Tag: Financing

When The Most Successful Companies Look for Fleet and Vehicle Financing … Here’s What They Do …

The Perfect Business Credit Portfolio Includes Vehicle Financing

Does your business need vehicles to get the work done? This can be any number of kinds of vehicles, such as trucks for deliveries and hauling, sprinter vans, company cars, and even vans to facilitate commuting for your employees. Vehicle financing can be a smart way to afford all of them.

Vehicle Financing in a Nutshell

Much like you probably didn’t buy your personal vehicle outright, financing is a great way to go in order to get a vehicle now, without having to wait until you can just pay cash and drive it off the lot. With a car for personal use, your choices are usually buying or leasing. Providers include banks like Bank of America or the financing arm of the manufacturer, such as Chrysler Capital.

Commercial vehicle funding has certain parameters. Whether a vehicle is purchased new or used will affect the number of years you can finance the vehicle and the rates you will pay. If a vehicle is used, then the number of miles on it will also affect terms. Plus, business owners may be required to personally guarantee vehicle loans.  If you are a co-borrower the loan will most likely report to your personal credit report. Some loans have a prepayment penalty and charge you for paying ahead.

In general, the following will eliminate the need to provide a personal guarantee for this type of financing: good business credit, a decent amount of time in business or good personal credit. And much like with any other kind of business borrowing, the more assurances you can give the lender, the better.

Basic Terms and Qualifying

You need to establish the amount of money you have for a down payment, and the vehicle you need. Plus, you must establish the costs associated with buying the vehicle.

You’ll need to provide documentation that proves you are the owner of a business. This includes business licenses, partnership agreements, LLC documents, and articles of incorporation (if applicable), listing you as having at least a 20% stake in the business.

You may also have to provide personal documentation like personal credit score and credit history. If you are a sole proprietor and the business is under your Social Security number, you are the borrower and guarantor. Hence you are personally liable for repaying the loan. It is also a good idea to have a loan proposal. A loan proposal should detail your business, loan needs, and financial statements.

Good Business Credit Can Help

If your company needs vehicles for operation build your business credit. This, way you will be able to qualify with no PG. Having this ability can give you the freedom to grow your fleet, and without your signature. More on this later. First, let’s look at those four keys to financing.

Demolish your funding problems with 27 killer ways to get cash for your business.

Vehicle Financing Key #1: Using Business Credit for Vehicle Financing

You can even finance a vehicle purchase or lease through our Business Credit Builder. These offers are in Tier 4, so these lenders will have certain requirements that business credit neophytes just won’t be able to meet. Lenders will want to see that you have the income to support the purchase. 

As an example, consider Ford Commercial Vehicle Financing.

Ford Commercial Vehicle Financing Through Credit Suite

Ford offers several commercial funding options. These include loans, lines, and leases to actual business entities. This is not for sole proprietorships. You can get a loan or a lease.

Ford may ask for a Personal Guarantee (PG)  if you don’t get an approval on the merit of your application. Apply at the dealership. Ford will report to D&B, Experian, and Equifax.

Ford Commercial Vehicle Financing: Terms and Qualifying

To qualify, you need:

  1. Entity in good standing with Secretary of State
  2. EIN number with IRS
  3. Business address- matching everywhere
  4. D-U-N-S number
  5. Business license (if applicable) and a business bank account

You will need to have a strong business credit history. And you must have a good Experian business credit score.

Demolish your funding problems with 27 killer ways to get cash for your business.

Ally Car Financing Through Credit Suite

Ally provides personal financing. But Ally will also report to business credit bureaus. If your business qualifies for financing without the owner’s guarantee, you can get financing in the business name only. Ally will report to D&B, Experian, and Equifax

Ally Car Financing: Terms and Qualifying

For Ally Commercial Line of Credit, to qualify, you need:

  1. Entity in good standing with Secretary of State
  2. EIN number with IRS
  3. Business address- matching everywhere
  4. D-U-N-S number
  5. Business license (if applicable)
  6. And a business bank account
  7. Bank reference
  8. Fleet financing references

If you use a personal guarantee, Ally will not report to the personal credit bureaus unless the account defaults.

With Ally Commercial Vehicle Financing, you can get a lease or a loan. To qualify, you need:

  1. Entity in good standing with Secretary of State
  2. EIN number with IRS
  3. Business address- matching everywhere
  4. D-U-N-S number
  5. Business license (if applicable)
  6. And a business bank account

There is no minimum time in business requirement. Apply in person only, dealer will advise if approval or Personal Guarantee (PG) needed.

Demolish your funding problems with 27 killer ways to get cash for your business.

Vehicle Financing Key #2: Credit Line Hybrid

Yet another potential form of vehicle financing is through the Credit Suite Credit Line Hybrid. A credit line hybrid is a form of unsecured funding. Our credit line hybrid has an even better interest rate than a secured loan. Get some of the highest loan amounts and credit lines for businesses. Get 0% business credit cards with stated income. These report to business CRAs. So you can build business credit at the same time. This will get you access to even more cash with no personal guarantee.

Credit Line Hybrid: Terms and Qualifying

You need a good credit score or a guarantor with good credit to get an approval (a FICO score of at least 680). No financials are necessary. You can often get a loan of five times the amount of current highest revolving credit limit account. This is up to $150,000.

Vehicle Financing Key #3: 401(k) Financing

Another option for vehicle financing is using your 401(k) as collateral. This is not a loan. You will not have to pay an early withdrawal fee or a tax penalty. You put the money back by contributing, just like with any 401(k) program. This means you won’t lose your retirement funds. This is a 401(k) Rollover for Working Capital program. The IRS calls it a Rollover for Business Startups (ROBS).

Per the IRS, a ROBS qualified plan is a separate entity with its own set of requirements. The plan, through its company stock investments, rather than the individual owns the trade or business. Therefore, some filing exceptions for individuals may not apply to such a plan. This type of financing isn’t a loan against, your 401(k), so there’s no interest to pay. It does not use the 401(k) or stocks as collateral. Instead, this is simply a movement or change of custodian.

401(k) Financing: Terms and Qualifying

Pay low rates, often less than 5%. Your 401(k) will need to have more than $35,000 in it. You can usually get up to 100% of what’s “rollable” within your 401(k) . The lender will want to see a copy of your two most recent 401(k) statements.

You can get 401(k) financing even with severely challenged personal credit. The 401(k) you use cannot be from a business where you are currently employed. So it will need to be from older employment. You cannot be currently contributing to it.

Vehicle Financing Key #4: SBA 504 Loans

The SBA 504 loan can be used to purchase “Long-term machinery and equipment”. As a result, it’s not a standard car loan. But you can purchase a truck with it. You can use an SBA 504 loan when the vehicles being purchased qualify as heavy equipment.

Some examples of trucks as ‘heavy equipment’ can include:

  1. Cement trucks
  2. Dump trucks
  3. Custom-build heavy trucks fit for specific purposes (loading/unloading septic tanks, for instance)
  4. Semis and tanker trailer trucks

If your vehicle needs run in this direction, then an SBA loan could be perfect for your needs.

SBA 504 Loans and Credit Suite

Did you know that you can get SBA loans through Credit Suite? Established businesses with tax returns that show good revenues and profitability can get very large sums of funding with Secured Small Business Loans. If you have positive business tax returns, you should apply for secured government-backed SBA program loans from $250,000 up to $12,000,000. Approval amounts will vary based on the collateral your business has, and the amount of net profit reflected on your tax returns.

The total time to close these loans is about 2-4 months. SBA loans offer some of the longest payback terms available for business financing. Get loan terms for 10, 15, or even 25 years with the SBA. Interest will total approximately 3% of the debt. The rate may be financed with the loan.

Get approved for up to $12 million. Your credit will have to be of good quality. Your collateral will need to equal 50% of the loan amount. Financials will be necessary.

SBA 504 Loans Through Credit Suite: Documentation 

The SBA will require certain documentation to qualify including:

  1. Business and personal financials
  2. Resume and background information
  3. Personal and business credit reports
  4. Your business plan
  5. Bank statements
  6. Collateral and any other documentation relevant to the transaction

Vehicle Financing: Takeaways

Getting vehicle funding involves variables like whether the vehicle is new or used. Heavy vehicles like dump trucks can be paid for with SBA 504 loans. There is a possibility that you would have to provide a personal guarantee to get a loan or lease. Credit Suite offers financing that you can use to purchase vehicles, and we offer even more options through our Business Finance Suite. There are four keys to open the door to affording vehicles for your business. And there are a lot of options. Let’s explore them together.

The post When The Most Successful Companies Look for Fleet and Vehicle Financing … Here’s What They Do … appeared first on Credit Suite.

Franchise Financing

What is Franchise Financing?

If you’ve got a franchise, then you probably need franchise financing.

What are Franchises?

Franchises are businesses that trade their name and operating methods to people in exchange for a royalty fee. They offer both the flexibility and independence of being a small business owner, plus the support and infrastructure of a large corporation. They can be the ideal opportunity for anyone interested in becoming an entrepreneur. But they do require a significant capital investment.

You may be tempted to pour your own money into your franchised location. Or you may want to use your own credit cards or take out a second mortgage on your house. You shouldn’t have to do any of these to finance a franchise.

Franchise Financing from the Franchisor

If you need funding to purchase a franchise, your first conversation should be with your prospective franchisor. Many corporations with franchise business models offer tailored financing solutions exclusively designed for their franchisees. These can be either through partnerships with specific lenders or by providing capital directly from the corporation. This is one of the most common ways to finance a franchise and offers many benefits. For example, Gold’s Gym, UPS Store and Meineke all offer financing options to their franchise owners.

One benefit of using franchisor financing is that it can be a one-stop shop for everything you need. Many of these programs don’t just offer financing for the franchise fees. They can also offer financing to purchase equipment and other resources you need to start up the business. If you’re working with a franchisor who offers their own financing program, chances are you won’t need to look much further for funding.

Each franchisor financing agreement will differ. But some offer to take on as much as 75% of the debt burden from the new franchise owner. Agreements might involve deferred payments while the business is starting up. Or they may structure repayment on a sliding scale. Have your independent business attorney or accountant review the terms of your franchise agreement and the financing agreement. Have them help you understand the full terms before you sign. See entrepreneur.com/article/312476.

Franchise Financing from Traditional Term Loans

These are another option for franchise financing. Many business owners consider approaching their bank for funding. But a traditional term loan doesn’t have to come from a bank. Such loans can come from a credit union or an alternative lender. With these loans, the lender offers a lump sum of cash up front, which you then repay, plus interest, in monthly installments over a set period of time.

These kinds of loans are more likely to be available to business owners with good credit. Lenders will be looking at your financial history, as in how well you pay your bills. A better financial history means interest rates and terms will be better, and it can be the difference between being approved or not.

Demolish your funding problems with 27 killer ways to get cash for your business.

Franchise Financing  from SBA Loans

The Small Business Administration guarantees a portion of the loans made in its name. This gives lenders an incentive to offer more loans, and at better rates and terms. But keep in mind that qualification standards are strict. New business owners in particular are not likely to qualify.

Franchise Financing via Alternative Lenders

Often, alternative lenders have less stringent requirements and shorter turnaround times than traditional financing options. They offer a variety of loan options like equipment financing, business lines of credit and term loans.

But this access and convenience may cost you. Alternative loan products tend to be more expensive, offer shorter repayment terms and lower loan amounts, than their more traditional counterparts.

But it may be worth it if you need to supplement your existing financing or you can’t qualify for a bank or SBA loan or need cash quickly to jump on a life-changing opportunity. So don’t dismiss alternative lending out of hand. Here are some alternative lenders to consider.

Apple Pie Capital

This lender works exclusively with franchise businesses to help them find the solution that’s right for their needs. Get financing for new units, refinancing, recapitalization, remodels, and acquisitions, etc. You can also access equipment financing loans. Apple Pie works with a variety of different lenders, hence the interest rates and terms you receive on your franchise loan will vary, but it will be largely based on the type of product and your qualifications.

Apple Pie Capital is specifically dedicated to franchise financing. Get 5-10 year payment terms. They have flexible collateral options. There are no prepayment penalty options. See applepiecapital.com/franchise-financing.

CAN Capital

This lender works with businesses in a variety of industries, including franchise businesses. With CAN Capital, you can access short-term loans and medium-term loans. Terms for the short-term loans range from 3 to 24 months, and 2 to 4 years for the medium-term loans. CAN Capital charges interest as a factor rate.

To qualify for a franchise loan from CAN Capital, you’ll need at least $4,500 revenue per month, a minimum credit score of 600, and 12 months preferred (although they will consider 3+ months with consistent revenue) in business, for their short-term loan.

Qualifying for a medium-term loan is stricter. For a CAN Capital medium-term loan, you’ll need a 680 personal credit score, 7 years in business, and a preferred $350,000 in annual revenue. See cancapital.com/business-loans.

Demolish your funding problems with 27 killer ways to get cash for your business.

OnDeck

This is one of the easiest and quickest ways to get a short-term loan up to $250,000 or a line of credit up to $100,000. Though OnDeck isn’t specifically geared toward franchise owners, it’s a viable online loan option for any type of small business owner who doesn’t qualify for a bank loan or doesn’t want to wait months to receive loan funds. See ondeck.com.

Funding Circle

This lender has numerous franchise partners across the US, including Papa John’s, Pinkberry, Quiznos, etc. Funding Circle offers various loan products through partnered lenders for franchises in different stages of growth. For Funding Circle’s standard term loans and lines of credit, you’ll need to be a franchisee with a business that’s at least two years old and have a credit score of at least 660.

But they also offer merchant cash advances, short-term working capital loans, and invoice financing. These choices have higher rates, but more lenient requirements. For example, for an MCA, you’ll only need six months in business, and a credit score of 500.

SmartBiz

Get online SBA loans up to $5 million for commercial real estate purchases, loans up to $350,000 for debt refinancing and business capital, and bank term loans up to $500,000. This lender is only an option for established franchises. You’ll need at least two years in business, positive cash flow, and good personal credit. See smartbizloans.com.

Franchise Financing  via Crowdfunding

If you have a decent social media presence and a fairly large number of friends or followers, crowdfunding may be feasible. Acquaintances aren’t likely to send you thousands of dollars. But a few bucks here and there can add up. Crowdfunding is also a way to get funding without having to give up a portion of control and ownership.

Demolish your funding problems with 27 killer ways to get cash for your business.

Angel Investing and/or Loans from Friends and Family

The main difference between the two is angel is investing is actually a sale of some of your ownership and control, whereas loans from friends and family are much like more formal loans from a provider. Your family and friends are under no obligation to charge the kind of interest rates prescribed by the Federal Reserve, so they could potentially charge more. On the other hand, they aren’t obligated to charge interest at all.

Your family and friends are under no obligation to put anything in writing, but you should do so anyway, for the sake of your sanity if nothing else. Having your family and friends loan you money or buy a part of your business will change the dynamic. Can your relationship stand the strain?

Business Credit for Franchises

Franchises, just like every other form of business, can build and improve their business credit. As long as they are an LLC or corporation it is fine. Note: you need each company you want to build business credit on to have its own EIN number.

But keep in mind, many franchises may require purchases directly from headquarters or suppliers specifically designated by them. This can be anything from uniforms to beef, to architectural plans for erecting a new building or renovating an existing one. It will always pay to check.

Franchise Financing: Takeaways

Franchises need funding, like every type of business. Check with the franchise itself to see if they have funding. Check the SBA and your bank, and alternative lenders. Consider crowdfunding, angel investing, or loans from your friends and family if other sources are not forthcoming. And be sure to build business credit for your franchise!

The post Franchise Financing appeared first on Credit Suite.

What are the Details on Business Financing Options?

What are the Best Business Financing Options for Your Business?

When it comes to business lending, what are your best choices? What are the best business financing options? And what are the details?

Your best business financing options will depend on your business’s strengths. This is in three areas:

  • Cash flow
  • Collateral
  • Credit (personal or business)

In general, business financing options divide rather neatly into those three categories. Four, if you separate personal and business credit, which we’ll do here.

Business Financing Options with Good Cash Flow

Here’s a great selection of business financing options.

Fundbox

Fundbox will connect directly to your online accounting software. That’s all you need to do. You can get invoice financing or a line of credit. See fundbox.com.

Fundbox: Terms and Qualifying

Get a revolving line of credit for up to $150,000. Fundbox will auto debit your weekly payment from your bank account. You don’t need to show a minimum personal credit score, and you don’t need to show a minimum time in business.

Account Receivables Financing

You can use outstanding account receivables as collateral for financing. Receivables should be with the government or another business. If you also have purchase orders,  you can get financing to have those filled. You won’t need to use your cash flow to do so. Get an accounts receivable credit line with rates of less than 1% with no consumer credit requirement. Receivables should be with the government or another business.

Account Receivables Financing: Terms and Qualifying

Use your outstanding account receivables for financing. Get as much as 80% of receivables advanced ongoing in less than 24 hours. Remainder of the accounts receivable are released once the invoice is paid in full. Factor rates as low as 1.33%. you can get an accounts receivable credit line with rates of less than 1% with no consumer credit requirement.

Purchase Order Financing

This is advanced to a business with a large purchase order or contract but cannot fulfill it. Lender then loans the funds necessary to complete the order and charges a percentage for the service. Then the company can fulfill its order or contract. The difference between purchase order and accounts receivable financing is:

  • Purchase order financing involves a company lending you money to fulfill purchase orders
  • Accounts receivable financing involves a company buying your outstanding invoices

Purchase Order Financing: Terms and Qualifying

Terms are for Credit Suite purchase order financing. For approval, lenders will typically review your outstanding purchase orders that need to be filled. If the purchase orders are valid and the suppliers you are dealing with are credible, you can be approved regardless of personal credit history. Rates typically range from 1-4%. In some instances, you can get 95% of your purchase order financed.

Cash Flow Financing

A loan made to a company is backed by a company’s expected cash flows. A company’s cash flow is the amount of cash that flows in and out of a business, in a specific period. Cash flow financing (or a cash flow loan) uses generated cash flow as a means to pay back the loan.

Cash Flow Financing: Terms and Qualifying

Often you will need to have a few years in business. You may need to meet a certain minimum credit score requirement. You will need to prove historical cash flow, and present your accounts receivables and accounts payables, so the lender can determine how much to loan to your business.

Merchant Lines of Credit

Merchant lines of credit are lines of credit offered by stores. These lines of credit can only be used exclusively at the store from which they are offered. One such example is Amazon, which offers lines of credit through Marcus by Goldman Sachs.

Merchant Lines of Credit: Terms and Qualifying

Terms vary. Eligibility can be based on cash flow (Amazon’s is). Such lines of credit may offer special financing terms during certain time periods, for certain products, or for a certain dollar amount spent at the store. In some cases, payment in full must be made after a specified period of time, like a promotional period.

Contrast with traditional credit cards and merchant credit cards which allow borrowers to continue carrying a revolving balance with interest. In exchange for a shorter repayment period, the borrower may be offered low or zero percent interest, or a discount off their purchase price.

Merchant Cash Advances

Businesses that accept credit cards as a form of payment may qualify for a merchant cash advance. This means your business must have a merchant account in order to be able to accept credit card payments. Your business must bring in $100,000 or more per year in credit card sales. Typical approval is equal to one month’s credit processing volume. The minimum credit score is 500.

Qualifying for a Merchant Cash Advance

They do not ask for a lot of documents. This is not like what most conventional lenders will want. You won’t need financials, business plans, or resumes. You don’t even need collateral.

Your business’s credit card receipts and business bank statements tell lenders all they need to know. These loans work well for businesses that qualify and need funds fast, and those with credit that is less than perfect. It’s a great way to get money for  your business fast with few requirements.

Business Revenue Financing

It’s also called royalty-based financing. Business revenue financing is a way to raise capital from investors who get a percentage of the enterprise’s ongoing gross revenues, in exchange for money invested. In a revenue-based financing investment, investors get a regular share of business income until a predetermined amount is paid. Often, this predetermined amount is a multiple of the principal investment. It is usually between 3 – 5 times the original amount invested.

Business Revenue Financing: Terms and Qualifying

Since repayment of the loan is based on revenues, the time it takes to repay the loan will fluctuate. The faster revenue grows, the quicker you’ll repay the loan, and vice versa. The percentage of monthly revenues committed to repayment can be as high as 10%. Monthly payments will fluctuate with revenue highs and lows and will continue until you’ve paid back the loan in full.

Business Financing Options with Collateral

Collateral opens up a ton of financing choices; this is just a handful of what’s out there.

401(k) Financing

If you have an eligible 401(k), you can use those funds to get money for your business. You must not be currently contributing. You must not longer be working for the company that the 401(k) is under. And you must have a balance of at least $35,000.

You can even still earn interest on your account, and there are no tax penalties. Personal credit doesn’t really matter much. Interest rates are usually low.

401(k) Financing Details

In fact, they are  often less than 5%. Close and fund in less than 3 weeks. Can usually get up to 100% of what’s “rollable” within your 401(k). This type of loan works well for anyone that has an eligible 401(k) account.

IRA Financing

Similar to 401(k) financing. In as little as 3 weeks you can invest a portion of your retirement funds into your business. This gives you more control over the performance of your retirement plan assets. And it gives you the working capital you need for business growth.

IRA Financing: Terms and Qualifying

In general, you will work with a CPA. They will help you roll over a non-contributing and qualifying account. This allows for cash out of half, or $50,000, whichever is lower. If applicable, the CPA you work with will structure a self-directing IRA for the remaining funds.

Stocks Financing

Some lenders will make loans using securities as collateral. Securities-based lending provides ready access to capital. This can be used for almost any purpose, such as buying real estate or investing in a business. The only restrictions to this kind of lending are other securities-based transactions like buying shares or repaying a margin loan.

Stocks Financing: Terms and Qualifying

You continue to earn interest on stocks pledged as collateral. Closing and funding takes less than 3 weeks. Rates can be as low as 1.6%. You will have challenged personal credit.

Bonds Financing

Securities-based lending for bonds is offered through large financial institutions and private banks. People tend to seek out these kinds of loans, if they want to make a large business acquisition, or if they want to execute large transactions like real estate purchases.

Lenders determine the value of the loan based on the borrower’s investment portfolio. In some cases, the issuer of the loan may determine eligibility based on the underlying asset. It can end up approving a loan based on a portfolio of US Treasury notes rather than stocks.

Bonds Financing: Terms and Qualifying

Most investment-grade corporate, treasury, municipal, and government agency bonds are accepted. You keep all the interest and appreciation from your securities. To qualify all the lender will require is a copy of your two most recent securities statements. If your stocks or bonds have a value over $25,000, you can be approved, even with severely challenged personal credit.

Demolish your funding problems with 27 killer ways to get cash for your business.

Kickfurther

Finance your next inventory purchase with financing from customers and brand supporters and fundraise directly to them. Customers buy through what’s called a Consignment Opportunity. Your customers own the products they helped fund until they are sold by the brand. As soon as the products sell, the customer earns payments. Kickfurther also offers an online store for businesses to market and sell their products. See kickfurther.com.

Kickfurther: Terms and Qualifying

Get funding for up to $2 million in inventory. Payback terms will vary. At the end of each sales period, submit sales reports and provide payment for inventory sold. You are required to provide a monthly accounting of current inventory levels.

Inventory Financing

Inventory financing is a revolving line of credit or a short-term loan acquired by a company so it can purchase products for sale later. The products serve as the collateral for the loan. There may be restrictions on the type of inventory you can use. This can include not allowing cannabis, alcohol, firearms, etc., or perishable goods. There can be revenue requirements. And there may also be minimum FICO score requirements.

Inventory Financing: Terms and Qualifying

Get approved for a line of credit for 50% of inventory value, regardless of personal credit quality. Rates are usually 5 – 15% depending on type of inventory. Get funding within 3 weeks or less. It can’t be lumped together inventory, like office equipment.

Equipment Financing

Equipment financing is when you use a loan or lease to purchase or borrow hard assets for your business. It is a business financing option you can use to buy any physical asset. Physical assets can include items such as a restaurant oven or a company car. You will predictable amounts every month. You can build business credit on a program such as this.

Equipment Financing: Terms and Qualifying

All terms are for equipment financing through Credit Suite. Companies must have at least one year in business. You can get approved even with challenged credit. You won’t need financials to secure equipment financing. Approvals take as little as 24 hours.

Equipment Leasing

You can also lease equipment, rather than buy it outright. And you will often put down less money than you would if you were buying the piece of equipment. You may be able to negotiate flexible terms with an equipment lease. It’s easy to upgrade equipment after your lease ends. This is helpful if your equipment is something like a computer which quickly becomes obsolete.

Equipment Leasing: Terms and Qualifying

All terms are for equipment leasing through Credit Suite. You can be approved for equipment financing and leasing with as low as a 640 personal credit score. To get approved lenders will request details on the equipment you are getting. After a quick credit review, you can be approved for as much as $10,000,000 in equipment financing.

Business Financing Options with Good Personal Credit

Credit Line Hybrid

A credit line hybrid is a form of unsecured funding. Our credit line hybrid has an even better interest rate than a secured loan. Get some of the highest loan amounts and credit lines for businesses. Get 0% business credit cards with stated income. These report to business CRAs. You can build business credit at the same time. This will get you access to even more cash with no personal guarantee.

Credit Line Hybrid: Terms and Qualifying

You need a good credit score or a guarantor with good credit to get an approval (a FICO score of at least 680). No financials required. You can often get a loan of five times the amount of current highest revolving credit limit account. This is up to $150,000.

Bridge Loans

A bridge loan is a short-term loan used until a person or company secures permanent financing or removes an existing obligation. It allows the user to meet current obligations by providing immediate cash flow. Bridge loans are short term, up to one year. They have relatively high interest rates. And they are often backed by some form of collateral, like real estate or inventory.

Bridge Loans via Our Credit Line Hybrid

The Credit Suite Credit Line Hybrid has a term loan program. This bridge loan works as either an add-on to, or in lieu of, the program, when the applicant meets eligibility and is agreeable to either a portion (or all) of their funding, supplied in the form of cash term loans. There is a fixed monthly repayment.

Bridge Loans: Terms and Qualifying

The Credit Suite program is an aggregate program requiring multiple accounts to meet our prequalification. Get $25,000 to $300,000 per applicant. The APR is 7 – 24% depending on creditworthiness and selected term. Terms are 3, 5, or 7 years. You must have a 680 FICO or better, and over $35,000 in adjusted gross income. Actual pre-qualification will depend on Debt-to-Income ratio.

Computer Leases

Just like furniture, you can lease computer equipment. You can take advantage of tax incentives and use your cash flow to its fullest advantage. This includes:

  • File Servers and Backup Storage
  • Hardware and Mainframes
  • Laptops
  • Printers and Scanners

Computer Leases: Terms and Qualifying

Terms can include leasing to ownership. Often, leasing provides businesses with a full deduction of lease payments against current earnings. A large part of approval is based on the personal credit and background of the owners, not on trade or banking information that startups in particular don’t have yet. Lease up to $5,000 to $250,000 and more in computer equipment value. Lease terms range from 24 months to 60 months. See harrisleasing.com/computer-equipment-leasing.

Auto Financing

Whether a vehicle is purchased new or used will affect the number of years you can finance the vehicle and the rates you will pay. If a vehicle is used, then the number of miles on it will also affect terms. Plus, business owners may be required to personally guarantee vehicle loans.  If you are a co-borrower the loan will most likely report to your personal credit report. Some loans have a prepayment penalty and charge you for paying ahead.

In general, the following will eliminate the need to provide a personal guarantee for this type of financing:

  • good business credit
  • a decent amount of time in business or
  • good personal credit

Much like with any other kind of business borrowing, the more assurances you can give the lender, the better.

Auto Financing: Terms and Qualifying

You need to establish:

  • the amount of money you have for a down payment
  • the vehicle you need, and
  • the costs associated with buying the vehicle

Provide documentation that proves you are the owner of a business, like:

  • business licenses
  • partnership agreements, and
  • LLC documents
  • articles of incorporation (if applicable), listing you as having at least a 20% stake in the business

You may also have to provide personal documentation like personal credit score and credit history. If you are a sole proprietor and the business is under your Social Security number, you are the borrower and guarantor. Hence you are personally liable for repaying the loan. It is also a good idea to have a loan proposal. A loan proposal should detail your business, loan needs, and financial statements.

Demolish your funding problems with 27 killer ways to get cash for your business.

Business Financing Options with Good Business Credit

Building business credit will open up even more opportunities for funding. Check out the details.

Vendor Credit

Starter vendors are open to working with most businesses, even startup ventures. Make sure vendors report to the CRAs – not all do. Vendors report to the business CRAs within 60 days. They help you build your business credit profile and score.

Vendor Credit: Terms and Qualifying

Terms will vary depending on the vendor, but they tend to be Net 30. And you will not need collateral, good personal credit, or cash flow.

Retail Credit

Retail credit comes from major retailers. Buy everything from office supplies to power tools. Retailers will check whether your business information is uniform everywhere. They will also check whether your business is properly licensed.

Retail Credit: Terms and Qualifying

Qualifications will vary, and there can be a minimum time in business requirement. There may even be a minimum number of employees requirement, or a minimum annual sales requirement. Terms can be revolving. You will need at least 3 (5 is better) accounts reporting to the business CRAs.

Fleet Credit

Fleet credit is used to buy fuel, maintain vehicles of all sorts, and repair vehicles. Even businesses which don’t have big fleets can still benefit. These are usually gas credit cards.

Fleet Credit: Terms and Qualifying

Requirements will vary. There may be a minimal time in business requirement. If your business doesn’t make the time in business requirement, you may be able to, instead offer a personal guarantee or give a deposit to secure the credit.

Bank Credit Cards

Bank credit cards are cards like MasterCard. So they can be used pretty much anywhere. These cards may even have rewards programs.

Bank Credit Cards: Terms and Qualifying

Terms can be revolving. Usually, you will need to have at least 14 accounts reporting to the business CRAs. There can be longer time in business requirements. And there may also be minimum number of employee requirements.

Business Financing Options for a Combination of Collateral, Cash Flow, Good Personal Credit, and Good Business Credit

The Small Business Administration wants to see the full package.

SBA Loans

Guaranteed by the federal government. Issued by participating lenders, usually banks. They offer a lot of the perks of traditional loans, such as lower interest rates and favorable terms. Due to government guarantee, lenders are able to offer them to those with a lower credit score than would typically be required.

Eligibility for SBA Loans

Lenders and loan programs have unique eligibility requirements. In general, eligibility is based on what a business does to receive its income, the character of its ownership, and where the business operates. Hence even those with bad credit may qualify for startup funding.

Normally, businesses must meet size standards, be able to repay, and have a sound business purpose. The lender will provide you with a full list of eligibility requirements for your loan. See www.sba.gov/document/support–table-size-standards.

Ideal credit scores for an SBA loan are 680 or above. There are a number of SBA loan programs, each one designed to work for different needs and situations. Find out more at SBA.gov.

Demolish your funding problems with 27 killer ways to get cash for your business.

Term Loans

Banks are often the first place we think of when we thinking of financing. But big banks only sign off on about 25% of the small business loan applications that come their way. Term loans often have lower interest rates than many other funding options. They also tend to be for higher loan amounts.

For term loans, you generally need all four strengths.

Term Loans: Terms and Qualifying

Generally speaking, the companies banks end up funding have very strong financials and near-perfect credit scores. You will most likely have to undergo a personal credit check. These kinds of loans may require collateral.

Business Financing Options if You Sell Part of Your Business

Angel Investing

Angel investors invest in small startups or entrepreneurs. Often, angel investors are among an entrepreneur’s family and friends. The capital they provide may be a one-time investment to help the business get started, or an ongoing injection of money to support and carry the company through its early stages.

Angels are not covered by the Securities Exchange Commission’s (SEC) standards for accredited investors. Angels could be friends or colleagues sitting on home equity, or local professionals who are looking to invest. Consider people you know well and people you don’t know so well. But keep in mind, you’re giving up part of your ownership in your business.

Angel Investing: Terms and Qualifying

Angels are informal investors so there really aren’t any terms. Technically, there is nothing done for qualifying, although investors may (probably should) insist on a valuation of your business. No matter what, it’s always a good practice to get everything in writing.

Venture Capital

Venture capitalists give money to help build new startups, if the VCs believe a company has both high-growth and high-risk potential. These tend to be fast-growth companies with an exit strategy already in place. Venture capitalists often look to recover their investment within a 3-5 year time frame.

VCs will also, often, want to own a large piece of a company if not a controlling stake. They want game-changing businesses, so straightforward businesses won’t be on their radar unless it’s shifting the paradigm. Like with angel investors, you are giving up a part of your ownership in your business. VCs often want a larger share of your business than angel investors do.

Venture Capital: Terms and Qualifying

Because venture capitalists are more formal investors than angels, a valuation of your business is probably going to necessary. Specific terms will be spelled out in your agreement with them. The Securities and Exchange Commission will also have requirements. It is best practices to consult with a lawyer well-versed in business law before you sign anything.

Business Financing Options if You Have None of the Above

Reward-Based Crowdfunding

You can get money from the crowd for your business. Start with a service like Kickstarter. But make sure you read the fine print (always a good idea!). Many crowdfunding platforms make you give all the funding back if you do not make your goal by the end of the campaign. But Indiegogo has a flexible funding option.

Crowdfunding platforms will take a percentage of the donations. That’s how they make their money. Crowdfunding platforms may push to have you deliver on your promises. So you’ll have to actually manufacture a product or do whatever else your business is supposed to be doing. Given how much social media we’re all bombarded with these days, it should come as no surprise that donors can become weary of crowdfunding pitches.

Reward-Based Crowdfunding Details

Crowdfunding tends to work best when donors can personally connect with a product or service. Straightforward businesses may not do so well. The kinds of businesses which do the best often associate with products not quite on the shelves yet, or artistic endeavors.

Standard widgets will most likely not attract brand ambassadors. They probably won’t get donors too fired up. Because crowdfunding campaigns are time-consuming, it doesn’t make sense to try this form of funding unless you realistically feel your chance of success is better than 50%.

Reward-Based Crowdfunding: Terms and Qualifying

Terms will differ depending on which platform you use. Check and make sure your platform of choice will allow your industry to work with them. For example, even though recreational cannabis use is legal in Massachusetts, Kickstarter (for example) doesn’t allow fundraising for drugs, nicotine, tobacco, vaporizers, and related paraphernalia. Any major crowdfunding platform has a section for rules, a FAQ, or ‘how it works’. Be sure to read such a section thoroughly so you know exactly what you’re getting yourself into.

Equity Crowdfunding

The first thing to know is that equity crowdfunding is a stock offering from a company that does not have a stock exchange listing. Equity crowdfunding has been around for less than 10 years. It’s not the same as rewards-based (which comes from places like Kickstarter). Potential investors visit a funding portal website. There, they can explore different equity crowdfunding investment opportunities. Note: there are limits on how much capital an individual can invest based on their income and net worth. Equity crowdfunding gives investors a stake in your business.

Equity Crowdfunding: Terms and Qualifying

Keep in mind that equity crowdfunding tends to be covered by the Securities Act of 1933, Regulation Crowdfunding (17 CFR Part 227), Regulation D Rule 506 (17 CFR § 230.506), and Regulation A+ (17 CFR § 227.100). See: law.cornell.edu/cfr/text/17/227.100.

Federal law can be complex. It is best practices to consult with an attorney well-versed in federal law, specifically, securities and corporations, when it comes to interpreting terms and qualifications (and any changes that may be made to these aspects of the law in the future).

Grants

Federal, local, city, and state grants generally do not have to be paid back. For urban projects, try HUD (Housing and Urban Development). For rural projects, try the USDA (Department of Agriculture). Federal funding means paperwork. You often must show experience in what you are proposing. See grants.gov. and grantwatch.com.

Also try city and state websites. These are often less restrictive than federal grants. It helps if you can show you will help the community. Try to partner with a local business.

Grants: Terms and Qualifying

Grants have varying qualifications. They are very competitive. Be sure to check information thoroughly. This includes due dates and any necessary paperwork. Some grants may offer preferences to businesses with minority, female, veteran, or disabled ownership.

Microloans

Microloans are business loans with relatively low interest rates. Generally, these loans are on offer to small or developing businesses with modest capital requirements and little to no revenue history. Microloans — as the name suggests — are smaller loans than a traditional bank loan. They generally offer anywhere from $500 to $50,000 in business financing.

Microloans: Terms and Qualifying

Terms and requirements vary among providers. Kiva, for example, charges 0% interest. The Opportunity Fund provides loans to low- and moderate-income immigrants, women, and other underserved small business owners. Accion requires a cosigner. Check the specific requirements of any microloan program that interests you.

So How Do You Choose?

This is an enormous buffet of business funding choices! But how do you select the one(s) that’s best for your particular situation? This is where our Advisory Team comes in extremely handy. Or help yourself with our Business Credit Builder. It’s your choice. But it all starts with business credit.

The post What are the Details on Business Financing Options? appeared first on Credit Suite.

Ecommerce Startup Inventory Financing

How Can Ecommerce Business Startup Inventory Financing Help Your Business?

Selling goods online? Then you might need Ecommerce startup business inventory financing.

Our World Has Changed – and It’s Gone Even More Online

Ecommerce is where it’s at.

Not convinced?

While there was already a lot of online commerce, in March of 2020, due to COVID-19, a good 42% of Americans bought groceries online at least once per week. Orders for grocers from Amazon increased 50 fold!

Statista says about 227.5 million Americans were buying online in 2020, so with 330.7 American citizens, that’s just under 69% of all Americans. They are buying a lot more than groceries online. And that’s only continuing in 2021.

What is Ecommerce Startup Inventory Financing?

According to Investopedia, “Inventory financing is a revolving line of credit or a short-term loan that is acquired by a company so it can purchase products for sale later. The products serve as the collateral for the loan.”

Why Can Ecommerce Startup Inventory Financing Work Right Now?

Online businesses are doing relatively well right now. You already have experience with doing all of your commerce online. With a lot of brick and mortar businesses closed right now, or only tentatively reopening, ecommerce businesses can continue to do well.

Consider Ecommerce Startup Inventory Financing

Use your existing inventory as collateral for business financing. You’ll need inventory valued at $300,000 or more. You can get approved for a line of credit for 50% of inventory value. Rates are usually 5 – 15% depending on type of inventory. Get funding within 3 weeks or less. It can’t be lumped together inventory, like office equipment.

But there may be restrictions on the type of inventory you can use. This can include not allowing cannabis, alcohol, firearms, etc., or perishable goods. There can be revenue requirements. There may also be minimum FICO score requirements.

Alternatives to Startup Inventory Financing

There are a number of other ways to get financing for your online business. Your business – and you – have assets beyond inventory. You can tap these assets as collateral. You can use: a 401(k) or IRA, accounts receivable, or stocks or bonds. The 401(k), stocks, or bonds don’t have to be yours. You can work with a partner with these kinds of assets.

Securities-Based Financing

Use existing stocks as leverage to get business financing. Borrow as much as 90% of their value. You continue to earn interest on the stocks pledged as collateral. Closing and funding takes less than 3 weeks.

Rates can be as low as 1.6%. This is a working capital line of credit. You will have challenged personal credit.

Demolish your funding problems with 27 killer ways to get cash for your business.

401(k) Financing

Use your existing 401(k), or IRA as collateral for business financing. This program uses IRS proven strategies. You will pay no tax penalties.

You still earn interest on your 401(k). pay low rates, often less than 5%. Close and fund in less than 3 weeks. You can usually get up to 100% of what’s “rollable” within your 401(k).

Follow these steps. A new corporation is formed; a retirement plan is created to allow for investment into the corporation; funds are rolled over into the new plan. Then the new plan purchases stock in corporation and holds it. The corporation becomes debt free and cash rich.

Accounts Receivable Financing

Use your outstanding account receivables for financing. Get as much as 80% of receivables advanced ongoing in less than 24 hours. The remainder of the accounts receivable are released once the invoice is paid in full. Closing takes 2 weeks or less. Factor rates as low as 1.33%. Accounts receivable credit line with rates of less than 1% with no consumer credit requirement

Receivables should be with the government or another business. If you also have purchase orders, you can get financing to have those filled. You won’t need to use your cash flow to do so.

Amazon Corporate Credit Line

Get revolving or pay in full. You can authorize multiple buyers on a single account and download order history reports and pay by purchase order.

With the pay in full credit line, you get net 55-day billing terms to pay in full with no interest. You can set up primary and secondary accounts for multiple purchasers. And you will get a Dedicated Account Manager.

For the revolving credit line, you can make minimum payments or pay in full monthly. Pay 12.99% purchase APR (the minimum interest charge is $1). You get an option to apply as a personal guarantor to build business credit. And enjoy 24/7 Customer Service.

Amazon Lines of Credit and Working Capital Loans

If your business is eligible, you will see funding options when you log into Seller Central. Currently, lines of credit are offered by Marcus by Goldman Sachs. Loans come from Amazon Lending – specific terms are tailored to the business. Get access to loan funds within 5 days.

Kickfurther

You can finance your next inventory purchase with financing from customers and brand supporters and fundraise directly to them. The way it works is, customers buy through what’s called a Consignment Opportunity. Customers own the products they helped fund until they are sold by the brand. As soon as the products sell, the customer earns payments. Kickfurther also offers an online store for businesses to market and sell their products.

Shopify Capital

With Shopify Capital, you can get 12-month terms. Pay back with a percentage of daily sales. Borrow between $200 and $1 million. The total owed and daily repayment rate depend on risk profile.

OnDeck

OnDeck offers inventory loans and business lines of credit. Term loans runs $5,000 to $250,000, with 12-month terms paid back daily or weekly. Lines of credit run from $6,000 to $100,000. Pay back over 12 months, with automatic weekly payments.

Demolish your funding problems with 27 killer ways to get cash for your business.

Get to know Our Hybrid Credit Line Program for Startup Inventory Financing

Check out this form of unsecured funding. Unsecured funding does not require collateral, but the lender’s risk is mitigated by higher interest rates. Our credit line hybrid has an even better interest rate than a secured loan. Yet you can get the money faster and easier than any type of traditional funding. Get business funding without having to supply bank statements or credit stubs. You can get funding in a few days rather than weeks without supplying any collateral or documents.

You can get some of the highest loan amounts and credit lines for businesses. Get 0% business credit cards with stated income. No financials required. These report to business CRAs. You can build business credit at the same time. This will get you access to even more cash with no personal guarantee.

You can often get a loan of 5 times the amount of current highest revolving credit limit account. This is up to $150,000. Easily five times what you could get on your own when applying for cards. Get cash out on this program as well.

Advantages

There will be NO impact on your personal credit with this type of financing. You need a good credit score or a guarantor with good credit to get an approval. With good personal credit, get unsecured credit cards with a personal guarantee. And with good business credit, get unsecured credit cards without a personal guarantee.

Check out business credit. It should be your goal to build business credit, even if you can get funding elsewhere. Business credit will help your company for years to come. Business credit is credit linked to your EIN and not your SSN.

This credit is available without a personal guarantee. It is available regardless of personal credit. You can get business credit immediately. Business credit is the only way to get money for a business when you don’t have collateral, cash flow, good personal credit, or a guarantor.

Ecommerce Startup Inventory Financing: Takeaways

Due to current circumstances, online businesses are doing relatively well. You can get inventory financing for your ecommerce startup. Or use personal or business assets as collateral for business loans. Amazon and Kickfurther offer even more options. Our hybrid credit line is a stellar choice if you or a guarantor have good personal credit. And don’t forget to build business credit, for even more money for your ecommerce startup business.

Demolish your funding problems with 27 killer ways to get cash for your business.

The post Ecommerce Startup Inventory Financing appeared first on Credit Suite.

Business Revenue Financing

If You Have Unpredictable Business Income, Business Revenue Financing Could be the Solution You’ve Been Searching For

It is very easy to have a business with unpredictable income – especially when you have a startup venture. But business revenue financing can help you to smooth out the gaps in your cash flow.

Is Your Business Income Unpredictable?

This is the case for most businesses – you’re not alone. Unless you sell on a subscription basis, sales will go up and down. But in the meantime, you still have to pay for rent and equipment. And you absolutely must make payroll.

What is Business Revenue Financing?

It’s also called royalty-based financing. This is a way to raise capital from investors who get a percentage of the enterprise’s ongoing gross revenues, in exchange for money invested. In a revenue-based financing investment, investors get a regular share of business income until a predetermined amount is paid. Often, this predetermined amount is a multiple of the principal investment. It is usually between three to five times the original amount invested.

The business must make regular payments to pay down an investor’s principal. But this method of financing is different from debt financing. For one thing, interest is not paid on an outstanding balance. And there are no fixed payments. Payments to investors directly relate to how well a particular business is doing. If sales dry up, the investor gets a lower royalty payment.

Demolish your funding problems with 27 killer ways to get cash for your business.

What About Equity Financing?

It’s also different from equity financing. The investor does not have direct ownership in the business. Hence revenue-based financing is often felt to be a hybrid, between debt financing and equity financing.

In some ways, business revenue financing is like account receivable financing. With AR financing, a company uses receivables (outstanding invoices or money owed by customers) to get financing. The company gets an amount equal to a reduced value of the receivables pledged. The age of the receivables affects the amount of financing the company gets. See investopedia.com/terms/r/revenuebased-financing.asp.

Because repayment of the loan is based on revenues, the time it takes to repay the loan will fluctuate. The faster revenue grows, the quicker you’ll repay the loan, and vice versa.

The percentage of monthly revenues committed to repayment can be as high as 10%. Monthly payments will fluctuate with revenue highs and lows and will continue until you’ve paid back the loan in full.

The duration of the loan ultimately depends on the success of the business. The faster the business grows, the faster the loan is repaid. The RBF provider sees better returns the faster you pay the loan in full. This is one reason the underwriting process focuses not only on your current revenues, but also on your business’ potential to quickly increase revenues.

Providers will expect you to have a plan to increase your existing business revenue tenfold, as part of the application process.  Since the loan is based on your current revenue stream, lenders will want to see potential growth opportunity for your business.

Investors’ expectation is that the funds that they lend you will be used to start and support planned growth. This is like what venture capitalists would ask for through a fundraising process. See fitsmallbusiness.com/revenue-based-financing.

Which Companies is Business Revenue Financing Best For?

Business revenue financing is perfect for entrepreneurs looking for fast, easy money with little headaches. You can easily get approval for financing as much as $500,000, within 72 hours, based on a simple review of business bank statements.

This program works to help clients get funding, based strictly on cash flow as verifiable per business banks statements. Lenders will not ask for financials, business plans, resumes, or any of the other burdensome document requests that most conventional lenders demand. You can get approval even with bad credit.

One class of businesses which find RBF appealing are those too small to attract venture capital. This also includes businesses which would not normally attract VCs, like mom and pop businesses. VCs are more interested in industry-disrupting businesses.

Businesses can still have solid revenue streams, even if VCs don’t take an interest. Such solid revenue streams can grow and be sustainable for a long time. BRF can be a good fit for companies that fit this mold, because revenue-based lenders make loans based on growth potential. They are not looking for the huge returns that venture capitalists demand.

BRF is great for companies where the ownership wants to retain control. Some businesses will be growing quickly enough to attract the attention of venture capitalists. But the ownership might not like the idea of diluting their equity or giving some degree of control to a venture capitalist. With RBF, you get a loan to repay to the lender. It does not require release of an equity stake in your business, as you would have with funding from a VC.

Demolish your funding problems with 27 killer ways to get cash for your business.

Did You Know that Credit Suite Offers Business Revenue Financing?

Credit Suite works directly with lenders. We work with hundreds of investors and lenders, through several different funding programs. These lenders all offer their own different and unique lending requirements. It can be tough to navigate these alone and know all your options. This is where we help. For more information, go to creditsuite.com/business-loans.

How Do You Qualify for Business Revenue Financing?

This program is one of the easiest, most hassle-free ways you can get business funding. To determine approval, lender will often review 4 – 6 months of bank statements. All the lenders are looking for is consistent deposits. They want to see deposits showing your revenue is $120,000 or more, with $150,000 required for unsecured.

Lenders will also verify that you have been in business one year or more. Lenders are also looking to see that you don’t have a lot of Non-Sufficient Funds (NSFs) showing on your bank statements. They also want to see more than 8 deposits in a month going into your bank account. In essence, all they are looking for is that you manage your bank account responsibly and have a decent number of consistent deposits. If you meet these simple criteria, you can get approval!

Can You Qualify for Business Revenue Financing If You Have Credit Issues Now?

Our revenue financing program is perfect for business owners with credit issues. Lenders are not looking for, nor do they require, good credit to qualify.

You can even get approval with severely challenged personal credit and poor credit scores. You can get approval regardless of personal credit quality, even if you have severe recent derogatory items and collections on your credit report. This is one of the best and easiest business financing programs that you can qualify for, even if you have personal credit problems.

Demolish your funding problems with 27 killer ways to get cash for your business.

Get Fast Funding with Business Revenue Financing

You can get pre-approval for our revenue financing program, within 24 hours. Also, you can get a formal approval, within 72 hours from submitting your application.

Get your money in your bank account, within 7 days or less from applying. Our clients love this program partly due to how easy it is to apply and get approval, and how FAST you get your funds!

You can get money consistently from our Business Revenue Financing Program. Over 80% of our clients come back for even more financing after their initial approvals. Typically within 3 – 6 months of approval, you will get an opportunity to get even more money than you got before. And all you will need for approval for additional funding is a quick review of your last 2 months bank statements.

You can get your money in your bank account within 24 hours or less. Our revenue financing program helps you rapidly grow and scale your business. You will have ongoing access to receive more and more funding easily, and very quickly, just when you need it!

What are the Benefits of Business Revenue Financing Through Credit Suite?

Get 24-hour pre-approval. Loan amounts to $500,000; $150,000 for unsecured. Application to funding in 7 days or less. Get approval for additional future funding. Easy bank statement review for approval.

Pay no application fees. Also, get approval with bad credit. There are no collateral requirements. 3 to 36 month financing terms. Get approval for up to 12% of annual revenue.

Business Revenue Financing: Takeaways

Business revenue financing is a means of getting a loan. Investors lend based on your business’s potential to grow and earn. Your business pays the loan back with royalty payments. Royalty payments go up and down based on business revenue. If your business makes less, then you pay back less. BRF investors often get three to five times what they put in.

Business revenue financing works well for businesses too small or conventional to attract VC interest. It’s also good for businesses where there is VC interest, but the ownership wants to retain control. It’s also good for entrepreneurs with poor personal credit. All they need to do is show revenues. Credit Suite offers a business revenue financing program. We help you navigate the complexities of several lenders with varying requirements. Let’s take the next step together.

The post Business Revenue Financing appeared first on Credit Suite.

Ecommerce Startup Inventory Financing

How Can Ecommerce Business Startup Inventory Financing Help Your Business? Selling goods online? Then you might need Ecommerce startup business inventory financing. Our World Has Changed – and It’s Gone Even More Online Ecommerce is where it’s at. Not convinced? While there was already a lot of online commerce, in March of 2020, due to … Continue reading Ecommerce Startup Inventory Financing

How to Solve Your Business’s Lack of Capital with 401k Business Financing

How Can 401k Financing Help a Business?

The world of business involves many risk-taking attempts. Business owners experience numerous obstacles from the moment they plan and start their business to maintain it and make sure it grows. From developing your business ideas to looking for qualified people to hop on board your venture, starting a business takes a lot of courage, patience, and knowledge. Financing via a 401k could be an avenue you haven’t thought of.

All businesses face different kinds of hurdles and challenges in the process of starting and growing their venture. The Small Business and Trade Alliance conducted the Small Business Trends survey on over 2,400 current and aspiring business owners in the United States. This survey included questions about their current biggest obstacles as business owners.

It’s Even More Important Now

Although the pandemic, without a doubt, can be considered one of the greatest challenges of 2020, the survey also contained questions about non-pandemic-related challenges. Among these top challenges include recruiting and retaining employees, marketing and advertising, time management, administrative work, and managing and providing benefits. The number one challenge, at 23%, however, is the lack of capital or cash flow.

In the United States, around 20% of small businesses fail in their first year and 50% in their fifth year. The lack of capital is one of the numerous reasons small businesses end up throwing in the towel.

Business owners are usually thoroughly aware of and keep a close watch on how much money is needed to keep the company or the business going. It includes expenses such as daily spending, payroll funding, paying fixed and varied overhead expenses like rent and utilities, and payments for external vendors or suppliers. They also make sure to explore various and alternative investment strategies as a way to increase their funds.

Keep on Top of Things

On the other hand, business owners who do not closely monitor expenses and revenue generated from sales of products or services are more likely to fail than succeed. In addition, it can lead to inadequate funding, which could ultimately put the business out of operation.

With this, it is critical for aspiring and current business owners to be in tune with the financial state of their business. Financial challenges and hurdles are inevitable and are part of the business process. However, business owners must explore various ways to fund their venture. There are several ways to get financing for your business. Getting business loans is one of the most common methods to do this.

Another way to solve your business’ lack of capital is to consider 401(k) financing. What is 401(k) financing? First, this article will discuss what 401(k) financing is and how it works. Next, it will tell you more about how 401(k) financing can solve your business’ lack of capital and, lastly, the benefits and possible risks that come with it.

Demolish your funding problems with 27 killer ways to get cash for your business.

What is 401k Business Financing?

401k Credit Suite401(k) business financing is one way your small business can solve its lack of capital. Also referred to as Rollovers for Business Start-Ups (ROBS), 401(k) business financing is a small business financing method. This method allows you to withdraw money from your retirement account to start or fund your business without having to pay a tax penalty or an early withdrawal fee.

An important thing to note is that Rollovers for Business Start-Ups merely gives you access to the funds you have in your existing retirement account. This method is ideal for those aspiring and current business owners who lack capital but do not qualify for a loan, do not want to go into debt or do not have any cash-on-hand available to fund their business. This method does not consider your credit score, on-hand collateral, or past experiences to qualify for it. The main components of this method would be the retirement account you have. Such as a 401(k) or an Individual Retirement Account (IRA), and the amount of money you have in it.

Demolish your funding problems with 27 killer ways to get cash for your business.

How does 401k Business Financing Work and How Does It Solve a Business’ Lack of Capital?

In 401(k) business financing, your retirement plan serves as your investor. To access these funds without having to pay a tax penalty for early withdrawal fees, it is critical to, first and foremost, establish a ROBS (Rollover Business Start-Ups). This structure consists of several components which must adhere to certain requirements for compliance with the Internal Revenue Service, or IRS—the federal agency responsible for overseeing, administering, and collecting taxes.

The first step would be to establish a C corporation, also known as a regular corporation. It is the only entity type allowed to sell shares to a retirement account and within the ROBS structure. In this way, it will help release your business’s funds.

Your New Plan

Next, put together a retirement plan for your new business. Although there are other options such as profit sharing and defined benefits, most business owners opt for the standard 401k. You will need a custodian to manage the investments in the plan and have the responsibility to keep records, administer the plan, and modify its investments the way you deem fit.

After this, roll your existing retirement funds from your plan into the new retirement plan under the C corporation. Since the funds have already been rolled over to the company retirement plan, the plan then buys stock in the C corporation through a QES transaction or a Qualified Employer Securities transaction. Thus, it is the step wherein the money is rolled over and made available for the business to use.

Why Do It This Way?

The first step is essential since you would not be able to do a QES transaction without it. Finally, once the QES transaction is finished, your retirement funds can now be accessed by the corporation. You can use them to solve your business’s lack of capital. Or you can pay off the pending expenses you may have.

The Benefits of 401k Business Financing

401(k) financing, also known as ROBS or Rollover Business Start-Ups, offers numerous benefits for aspiring and current business owners alike. This financing technique may come off as complex. Still, it is one of the ways to solve your business’ lack of capital. Here are some of the benefits of 401(k) business financing:

Flexibility and control over investments

In 401(k) financing, you have control over your retirement funds. It allows you to support your business and make it grow financially. Through this, your business has the potential to earn a significant return with tax-deferred growth.

Terminate or reduce debt

Most loans require monthly payments, which may eventually turn into debt. Unlike most loans, 401(k) financing gives you the ability to use the funds you already have. In addition, since 401(k) financing does not require you to pay interest, it helps reduce your day-to-day costs and other operating expenses you may have.

Collateral free

The only requirement of 401(k) financing is a qualified retirement account. You will not need to put up a down payment or sign over a property to receive the funds. This is unlike most financing methods that will require you to do so.

No credit check

Since 401(k) financing is not considered a loan, a credit check is not included in its requirements. With this, no evaluation will occur, and you can proceed with 401(k) business financing even if you have a low credit score, as long as you have a retirement plan.

Deposit via ROBS

The funds in your 401(k) plan may also be used as a down payment for your small business loan (SBA). Reducing debt is considered to be one of the top benefits of 401(k) business financing.

Demolish your funding problems with 27 killer ways to get cash for your business.

Final Thoughts on Using Your 401k for Business Funding

Aspiring and current business owners are no strangers to the challenges and obstacles of starting up and growing a business. Although these hurdles may be intimidating and sometimes overwhelming, you can overcome them.

One of the top challenges small business owners face, aside from the impact and effects of the pandemic, is the lack of capital. However, this is a matter that you can solve through 401(k) business financing. When done correctly, it helps business owners fund their venture. And it does so without worrying about tax penalties, early withdrawal fees, and falling into debt.

Navigating 401k business financing and how it can help solve your business’ lack of capital can seem intimidating if it is new and unfamiliar to you. However, finding the right company that offers a 401(k) financing program can help ease your worries.

We Can Help!

Let Credit Suite help you with that! Credit Suite offers a wide range of programs, from their 401(k) financing program to other business loans and business credit programs. So whether it be a 401(k) financing plan or other business loan and credit programs, Credit Suite has got you and your business covered!

401k Credit Suite

 

Jill Santos is an early childhood educator and a freelance content writer for The Stock Dork. She is passionate about serving others through research, education, and the arts.

 

The post How to Solve Your Business’s Lack of Capital with 401k Business Financing appeared first on Credit Suite.

Is it Possible to Get Flexible Financing for Your Business?

Can You Get Flexible Financing for Your Business?

Absolutely! Flexible financing exists for virtually any business – even startups! You just need to know your strengths.

The 3 Cs Capital Acquisition Formula

When you think like a lender, you realize they just want to be assured that you’ll pay them back. Lenders look at one of three things for loan approval: cashflow, collateral, and/or credit. The more of these “Cs” you have, the more funding options are available. For the many forms of funding we’re showcasing today, we show you exactly what you need to have for approval.

Flexible financing can absolutely be yours.

Fundability and Flexible Funding Options

Fundability is the ability of a business to get funding. It essentially covers all the points a lender or credit provider will be looking at when they’re trying to figure out if you’ll pay back a loan or credit extended to you. These include factors you probably haven’t thought about or might think aren’t so important. But they are!

The fundability of your business will affect your terms and how much you can get. For flexible financing, you want to be as fundable as possible.

Flexible Funding with Good Personal Credit

When it comes to flexible funding, let’s look at what you can get with good personal credit. Good personal credit is always an asset and will always help you out. If you don’t have good personal credit, you can often use a credit partner or guarantor who does.

Credit Line Hybrid

A credit line hybrid is a form of unsecured funding. Our credit line hybrid has an even better interest rate than a secured loan. Get some of the highest loan amounts and credit lines for businesses. Get 0% business credit cards with stated income. These report to business CRAs. You can build business credit at the same time. This will get you access to even more cash with no personal guarantee.

Credit Line Hybrid: Terms and Qualifying

You need a good credit score or a guarantor with good credit to get an approval (a FICO score of at least 680). No financials required. You can often get a loan of five times the amount of current highest revolving credit limit account. This is up to $150,000.

Traditional Term Loans

Traditional term loans are also looking for good personal credit.

Banks are often the first place we think of when we thinking of financing. But big banks only sign off on about 25% of the small business loan applications that come their way. Term loans often have lower interest rates than many other funding options. They also tend to be for higher loan amounts.

Term Loans: Terms and Qualifying

Generally speaking, the companies banks end up funding have very strong financials and near-perfect credit scores. You will most likely have to undergo a personal credit check. These kinds of loans may require collateral. Term loans tend to not be terribly flexible financing. 

Demolish your funding problems with 27 killer ways to get cash for your business

Flexible Funding with Business Credit

Building business credit will always be a good idea. In particular, it can make your funding options far more abundant and flexible.

It should be your goal to build business credit, even if you can get funding elsewhere. Business credit will help your company for years to come. It is credit linked to your EIN and not your SSN.

This credit is available without a personal guarantee. It is available regardless of personal credit. You can get business credit immediately. Business credit is the only way to get money for a business when you don’t have collateral, cash flow, good personal credit, or a guarantor.

Vendor Credit

Starter vendors are open to working with most businesses, even startups. Make sure vendors report to the CRAs – not all do. When they do report, it’s within 60 days. They help you build your business credit profile and score.

Terms vary depending on the vendor, but they tend to be Net 30. And you will not need collateral, good personal credit, or cash flow.

Retail Credit

Retail credit comes from major retailers. Buy everything from office supplies to power tools. Retailers will check if your business information is uniform everywhere. They will also check whether your business is properly licensed.

There can be a minimum time in business requirement. There may even be a minimum number of employees requirement, or a minimum annual sales requirement. Terms can be revolving. You will need at least 3 (5 is better) accounts reporting to the business CRAs.

Fleet Credit

Fleet credit is used to buy fuel, maintain vehicles of all sorts, and repair vehicles. Even businesses which don’t have big fleets can still benefit. These are usually gas credit cards.

There may be a minimal time in business requirement. If your business doesn’t make the time in business requirement, you may be able to, instead offer a personal guarantee or give a deposit to secure the credit.

Cash Credit

Cash credit comes from universal-type credit cards like MasterCard. So they can be used pretty much anywhere. These cards may even have rewards programs.

Terms can be revolving. Usually, you need at least 14 accounts reporting to the business CRAs. There can be longer time in business requirements. And there may also be minimum number of employee requirements.

Flexible Financing with Collateral

Having collateral can help you get many types of financing.

401(k) Financing

This is not a loan. You will not have to pay an early withdrawal fee or a tax penalty. You put the money back by contributing, just like with any 401(k) program. This means you won’t lose your retirement funds. This is a 401(k) Rollover for Working Capital program. The IRS calls it a Rollover for Business Startups (ROBS).

Per the IRS, a ROBS qualified plan is a separate entity with its own set of requirements. The plan, through its company stock investments, rather than the individual owns the trade or business. Therefore, some filing exceptions for individuals may not apply to such a plan. This type of financing isn’t a loan against, your 401(k), so there’s no interest to pay. It does not use the 401(k) or stocks as collateral. Instead, this is simply a movement or change of custodian.

401(k) Financing: Terms and Qualifying

Low rates, often less than 5%. Your 401(k) must have more than $35,000 in it . Can usually get up to 100% of what’s “rollable” within your 401(k).  The lender will want to see a copy of your two most recent 401(k) statements.

Get 401(k) financing even with severely challenged personal credit. The 401(k) cannot be from a business where you are currently employed. You cannot be currently contributing to it.

Equipment Financing

Equipment financing is when you use a loan or lease to purchase or borrow hard assets for your business. It is a business financing option you can use to buy any physical asset. Physical assets can include items like a restaurant oven or a company car. You pay predictable amounts every month. You can build business credit on a program such as this.

Equipment Financing: Terms and Qualifying

All terms are for equipment financing through Credit Suite. Companies must have at least one year in business. You can get approved even with challenged credit. You won’t need financials to secure equipment financing. Approvals take as little as 24 hours.

Equipment Sale-Leaseback

If you already own your equipment free and clear you can use that as collateral for financing. Sell equipment to a lender for cash. Then lease it back from them. You can unlock Section 179 tax savings, and depreciate your entire equipment purchase in the first year.

Equipment Sale-Leaseback: Terms and Qualifying

Term lengths and the amount you can finance will vary. You’ll need at least one larger piece of higher value equipment to qualify. Funding can be in as little as 3 weeks. In general, a lender wants to be sure your equipment does not have any liens against it.

Demolish your funding problems with 27 killer ways to get cash for your business.

Inventory Financing

Inventory financing is a revolving line of credit or a short-term loan acquired by a company so it can buy products for sale later. The products serve as the collateral for the loan. There may be restrictions on the type of inventory you can use. This can include not allowing cannabis, alcohol, firearms, etc., or perishable goods. There can be revenue requirements. And there may also be minimum FICO score requirements.

Inventory Financing: Terms and Qualifying

Get approved for a line of credit for 50% of inventory value, regardless of personal credit quality. Rates are usually 5 – 15% depending on type of inventory. Get funding within 3 weeks or less. It can’t be lumped together inventory, like office equipment.

Shopify Capital

With Shopify Capital, you can get inventory financing with 12-month terms. Pay back with a percentage of daily sales. Borrow between $200 and $1 million. The total owed and daily repayment rate depend on risk profile.

OnDeck

OnDeck offers inventory loans and business lines of credit. Term loans runs $5,000 to $250,000, with 12-month terms paid back daily or weekly. Lines of credit run from $6,000 to $100,000. Pay back over 12 months, with automatic weekly payments.

Demolish your funding problems with 27 killer ways to get cash for your business.

Flexible Financing with Cash Flow

If you can prove your business has good cash flow, several options open up to you.

Cash Flow Financing

A loan made to a company is backed by a company’s expected cash flows. A company’s cash flow is the amount of cash that flows in and out of a business, in a specific period. Cash flow financing (or a cash flow loan) uses generated cash flow as a means to pay back the loan.

Often you will need to have a few years in business. You may need to meet a certain minimum credit score requirement. You will need to prove historical cash flow. Present your accounts receivables and accounts payables. This way, the lender can determine how much to loan to your business.

Account Receivables Financing

Use outstanding account receivables as collateral for financing. Receivables should be with the government or another business. If you also have purchase orders,  you can get financing to have those filled. You won’t need to use your cash flow to do so. Get an accounts receivable credit line with rates of less than 1% with no consumer credit requirement. Receivables should be with the government or another business.

Use outstanding account receivables for financing. Get as much as 80% of receivables advanced ongoing in less than 24 hours. Remainder of the accounts receivable are released once the invoice is paid in full. Factor rates as low as 1.33%. you can get an accounts receivable credit line with rates of less than 1% with no consumer credit requirement.

Amazon Bank of America

Amazon Lending launched in 2011 and partners with Bank of America Merrill Lynch. This allows Amazon to reduce its risk and access capital specifically to provide credit to more merchants so they can get inventory. Amazon Lending is an invitation-only program. Participants get exclusive price and quantity discounts on over 5 million products. See amazon.com/b?ie=UTF8&node=17906292011.

Eligibility is (in part) tied to cash flow). The program makes loans of $1,000 to $750,000. Its terms are for up to a year. These loans are for companies that may have difficulty landing traditional business loans. Within 5 days of being approved, you can get 20% off your first $500.

Amazon Marcus

Currently, lines of credit are offered by Marcus by Goldman Sachs. Get access to loan funds within 5 days. Goldman Sachs will check your creditworthiness. No prepayment penalty. See sell.amazon.com/programs/amazon-lending.html.

If your business is eligible, you will see funding options when you log into Seller Central. Loans come from Amazon Lending – specific terms are tailored to the business. Amazon may review your business credit history with one or more credit bureaus. Get 3-, 6-, 9-, or 12-month term loans for working capital needs.

Amazon Corporate Card

Got an online business? Then you can get a revolving credit line. Enjoy 24/7 Customer Service. For customers with over $100,000 annual spend on their accounts, they can work with an account specialist assigned specifically to the account. Amazon will proactively help you maximize the value of your line of credit and adopt new product features.

Get 55-day payment terms. Pay 12.99% purchase APR (minimum interest charge is $1). There is an option to apply as a personal guarantor to build business credit. You can make minimum payments or pay in full monthly.

Fundbox

Fundbox will connect directly to your online accounting software. That’s all you need to do. You can get invoice financing or a line of credit. See fundbox.com.

Get a revolving line of credit for up to $150,000. Fundbox will auto debit your weekly payment from your bank account. You don’t need to show a minimum personal credit score, and you don’t need to show a minimum time in business.

Merchant Cash Advances

An MCA technically isn’t a loan. Rather, it is a cash advance based on company credit card sales. A small business can apply for an MCA and have an advance deposited into its account fairly quickly. So you can offer Net 30 terms, but not have to wait a month to get paid.

A merchant financing program is ideal for business owners who accept credit cards and want fast and easy business financing. An MCA program is designed to help you get funding, based strictly on your cash flow as verifiable per business bank statements. Hence lenders in general will not ask for any burdensome document requests.

Merchant Cash Advances: Terms and Qualifying

A lender will review 3 months of bank and merchant account statements. They are looking for consistent deposits. And they want to see deposits showing revenue is $50,000 or higher per year. They will also verify time in business of 6 months or more.

Lenders are also looking to see that you don’t have a lot of Non-Sufficient-Funds (NSFs) showing on your bank statements. They want to see you don’t have a lot of chargebacks on your merchant statements. And they want to see that you have more than 10 deposits in a month going into your bank account.

In essence, they want to see that you manage your bank and merchant accounts responsibly. And they want to see that have a decent number of consistent credit card transaction deposits each month.

PayPal

Get a loan from PayPal. Loan amounts and eligibility depend on your sales via PayPal. You will need to be in business for at least 9 months. See paypal.com/us/webapps/mpp/paypal-business-loan.

PayPal Terms and Qualifying

Get from $5,000 to $500,000. The highest loan you can get goes up to 35% of your annual PayPal sales. If you apply for a PayPal loan, credit checks and other public records checks will be performed which may impact your credit score.

Funding from the SBA

The Small Business Administration has several options which could work for you. You usually need to show good cash flow, good personal credit, and have collateral. Having good business credit will also help your cause. But it’s not terribly flexible financing.

SBA 7(a)

This the SBA’s most popular loan. The SBA guarantees 85% for loans up to $150,000, and 75% for loans greater than $150,000. The SBA makes the lending decision, but qualified lenders may be granted delegated authority to make credit decisions without SBA review.

The maximum amount on offer is $5 million. You will have to provide Articles of Organization, business licenses, documentation of lawsuits, judgments and bankruptcy or other pertinent documentation. Lenders are not required to take collateral for loans up to $25,000. For loans over $350,000, the SBA requires that the lender collateralize the loan to the maximum extent possible up to the loan amount.

SBA 504

This is an economic development loan program offering long-term, fixed-rate financing used to acquire fixed assets for expansion or modernization.

Use it to buy currently existing buildings, construct new buildings, and more. See sba.gov/offices/headquarters/ofa/resources/4049.

For corporations, anyone with a 20% ownership stake (or more) must fill out the application. In general, the SBA provides 40% of the total project costs, a participating lender covers up to 50% of the total project costs, and the borrower contributes 10% of the project costs. Under certain circumstances, borrower may have to contribute up to 20% of total project costs.

SBA CapLines

There are four kinds of CapLines: Contract, Working Capital, Builder’s, and Seasonal. For all of them, you can get a loan up to $5 million. Qualification requirements are same as with other SBA programs. Builder’s loans cannot exceed 5 year terms; the others can go up to 10 years. Holders of at least 20% ownership in the applicant business are required to guarantee these loans. Most loans can be revolving or non-revolving.

SBA Contract Line

This loan finances direct labor and material cost, associated with performing assignable contracts.

SBA Working Capital

Borrowers must use loan proceeds for short term working capital/operating needs.

SBA Builder’s Line

This one is for general contractors or builders who are constructing or renovating commercial or residential buildings. It finances direct labor-and material costs. The building project serves as the collateral.

SBA Seasonal Line

Advances against anticipated inventory and accounts receivables, or in some cases associated increased labor costs. It is meant to help seasonal businesses.

SBA Microloans

SBA microloan lenders are nonprofit community-based organizations with experience in lending as well as management and technical assistance. The SBA provides funds to specially designated intermediary lenders. These intermediaries administer the microloan program. It is to help small businesses and certain not-for-profit childcare centers start up and expand.

Get loans for up to $50,000. The average microloan is about $13,000. Generally, intermediaries require some type of collateral as well as the personal guarantee of the business owner. See sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs/microloan-program%20

Grants

Grants are exceptionally competitive but there’s little wonder – you never have to pay them back! But they are also the antithesis of flexible financing – you will need to meet requirements and jump through a number of hoops.

Federal Grants

For urban projects, try HUD (Housing and Urban Development). For rural projects, try the USDA. But federal funding means paperwork. You often must show experience in what you are proposing. See grants.gov.

Grants have varying qualifications. Check information thoroughly, like due dates and any necessary paperwork. Some grants may offer preferences to businesses with minority, female, veteran, or disabled ownership.

Local, City, and State Grants

Your local government also provides grants. See grantwatch.com. Also try city and state websites. These are often less restrictive than federal grants. It helps if you can show you will help the community. Try to partner with a local business.

Just like with federal grants, check all requirements and other information carefully. You may need to be a resident of the state or city or county in question. Or your business may need to be headquartered there.

Funding from Giving Up Part of Your Business

Angel Investing

Angel investors invest in small startups or entrepreneurs. Often, angel investors are among an entrepreneur’s family and friends. The capital they provide may be a one-time investment to help the business get started, or an ongoing injection of money to support and carry the company through its early stages.

Angels are not covered by the Securities Exchange Commission’s (SEC) standards for accredited investors. Angels could be friends or colleagues sitting on home equity, or local professionals who are looking to invest. Consider people you know well and people you don’t know so well.

Angel Investing: Terms and Qualifying

Angels are informal investors so there really aren’t any terms. Technically, there is nothing done for qualifying, although investors may (probably should) insist on a valuation of your business. No matter what, it’s always a good practice to get everything in writing.

Angel investing can practically be the definition of flexible financing, seeing as it’s so informal.

Venture Capital

Venture capitalists give money to help build new startups, if the VCs believe a company has both high-growth and high-risk potential. These tend to be fast-growth companies with an exit strategy already in place. Venture capitalists often look to recover their investment within a 3-5 year time frame.

VCs will also, often, want to own a large piece of a company if not a controlling stake. They want game-changing businesses, so straightforward businesses won’t be on their radar unless it’s shifting the paradigm. VCs often want a larger share of your business than angel investors do.

Venture Capital: Terms and Qualifying

Since venture capitalists are more formal investors than angels, a valuation of your business is likely to be necessary. Specific terms will be spelled out in your agreement with them. The SEC will also have requirements. It is best practices to consult with a lawyer well-versed in business law before you sign anything.

Equity Crowdfunding

Equity crowdfunding is a stock offering from a company that is not listed on stock exchanges. It has been around for less than 10 years. It’s not the same as rewards-based (which comes from places like Kickstarter). Rather, potential investors visit a funding portal website. There, they can explore different equity crowdfunding investment opportunities. But note: there are limits on how much capital an individual can invest based on their income and net worth. Hence equity crowdfunding gives investors a stake in your business.

Equity Crowdfunding: Terms and Qualifying

Equity crowdfunding tends to be covered by numerous federal regulations. See: law.cornell.edu/cfr/text/17/227.100.

Federal law can be complex. It is best practices to consult with an attorney well-versed in federal law, specifically, securities and corporations, when it comes to interpreting terms and qualifications (and any changes that may be made to these aspects of the law in the future).

Flexible Financing: Takeaways

This is an enormous buffet of business funding choices! But how do you select the one(s) that’s best for your particular situation? This is where our Advisory Team comes in extremely handy. Or help yourself with our Business Credit Builder. It’s your choice.

There are all sorts of amazing ways to get business funding. You can find the one which fits your circumstances, including your strengths in areas like:

  • Personal credit
  • Collateral or
  • Cash flow

Or build business credit for even more choices. Now that’s flexible financing.

The post Is it Possible to Get Flexible Financing for Your Business? appeared first on Credit Suite.

Equipment Financing and Leasing

If You Need to Modernize, Equipment Financing and Leasing Can Make that Much More Affordable

Does your business need equipment? Some of it can be extremely expensive. For a new business in particular, affording equipment can feel like an impossible dream. But you have got to have that equipment to make money! How do you make it past this frustrating Catch-22? You do it with equipment financing and leasing.

What is Equipment Financing and Leasing?

Equipment financing is when you use a loan or lease to purchase or borrow hard assets for your business. It is a business financing option you can use to buy or lease any physical asset. Physical assets can include items such as a restaurant oven or a company car. See nav.com/business-financing-options/equipment-financing.

Why Do Companies Use Equipment Financing and Leasing?

A recent the Equipment Leasing and Finance Association (ELFA) survey found that 80% of American businesses lease a portion of their equipment. The list of companies using leasing ranges, from the Fortune 500 to a mom and pop store. See entrepreneur.com/article/225959.

Advantages

You will pay predictable amounts every month. You can build business credit on a program such as this. The equipment is great collateral, the lender probably will not want any other collateral.

You will often put down less money than you would if you were buying the piece of equipment. You may be able to negotiate flexible terms with an equipment lease. It is easy to upgrade equipment after your lease ends. This is helpful if your equipment is something like a computer which quickly becomes obsolete.

Disadvantages

You may have to pay a large down payment. You will often need to have good personal credit in order to qualify. If your financed equipment becomes outdated, your business is stuck with it until the end of the lease for loan.

Also, leases can often end up costing more than purchasing. When the lease ends, you will need a new lease or to make some other arrangement. Buying a piece equipment means it is yours to keep or to sell.

Demolish your funding problems with 27 killer ways to get cash for your business.

Questions you Should be Asking

What equipment do you need and for how long? Do you want to bundle service, supplies, training, and the equipment lease into one contract? Have you anticipated your company’s future needs so you get adequate equipment? What is the total payment cost?

Important Things You Need to Know About Any Lease

Who will you be dealing with? Is there a separate company financing the lease? How long has the company been in business? Do you understand the terms and conditions during and at the end of the lease?

Is casualty insurance a requirement to cover damage to the equipment included? Who pays the personal property tax? What are the options regarding upgrading and trading in equipment before the lease period expires? Who is responsible for repairs?

Fair Market Value Leasing

Also known as an FMV lease. With an FMV lease, you make regular payments, while borrowing the equipment for a set term. When the term is up, you have the option to return the equipment, or purchase it at its fair market value.

$1 Buyout Leases

This is a type of capital lease. You pay off the cost of the equipment, plus interest, over the course of the lease. In the end, you owe exactly $1.

Once you pay the $1 residual.  which is essentially a formality, you fully own the equipment. This type of lease is very similar to a loan in terms of structure and cost.

10% Option Leases

This lease is the same as a $1 lease. But at the end of the term, you have the option to buy the equipment for 10% of its costs. These tend to have lower monthly payments than a $1 buyout lease.

Demolish your funding problems with 27 killer ways to get cash for your business.

How Much Can a Lease Cost?

Here is an example. Let us say you are leasing a $25,000 piece of equipment. Call it a 10% option, and a 36 month term.

The value of the Equipment is$25,000. The interest Rate is 15%. The term Length is 36 months. The monthly Payment is $780. The total Cost of Leasing equals $28,079. And the cost to Purchase is $2,500. Hence the total Cost of Equipment is $30,579. See merchantmaverick.com/equipment-financing.

With the example, you would be paying an extra $5,579 over the course of the lease. That is over 1/5 more added, to your total cost for the equipment.

If you bought the equipment from the start, you would pay $25,000. So you would be in $25,000 in the hole from the beginning. But with leasing, you have not spent the total $25,000 until over 2 ½ years have gone by. In the meantime, you can invest that money or earn interest on it.

Demolish your funding problems with 27 killer ways to get cash for your business.

Did You Know Credit Suite Offers Equipment Financing and Leasing?

We offer equipment financing and leasing programs. Companies must have at least one year in business. You can get approval even with challenged credit. You will not need financials to secure equipment financing. Approvals take as little as 24 hours.

Check out the easy qualification process. You can get approval with as low as a 640 personal credit score. For approval, lenders will request details on the equipment you are getting. After a quick credit review, you can get approval for as much as $10,000,000 in equipment financing.

Equipment leasing is powerful! We help business owners get financing to lease equipment. With equipment leasing you receive even more favorable terms than typical business financing programs, with even more benefits. Whether you are a startup business or a well-established business, we have hundreds of equipment lenders who would like to help.

Equipment Leasing Rates and Payments

You can qualify with only two monthly payments as a down payment. And you can get approval with a credit score as low as 640. Rates are affordable and 100% of your interest is tax deductible. Plus, you can get financing up to $10,000,000.

Benefits

You can enjoy 24-hour pre-approval. And you pay no application fees. Interest is tax deductible. Go all the way from application to funding in 2 weeks or less. Purchase, lease, or borrow against existing equipment.

Heavy equipment financing is available. We have loans for up to $10,000,000. And you can get approval with average credit. The equipment serves as collateral. Note: financials are necessary.

Equipment Financing and Leasing: Takeaways

Businesses often have fluctuating revenue. But they still have to have equipment. And for new businesses, they have to have equipment to get going, but they can never seem to be able to afford it.

This type of funding can be the ideal solution. There are advantages and disadvantages to leasing equipment, just like any other form of lease versus purchase. Credit Suite offers equipment financing and leasing. We help you navigate multiple dissimilar offers and make sense of it all. Let’s take the next step together.

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Equipment Financing and Leasing

If You Need to Modernize, Equipment Financing and Leasing Can Make that Much More Affordable

Does your business need equipment? Some of it can be extremely expensive. For a new business in particular, affording equipment can feel like an impossible dream. But you have got to have that equipment to make money! How do you make it past this frustrating Catch-22? You do it with equipment financing and leasing.

What is Equipment Financing and Leasing?

Equipment financing is when you use a loan or lease to purchase or borrow hard assets for your business. It is a business financing option you can use to buy or lease any physical asset. Physical assets can include items such as a restaurant oven or a company car. See nav.com/business-financing-options/equipment-financing.

Why Do Companies Use Equipment Financing and Leasing?

A recent the Equipment Leasing and Finance Association (ELFA) survey found that 80% of American businesses lease a portion of their equipment. The list of companies using leasing ranges, from the Fortune 500 to a mom and pop store. See entrepreneur.com/article/225959.

Advantages

You will pay predictable amounts every month. You can build business credit on a program such as this. The equipment is great collateral, the lender probably will not want any other collateral.

You will often put down less money than you would if you were buying the piece of equipment. You may be able to negotiate flexible terms with an equipment lease. It is easy to upgrade equipment after your lease ends. This is helpful if your equipment is something like a computer which quickly becomes obsolete.

Disadvantages

You may have to pay a large down payment. You will often need to have good personal credit in order to qualify. If your financed equipment becomes outdated, your business is stuck with it until the end of the lease for loan.

Also, leases can often end up costing more than purchasing. When the lease ends, you will need a new lease or to make some other arrangement. Buying a piece equipment means it is yours to keep or to sell.

Demolish your funding problems with 27 killer ways to get cash for your business.

Questions you Should be Asking

What equipment do you need and for how long? Do you want to bundle service, supplies, training, and the equipment lease into one contract? Have you anticipated your company’s future needs so you get adequate equipment? What is the total payment cost?

Important Things You Need to Know About Any Lease

Who will you be dealing with? Is there a separate company financing the lease? How long has the company been in business? Do you understand the terms and conditions during and at the end of the lease?

Is casualty insurance a requirement to cover damage to the equipment included? Who pays the personal property tax? What are the options regarding upgrading and trading in equipment before the lease period expires? Who is responsible for repairs?

Fair Market Value Leasing

Also known as an FMV lease. With an FMV lease, you make regular payments, while borrowing the equipment for a set term. When the term is up, you have the option to return the equipment, or purchase it at its fair market value.

$1 Buyout Leases

This is a type of capital lease. You pay off the cost of the equipment, plus interest, over the course of the lease. In the end, you owe exactly $1.

Once you pay the $1 residual.  which is essentially a formality, you fully own the equipment. This type of lease is very similar to a loan in terms of structure and cost.

10% Option Leases

This lease is the same as a $1 lease. But at the end of the term, you have the option to buy the equipment for 10% of its costs. These tend to have lower monthly payments than a $1 buyout lease.

Demolish your funding problems with 27 killer ways to get cash for your business.

How Much Can a Lease Cost?

Here is an example. Let us say you are leasing a $25,000 piece of equipment. Call it a 10% option, and a 36 month term.

The value of the Equipment is$25,000. The interest Rate is 15%. The term Length is 36 months. The monthly Payment is $780. The total Cost of Leasing equals $28,079. And the cost to Purchase is $2,500. Hence the total Cost of Equipment is $30,579. See merchantmaverick.com/equipment-financing.

With the example, you would be paying an extra $5,579 over the course of the lease. That is over 1/5 more added, to your total cost for the equipment.

If you bought the equipment from the start, you would pay $25,000. So you would be in $25,000 in the hole from the beginning. But with leasing, you have not spent the total $25,000 until over 2 ½ years have gone by. In the meantime, you can invest that money or earn interest on it.

Demolish your funding problems with 27 killer ways to get cash for your business.

Did You Know Credit Suite Offers Equipment Financing and Leasing?

We offer equipment financing and leasing programs. Companies must have at least one year in business. You can get approval even with challenged credit. You will not need financials to secure equipment financing. Approvals take as little as 24 hours.

Check out the easy qualification process. You can get approval with as low as a 640 personal credit score. For approval, lenders will request details on the equipment you are getting. After a quick credit review, you can get approval for as much as $10,000,000 in equipment financing.

Equipment leasing is powerful! We help business owners get financing to lease equipment. With equipment leasing you receive even more favorable terms than typical business financing programs, with even more benefits. Whether you are a startup business or a well-established business, we have hundreds of equipment lenders who would like to help.

Equipment Leasing Rates and Payments

You can qualify with only two monthly payments as a down payment. And you can get approval with a credit score as low as 640. Rates are affordable and 100% of your interest is tax deductible. Plus, you can get financing up to $10,000,000.

Benefits

You can enjoy 24-hour pre-approval. And you pay no application fees. Interest is tax deductible. Go all the way from application to funding in 2 weeks or less. Purchase, lease, or borrow against existing equipment.

Heavy equipment financing is available. We have loans for up to $10,000,000. And you can get approval with average credit. The equipment serves as collateral. Note: financials are necessary.

Equipment Financing and Leasing: Takeaways

Businesses often have fluctuating revenue. But they still have to have equipment. And for new businesses, they have to have equipment to get going, but they can never seem to be able to afford it.

This type of funding can be the ideal solution. There are advantages and disadvantages to leasing equipment, just like any other form of lease versus purchase. Credit Suite offers equipment financing and leasing. We help you navigate multiple dissimilar offers and make sense of it all. Let’s take the next step together.

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