heights!
Loans available with no credit requirements
Equipment Financing
Loans specifically designed to purchase equipment or machinery for the business, where the equipment itself serves as collateral.
Invoice Financing (also known as Accounts Receivable Financing)
Financing based on the value of outstanding invoices, where the invoices serve as collateral rather than the business owner’s credit.
Merchant Cash Advance
A lump sum of capital provided to a business in exchange for a percentage of its daily credit card sales, with repayment tied to future credit card sales.
Purchase Order Financing
Financing provided to businesses to fulfill specific purchase orders or contracts, where the purchase order itself serves as collateral.
Inventory Financing
Loans specifically designed to purchase inventory, where the inventory itself serves as collateral.
Trade Credit
Supplier or vendor financing where businesses can obtain goods or services on credit terms, often with no or minimal credit checks.
Microloans
Small loans provided by non-profit organizations, community development financial institutions (CDFIs), or online lenders, often with more flexible eligibility criteria.
Working Capital Loans
These loans are specifically designed to provide businesses with the necessary capital to cover day-to-day expenses and maintain their cash flow. With working capital loans, you can ensure that you have enough funds to pay your employees, purchase inventory, and handle any unexpected expenses that may arise. So don’t let financial constraints hold your business back – take advantage of working capital loans and keep your business thriving.
Types of small business working capital programs
SBA 7(a) Loan
While SBA 7(a) loans can be used for various purposes, including working capital, they provide long-term financing with favorable terms for small businesses.
Microloan
Small loans provided by non-profit organizations, community development financial institutions (CDFIs), or online lenders. Microloans can be used for various purposes, including working capital.
Merchant Cash Advance
A lump sum of capital provided to a business in exchange for a percentage of its future credit card sales. It’s often used for short-term working capital needs
Inventory Financing
Loans specifically designed to purchase inventory, where the inventory itself serves as collateral.
Start up Funding
Securing loans for a startup can be an uphill battle, fraught with challenges and obstacles. Financial institutions and lenders often view startups as risky investments due to their lack of established track record and collateral. Additionally, the stringent credit requirements and documentation demands can further complicate the process, leading many entrepreneurs to feel discouraged or overwhelmed. However, with expert guidance and support, navigating this complex landscape can be simplified. Knowledgeable advisors can help startups understand their financing options, craft compelling business plans, and identify suitable funding sources. By leveraging their expertise and networks, entrepreneurs can increase their chances of securing the capital needed to fuel their business ambitions, turning daunting hurdles into manageable steps toward success.
Startup funding programs
Sba
The SBA stands for the Small Business Administration, a United States government agency established to support and assist small businesses. Its primary functions include providing access to capital through loans and grants, offering entrepreneurial development programs, advocating for small business interests, and facilitating government contracts for small businesses. The SBA aims to foster entrepreneurship and economic growth by empowering small businesses with resources, guidance, and opportunities to thrive in the marketplace.
Microloan
A microloan is a small loan, typically under $50,000, provided to entrepreneurs, small businesses, and startups to help them start or grow their businesses. These loans are often used for purchasing equipment, inventory, supplies, or working capital.
Microloans can be obtained from various sources, including:
- Small Business Administration (SBA): The SBA offers microloans through its Microloan Program, which provides funding to nonprofit intermediary lenders who, in turn, provide loans to small businesses and startups.
- Nonprofit Organizations: Many nonprofit organizations and community development financial institutions (CDFIs) offer microloans to support underserved communities and entrepreneurs who may not qualify for traditional bank loans.
- Online Lenders: There are online platforms that specialize in providing microloans to startups and small businesses. These lenders often have streamlined application processes and may be more accessible to businesses with limited credit history.
- Local Banks and Credit Unions: Some local banks and credit unions offer microloans to support small businesses in their communities. These institutions may have specific programs or initiatives aimed at supporting startups and entrepreneurs.
Personal loan
Using a personal loan to kickstart a business venture can be a viable option for aspiring entrepreneurs, especially if traditional business loans are out of reach due to limited credit history or business track record. By leveraging personal assets and creditworthiness, individuals can secure funding to cover startup costs such as equipment, inventory, or initial marketing expenses. However, it’s essential to approach this strategy with caution, as personal loans typically carry higher interest rates compared to business loans, and failure to repay could put personal assets at risk. Before proceeding, thorough research and financial planning are crucial to ensure that the business venture is viable and capable of generating sufficient income to repay the loan promptly. Additionally, entrepreneurs should consider consulting with financial advisors or mentors to explore alternative funding options and mitigate potential risks associated with using personal financing for business purposes.
Equipment financing
Startups often rely on equipment loans to acquire the essential tools and machinery needed to initiate operations efficiently. Whether it’s specialized machinery, technology infrastructure, or even vehicles, these loans provide startups with access to the necessary resources without requiring substantial upfront capital investment. By spreading the cost of equipment over time, startups can conserve cash flow and allocate funds to other critical areas such as marketing, hiring, or product development. Additionally, equipment loans often come with competitive interest rates and flexible repayment terms, making them an attractive option for businesses with limited financial resources. However, startups should carefully evaluate their equipment needs and budget constraints to ensure that the loan amount aligns with their operational requirements and growth projections. Thorough research, comparison of loan offers, and consideration of potential future needs are essential steps in leveraging equipment financing to support startup success.