Should You Get a Personal Loan? Here’s What You Need To Know

Did you recently have an unexpected expense pop up? Are you unsure about how you’re going to pay for it? No matter how well we plan our lives out, sometimes we find ourselves in financial pickles that leave us strapped for cash. Don’t sweat it too much, though. You definitely have a few options available…

The post Should You Get a Personal Loan? Here’s What You Need To Know appeared first on MoneyTips.

The post Should You Get a Personal Loan? Here’s What You Need To Know appeared first on Buy It At A Bargain – Deals And Reviews.

How To Get an Auto Loan With Bad Credit

Buying a car can be an exhilarating experience, especially if it’s your first car, first new car or the first car you’re buying without help from your family.  Unless you can buy your car with cash, you’ll probably need an auto loan. Before any auto lender decides to give you a car loan, they’re going…

The post How To Get an Auto Loan With Bad Credit appeared first on MoneyTips.

The post How To Get an Auto Loan With Bad Credit appeared first on Buy It At A Bargain – Deals And Reviews.

Top 5 Tips for How to Get a Startup Business Loan

Are you trying to start a business and wondering how to get a startup business loan? Maybe you think you don’t qualify. Maybe you have been trying but keep getting denied. These tips, including one that almost no one knows about, will help you obtain the funds you need to get your business off the ground. 

How to Qualify for a Startup Business Loan No Matter What

Usually, to get a traditional business loan you need good credit, strong cash flow, and collateral. If you are a startup, you may not have cash flow yet.  You may have good personal credit, which can help, but it’s unlikely that you have established business credit.  Honestly, you may have collateral, or you may not. 

However, there are some loan options you can qualify for with just one of these three things. 

5.What Are Your Options for a Startup Business Loan? 

Tip number one for how to get a startup business loan is to know your options. This is the hardest part. It can be easy to get overwhelmed when you start looking at loan requirements. Most traditional loan options require collateral, cash, and good credit even if you are a startup. 

Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.

The first step in knowing how to get a startup business loan is understanding what your options are based on your specific qualifications. Here are a few ideas to get you started. 

Options for Small Business Startup Loans if You Have Collateral

If you are looking for a straight business startup loan, collateral-based loans are going to be the easiest to get. You use your assets as security.  As a result, rates are lower, and your personal credit doesn’t have as much of an impact. Of course, collateral can be anything.  Still, here are some outside-of-the-box ideas you may not have considered. 

Securities-Based Financing

For example, you can use stocks as security to get business financing. In fact, you can borrow as much as 90% of their value. Furthermore, you continue to earn interest on the stocks even as they are pledged as collateral. 

401(k) Financing

Your existing 401(k) or IRA can help fund your business as well. This is a unique funding tool known by the IRS as a Rollover for Business Startups, or ROBS. There are no tax penalties, and you still earn interest on your 401(k).

Equipment Financing

Equipment financing is a great way for a startup to get financing to buy or lease new equipment. Use your first and last month’s payments to get approved. However, rates vary widely based on risk factors.  The lender will undervalue equipment by perhaps up to 50%. Also, this only works for major equipment. Lenders won’t combine a lot of small equipment.

SBA Loans for Startups

There are a few different SBA programs that can work for startups that have collateral.

7(a) Loans 

The Small Business Administration’s 7(a) loan program offers federally funded term loans up to $5 million. Generally, these loans can be used for expansion, purchasing equipment, working capital and more. Banks, credit unions, and other specialized institutions process these loans and disburse the funds. 

504 Loans 

In addition, 504 loans are available up to $5 million.  These funds can buy machinery, facilities, or land. Typically, they are used for expansion, and they work especially well for commercial real estate purchases. 

Microloans 

In contrast, microloan amounts are smaller, only going up to $50,000. Use them to start a business, purchase equipment, buy inventory, or for working capital. Community based non-profits administer microloan programs as intermediaries, with financing coming directly from the Small Business Administration. Banks do not handle these loans. As a result, many entrepreneurs do not even know they exist. 

How to Get a Startup Business Loan Without Collateral? 

What if you do not have collateral. In the absence of cash flow or good credit, how can you get  the funds you need? 

Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.

You may have to use a guarantor.  Simply put, a guarantor is someone who signs the loan with you and agrees to repay the debt if you do not. While traditional guarantor loans are fine, there is an even better option. In fact, with this little known-option for business funding, you can get funds up to $150,000 with 0% interest for up to 18-months!

The best part is, you either need good personal credit (above 680) or a guarantor, not both!

Credit Line Hybrid

The Credit Line Hybrid allows you to fund your business with no collateral and typically very low interest rates.  No financials are required.  You can usually get a loan of 5x the amount of your highest revolving credit limit account, up to $150,000. You do not have to use a guarantor, but you do need a 680+ credit score to qualify without one.

4. Learn How to Set Your Business Up the Right Way 

Have you ever heard the term “fundability?” Fundability refers to a business’s current ability to get financing. For a business to be fundable, it has to have a fundable foundation. This means the way you set up your business is a big piece of how to get a startup business loan. 

A fundable foundation includes: 

  • Separate business contact information 
  • EIN
  • Incorporating
  • A D-U-N-S Number
  • Dedicated business bank account
  • A professional business website with an email address that shares the URL

Infographic

The foundation includes only a fraction of the over 100 factors that affect the fundability of a business. However, none of it matters without the foundation. 

3. Do Not Underestimate Business Plan Importance

You need a strong business plan that will grab the attention of the lender. They need to see what you plan to do with the money. They need to know you have a strategy, that you’ve done your market research, and that you have some skin in the game. 

Many business loan applications are denied because the business plan is poorly put together or non-existent. 

2. Don’t Ignore Your Business Credit Score

Many business owners either do not know that there is such a thing as a separate business credit score, or they grossly misunderstand it. Your business credit score reflects the creditworthiness of your business separate from you as the owner. Unlike personal credit, it does not build passively. You have to be intentional about building business credit. 

The first step is building the fundable foundation. That will establish your business credit profile. Then, you have to get accounts reporting your payments to that profile before you will start to build a business credit score. 

That is easier said than done, because unlike consumer credit where pretty much all accounts report your payment history, only about 7% of accounts that use business credit to make approval decisions will report payment history to your business credit profile. 

There are a few ways to get accounts reporting. One of them is the Credit Line Hybrid

Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.

1. Secret Expert Tip

This tip for how to get a startup business loan is one that very few people know about and even fewer talk about. The best way to get a startup business loan, or any business loan for that matter, is to work with a business credit expert.  

How can a business credit expert help?  First, they can help you find the funding you need right now. But more than that, they can analyze the current fundability of your business and your business credit profile, and walk you through the steps necessary to establish or improve. Since there are over 100 factors that can impact fundability, this is a huge timesaver.  Not only that, but it is helpful to ensure you don’t miss anything. They know what they are doing. 

Now that You Know How to Get a Startup Business Loan, Here’s What to Do Next

Why not start at the top and get things off to the best start possible? A free consultation with a business credit expert can point you in the right direction. With an expert guiding you the entire way, you’ll save both time and money, and you will know without a doubt that you are on the right track. 

The post Top 5 Tips for How to Get a Startup Business Loan appeared first on Credit Suite.

Looking for an Online Business Loan? Read this Become.co Review Before You Do Anything Else

Become.co, once known as Lending Express, claims to help businesses get funding even when they have gotten denials elsewhere. But can they do what they say?

An All In Become.co Review

First as Lending Express, and now as Become, this is a company that claims to be able to help businesses get funding when they have not otherwise been able to do so.  What is their secret, and does it really work? We dug deep in order to find out.

Become.co Review: What is Become?

First things first. This is not a lender. Rather, they are more of a lender and borrower dating service.  They collect information from potential borrowers and send it to partner lenders. The lenders then decide whether or not they want to make a financing offer to the would-be borrower. The company spins it as lenders competing for the opportunity to fund the borrower’s business.  In some cases, this may well be how it turns out.

Find out why so many companies use our proven methods to get business loans.

Become.co Review: Types of Business Loans

The lenders that work with Become offer a broad range of lending products.  They include:

  • Startup business loans
  • Commercial vehicle loans
  • Asset based loans
  • SBA loans
  • Merchant cash advances
  • Lines of credit
  • Invoice financing
  • And unsecured business loans

Become.co Review: How Does it Work?

First, you fill out an application with Become.  Then, the company technology analyzes the application and matches you with the best lenders for your business from among their partners.

Application Process

  1. Select how much you need under “loan amount” and then “Get Loan Offer”’
  2. Fill out the information asked for, which includes time in business, industry, revenue etc.
  3. Select up to 3 different lenders.
  4. Then, you will have to connect your business’s checking account to be analyzed.
  5. After that, you wait for the offers to roll in.
  6. After reviewing offers, select the lender you wish to go with.
  7. Funds will be deposited into your business checking account.

The process takes about 15 minutes and involves a soft pull on your credit report.  It will not affect your credit.

Rates and Terms

Typically, the minimum amount available from partner lenders is $5,000.  The  maximum is up to $500,000.  Flexible repayment is available based on monthly turnover. Loan terms are from 3 to 36 months.

Also, repayments do not use “interest rates.”  Rather, you are given a payback amount, which is agreed on upfront. It is based on your business type and your loan term.

They claim this  structure is beneficial for your business cash flow, because you will know your total costs upfront.  While not untrue, it would be wise to calculate an effective interest rate for comparison purposes.  For example, if your loan amount is $5,000 and your repayment amount is $5,500, your effective interest rate is 10% over the life of the loan.

This is important information to know, so that you can make sure you are getting the best deal possible for your business.

Qualifying

Any business owner can apply.  If you do not qualify, you will still be assigned a dashboard explaining the reason why, along with tips to help you improve your chances. At a minimum, you should have an average revenue of $5,000 per month, ideally.  You also need to have been in business for at least 3 months if you are a U.S. business and at least 6 months if you are in Australia.

As for credit score, while it is important, some of their partners do not deny based on a low credit score.  Instead, their decision is based on the overall health of your business as determined by a number of factors. These may include revenue, time in businesses, average balance in business bank accounts, and more.

Clearly, the more of these factors you have in your favor, the better your chances are going to be for getting funding from Become.

Required Documents

You must have a business checking account.  Become will analyze the statements for the past 3 to 6 months. Other document requirements will be up to the lender you end up applying to.  Some examples of documents they may require include merchant statements, tax returns, and financing projections. It will never hurt to have a business plan.

Find out why so many companies use our proven methods to get business loans.

Become.co Review: How Are They Different?

Become uses technology and advanced algorithms to help match business borrowers to alternative lenders. The process is free, and unlike others, they do more than just match borrowers to lenders. They also function as a credit profiler.

Their proprietary technology renders a unique LendingScore™ for each business.  This is a financing profile that is intended to help the company improve funding possibilities, access new opportunities, and find the best funding solutions.

Find out why so many companies use our proven methods to get business loans.

Become.co Review: Reputation

They do not seem to have a  Better Business Bureau profile, at least not under the name Become. There is a company with the same name that uses the URL “Become.com.” Become.com appears to be an online shopping portal, wholly unrelated to Become. Co. Since both companies are in the state of California, this could be quite confusing.

They do, though, have a very good rating on Trustpilot. The rating is 4.8 stars.  There are over 500 reviews, and over 90% of them are excellent.

Become.co Review: Are They All That They Claim to Be?

It seems that they do a great job.  They have a lot of happy customers, and Trustpilot is a trusted review source. That said, it’s unfortunate that they chose a name that requires a .co URL.  This may make them hard for many to find when looking for small business loans.  Alos, the name “Become” doesn’t exactly reflect who they are or what they do, further complicating the ability of business owners to find them. It is a very generic word which most people would not relate to business funding.

Another potential area of concern is the fact that they want access to your business bank account. It sounds as if they want to access it electronically. Still, online lenders are doing this more and more these days.  Given the number of great reviews, it may not be an issue.  That is a decision you will have to make for yourself.

Is Become the End of the Road if You Do Not Qualify?

If you fill out an application with Become and you do not qualify for funding with any of their lenders, your dashboard will contain the reasons why and ideas to help you qualify in the future. This can be helpful in the long term. But, what if you need funding right now?

A business credit expert can help walk you through the process of building a business credit profile.  This is separate from your personal credit profile, and will open up new funding opportunities.  They can also analyze the current fundability of your business, and help you find ways to improve it.

In addition, they can help you find the funding you need right now with products like 401K financing and the Credit Line Hybrid.  Get a free consultation today.

The post Looking for an Online Business Loan? Read this Become.co Review Before You Do Anything Else appeared first on Credit Suite.

How to Use Public Stocks as Business Loan Collateral – and Why You Want to

What You Need To Know About Bank Loans

Seeking the best sources of funding for your business can feel complex and overwhelming. Most young entrepreneurs today feel like bootstrapping their business feels safer and perfect for their needs. 

Unfortunately, most start-up businesses cannot thrive without adequate funding. Since few businesses start with a generous budget, you must seek alternative sources. Loans, sponsorships, partnerships, angel funding, co-investors, and grants are some of the options known to many.

Most of these options require collateral of some sort. Collateral is an asset that you can use to secure a personal or a business loan. In layman’s speak, it’s a promise that you can still cover your loan when you cannot make the payments. 

Collaterals can be seized and resold to cover the remainder of the loan. For business loans, assets like business equipment, vehicles, buildings, and inventory can be used as business loan collateral. You can even use accounts receivables to pay off the loan if necessary. 

Like any other lenders, banks put a lien on the asset pledged as collateral for the loan. If the borrower falls on hard times and cannot keep up with the payments, the lender has the right to seize the collateral. It is a guarantee that the lender still gets paid no matter what. By pledging collateral, a business owner shows that they are not a high-risk borrower. It leads to reduced interest rates and a more reasonably affordable loan plan.

Alternatives

Today, most business loans and credit lines do not come from conventional banks. There are alternative lenders and investors like Credit Suite who can help you with the steps needed to secure a business loan

We have a wide array of legitimate funding solutions, each with its own different and unique terms that can match your credit profile. Credit Suite’s business loan programs manage the rates and requirements to help increase your chance of getting approved.

High-value collateral often gets matched with a higher loan value which can be beneficial for the lender. It is logical for business owners to choose a loan option that reflects their capacity to pay. However, not many are aware that they can use less popular options as business loan collateral instead of their properties.

The good news? If you own a public stock, you may use that as collateral to secure a business loan. This article explores how public stocks can be your collateral and what makes them such a good option.

Why Use Public Stocks As Business Loan Collateral?

Public stocks are liquid assets which makes them an acceptable form of collateral. Everyone in the industry knows that these stocks have passed compliance standards. Hence they guarantee against the unlikely event of a default. It is natural for any individual to feel a degree of protectionism on what they hold dear. It includes real estate, properties they own like vehicles or artwork, and it extends to stocks. However, in the unfortunate event of a seizure, public stocks affect you differently. 

You can still operate your business, protect your image, and operate as usual. Treat your public stocks as one of the assets that can help your business continuity process. It is a lifeline that can save you when you cannot make payments without sacrificing the assets that help your business move (i.e., laptop, vehicles, house, etc.). 

Overall, what matters is that you are protected from your liability against future payments—the benefit trumps, especially when the need for funding is huge. Most people are unaware that you can use public stocks as such and so the next section will guide you on how to use them so that you can feel more confident in deciding that this is the best option for you to take. 

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

5 Tips In Using Public Stocks As Collateral To Secure Business Loans

  • Track your assets’ worth.

Lenders will assess your company’s history, business credit, balance sheet, and equity contributions. When you pass the audit, that’s the time when you submit your collateral for review. 

Defaulting on a loan has dire consequences for your business and personal life. It would help if you took a realistic stance when you track your assets. Specifically, your public stocks require an exhaustive review. Consider asking for professional help to help you see how your stocks fare.

Feel more confident in your investment decisions by staying up to date on research-based information, current trends, and market analysis. When it comes to your business and money, a serious reputation is important. You can rely on professional advice from experts like Charlie Shrem, Matt McCall, David Stein, and Josh Bannerman to navigate key investing issues.

  • Negotiate if you can.

A good credit rating increases your loan approval. Using public stocks as collateral, how your stocks perform, your investment history, and your level of stock ownership can all influence your loan-to-value ratio. Look for wiggle rooms in terms of restructuring, repayment, frequency, and scheduling. These are basic areas you can cover in negotiating.

  • Ask for lower interest rates.

Public stocks can help you get lower interest rates because the collateral is being held. It is because of the reduced risk associated with public stocks. This reduction makes lenders more comfortable because there is little chance of default. Depending on your stock’s value and performance, lower interest rates may be warranted. It does not hurt to ask for an interest reconsideration. 

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

  • Ask for greater repayment flexibility.

This country is built on its fair and reasonable business practices. It extends to flexible loan repayment options. Additionally, it is beneficial to both parties as this essentially guarantees loan payment and profit based on interest. 

There are common repayment flexibility schemes in the market to minimize the chances of default. These are accelerated repayment which leads to loan recalculation, step-up loans where the value matches a borrower’s growth potential, and balloon repayment scheme where the loan amount is paid in the last installment.

High-performing stocks can be your leverage for greater repayment flexibility. In the event of trouble making payments, you may adjust the rates or payments depending on your lender’s programs and assistance.

  • Consider alternative lenders.

Sometimes, conventional banks are not the right fit for your business. Other start-ups claim that alternative lenders can offer funding that aligns with their goals, structure, and profitability. At Credit Suite, our contemporarily diverse strategies can help your business secure the funding you need. Our client’s testimonials prove how effective we are in our role.

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

Understanding The Risks 

There are no personal guarantees when you use public stocks as collateral. How your public stocks perform on the market will vary for sure. If the borrower defaults, the lender can seize and sell the business loan collateral. However, if the collateral sells for less than the debt value, the lender cannot seek that deficiency balance from the borrower. 

Therefore, public stock collateral is considered as nonrecourse debt. Due to the risks, lenders generally allow only 50% to 60% loan-to-value ratios. Typically, lenders underwrite these collaterals with more care compared to full recourse loans.

Depending on the kind of loan and the value you are applying for, public stocks as collateral are primarily attractive only when you own significant ownership in the company’s stock. Owning penny stocks or junk bonds will only matter if the value is high, but until it does, you have a better chance of securing your business loans with stocks that have high market value.

When we talk of public stocks, the image and quality of the company also matter. It communicates stability which helps secure the loan. The lender communicates with a broker who tracks the daily value of the stocks.

What if the Value of the Stock Decreases?

Should the value decrease, the lender may require more money (or additional collateral). Before you decide to submit your stock portfolio as business loan collateral, ask yourself whether this is a risk you are willing to take.

Remember when Apple stocks went down? Everybody seems to know when this happened, and for good reasons. All eyes watch when the big players lose. When we talk about stocks used as collateral, only significant stocks are considered. At the most basic, this can mean market value, the number of stocks, and degree of ownership.

When your stock’s market value drops, your collateral’s value might go down as well. Though this does not immediately mean that you need to submit more collateral, there’s a line drawn to secure your lender’s threshold. If the market drops far enough, there is a risk that you may owe more than the original amount.

Some Friendly Reminders

Most business owners who want to push forward understand these risks. Your chances of completing loan payments are significantly increased when coupled with confidence in their product or service, along with sensible market research.

Out-of-the-box thinking pays off in business. Look for additional income streams that you can integrate into your business. At Credit Suite, our Partner Program offers you a unique way to boost your sales and exceed your targets. 

… And

Whatever kind of service or product you sell, you can point your customers to our program to complete the sale. We also provide you with all the training and information you need when you become our partner. It’s a win-win situation for the both of us.

Business Loan Collateral Credit Suite

 

Janine Ikan is a teacher, mental health advocate, and freelance writer for The Stock Dork. She has written on psychology, digital marketing, sustainability, and new age spirituality. Her passions include arts, culture, travel, food, social sciences, and community development. She lives in the Philippines with her husband, their energetic toddler, and six cats.

The post How to Use Public Stocks as Business Loan Collateral – and Why You Want to appeared first on Credit Suite.

6 Ways to Fund Your Startup When You Can’t Get a Government Business Loan

Those who died in military service did so for our freedom. Part of that freedom is the ability to open a business. In fact, you can even get a government business loan to do so. However, that option will not work for everyone. How can you fund a startup when you can’t get a government business loan?

Discover Other Ways to Fund a Business When a Government Business Loan Isn’t An Option

First, you may not qualify. They typically require good credit and some sort of collateral. Likewise, even if you do qualify, a government business loan may not be enough.  What are the other options?

1.The Credit Line Hybrid

The Credit Line Hybrid is a funding option that may offer an even better interest rate than a government business loan.  Yet, you get the money faster and easier also.  Furthermore, you don’t have to supply any bank statements or check stubs.  You can get funding in a few days rather than weeks, without supplying any collateral or documents.

It is revolving, unsecured financing that allows you to fund your business without putting up collateral, and you only pay back what you use.

How to Qualify for the Credit Line Hybrid

Your personal credit score should be at least 680.  In addition, you can’t have any liens, judgments, bankruptcies or late payments.  Furthermore, in the past 6 months, you should have less than 6 credit inquiries.  Also, you should have less than a 45% balance on all business and personal credit cards. You need to have at least two credit cards with limits of $2,000 or more and at least a year and a half of good payment history as well.

Yet, if you do not meet all of the requirements, you can still get this funding. You can take on a credit partner that meets each of these requirements.  Many business owners work with a friend or relative to fund their business.  If a relative or a friend meets all of these requirements, they can pair with you to allow you to tap into their credit to access funding.

Learn business loan secrets and get money for your business.

How Much Funding Can You Get?

Generally, approval is up to 5x that of the highest credit limit on your personal credit report. Sometimes, you can get interest rates as low as 0% for the first few months, allowing you to put that savings back into your business.

The process is pretty fast, especially with a qualified expert to walk you through it.  Another benefit is, with the approval for multiple credit cards, there is competition.  This makes it easier, and even likely if you handle the credit responsibly, that you can get interest rates lowered and limits raised every few months.

2. Retirement Account Financing

This Credit Suite program offers a flexible and powerful way for a startup to leverage assets that are in a 401(k) plan or IRA. It even has the blessing of the IRS. In fact, they  have their own name for it. It’s called a Rollover for Business Startups (ROBS).

How to Qualify for Retirement Account Financing?

No financials have to be submitted, and you do not need good credit. In fact, all the lender will ask for is a copy of your two most recent 401(k) statements.

If the plan has a value of more than $35,000,  you can get approval. This is true even if you have really bad personal credit. You can get however much of your 401(k) is “rollable.” Sometimes, you can secure a low-interest credit line or loan for 100% of your current 401(k) value.

The plan you use cannot be from a business where you currently work. It will have to be from previous employment. Also, you can’t still be contributing to it.

The cost is 5.25% (prime +2) and the term is 5 years. There is a $1,995 lender fee rolled in as well, which  includes 5 years of management and consulting.

3. Line of Credit

The difference between a traditional loan and a traditional business line of credit is that the line of credit is revolving credit rather than a term loan. Like a credit card, you only pay back what you use. Also, lines of credit typically have lower interest rates than business credit cards. The trade off is, there are no rewards like cash back or air miles.

Learn business loan secrets and get money for your business.

At Credit Suite, our funding partners offer an unsecured line of credit that has a minimum FICO score requirement  of 600.  You also must show business tax returns with net profits over $20,000 if you have been in business between 6 months and a year.  If you have been in business for over a year, you need to show $10,000 in monthly revenue. These requirements are much easier to meet than those typically set forth by lenders.

Terms are 6 to 18 months and interest rates range from 12% to 25%.  You can get up to $250,000.

4. Alternative Lenders

There are a number of non-bank lenders that will lend to startups. You do have to be careful, as there are a lot of predatory lenders out there. They also tend to have higher interest rates.  However, they aren’t all bad. Here are a few decent options for startup loans if a government business loan isn’t available.

BlueVine

BlueVine requires that you be in business for at least 6 months.  If you have at least $120,000 in annual revenue, you may qualify for a loan from them.  The minimum credit score for a line of credit from  BlueVine is 600. Furthermore, if you want invoice factoring, you can get approval with a score as low as 530, 3 months in business, and $10,000 in monthly revenue.

Kiva

Kiva is different. First, the interest rate is 0%.  As a result, even though you have to pay it back, a loan from them is free money. There is no credit check at all. However, you have to get at least 5 family members or friends to donate to help fund your business as well. In addition, you have to pitch in a $25 loan to another business on the platform yourself.

Accion

Accion also may also be a good fit if a government business loan isn’t happening.  It’s a nonprofit that offers microloans. The minimum credit score is 575. You don’t have to already be in business, but if you are not, you must have less than $500 in past due debt. In addition, your business needs to be home or incubator based.

Remember, details such as interest rates and loan requirements can change, so be sure to check lenders directly for the most up to date information.

5.Crowdfunding

This option for startup funding is growing in popularity. With crowdfunding, you get a lot of smaller investments from a lot of people, or a crowd if you will. It is different from getting the bulk of your small business funding from one or two larger investors.

First, you have to figure out which crowdfunding platform is best for your situation. Kickstarter and Indiegogo are two of the most popular. Be sure to take note of the rules each platform has for when you gain access to funds.  They can vary greatly.

Learn business loan secrets and get money for your business.

6.Angel Investors

These are investors that are typically less formal than regular investors. An angel investor can be anyone. For example, it could be a family member or someone you met through networking.

The best way to find an angel investor is to ask people you know. Another option is an angel investors website or network. For example, Gust keeps a database of investors, companies, and programs.

Wait! Don’t Apply for Any Funding Before Your Read This

As you work on starting your business, you need to think about building business credit so that you can get the funding you need as your business grows. Unlike your personal credit score, you have to initially work to establish your business credit score.  The best way to do this is to work with a business credit expert from the beginning. The process is not hard, but if you don’t know what you are doing, it can be difficult to navigate. A business credit expert can help you start off on the right food, and guide you through the process in the right order.  This will save time and money, ensuring you build a strong business credit profile from the start. See for yourself with a free consultation.

The post 6 Ways to Fund Your Startup When You Can’t Get a Government Business Loan appeared first on Credit Suite.

Improve Your Chances of Getting a Loan with Small Business Lenders

Small Business Lenders Have the Money You Want

Can you improve your chances of getting a loan from small business lenders?

Small Business Lenders, Business Loans, and Funding

Of course you know your business needs money. But business lending doesn’t just come from banks. Still, working to make your business more attractive to lending institutions isn’t just an end unto itself. It will also help your company also become more attractive to nontraditional lenders. It may even help make your business more attractive to prospects. There are factors which are within your control and you can help your business right now.

Start Making it Easier to Get Money from Small Business Lenders

Once you understand what banks and lenders are looking for, you can address their concerns directly. Many of these are actions you only need to take one time, and many of them will also help you to convince prospects to buy from you, thereby helping you recoup any incurred costs.

Working to More Easily Get Money from Small Business Lenders: It All Starts with Fundability

Fundability is the ability of your business to get funding. When lenders consider funding your business, does it appear to them to be a good idea to make the loan? What do they look at to make that determination? Fundability means recognizing what’s important to lenders, and then giving them what they want.

How Does a Business Become Fundable?

You probably already know that a great business credit score is important. But many of the aspects necessary for a strong business credit score work for fundability as well. A potential creditor or lender needs to see your business is legitimate and profitable. Many loan applications get denials due to fraud concerns. Others, simply because something didn’t match up and threw up a red flag.

Your Business Setup

A business must be set up to appear to be a fundable entity separate from you, the owner. The first step is to ensure your business has its own phone number and address. That doesn’t mean you must get a separate phone line, or even a separate location. You can still run your business from your house or on your computer.

Business Phone Numbers

You can get a business phone number that will work over the internet instead of phone lines. This is called a VoIP (voice over internet protocol). The phone number will forward to any phone you want it too so you can use your personal cell phone or landline if you want. Whenever someone calls your business number it will ring straight to you.

Virtual Offices

Use a virtual office for a business address. A virtual office is a business that offers a physical address for a fee. They sometimes they even offer mail service and live receptionist services. There are some that offer meeting spaces for those times you may need to meet a client or customer in person.

But not every vendor will accept a virtual address.

Business Website and Email

A business website can affect your ability to get funding. But a poorly put together website that appears unprofessional will not help you with customers or potential lenders. Spend the time and money necessary to ensure your website is professionally designed and works well.

Along these same lines, your business needs a dedicated business email address. Make sure it has the same URL as your website. Don’t use a free service like Yahoo or Gmail.

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

Improve Your Chances of Getting Money from Small Business Lenders with Business Information and Consistency

All your business information should be the same everywhere you use it. But when you start changing things up like adding a business phone number and address or incorporating, you may find that some things slip through the cracks. This is a problem because many loan applications fail each year due to fraud concerns simply because things do not match up.

Consider all the places where this information could be.

Credit providers won’t stop to consider all the ways you could list your business. If you write Incorporated in one place, and Inc. in another, it can be enough to trigger a denial. Consistent and congruent information makes it fast and easy for credit providers and lenders to find your business and its payment history.

Fix Inconsistent Information by Getting Organized

Consider all the places where your business has a listing. It’s your website, credit applications, even places like Yelp and Google Reviews. Take the time to keep records of all of these places, so Google your business often. Claim your profile on review sites to better control how your business name, address, and other particulars are presented. Copy and paste your information. Don’t chance an error with typing it out. This also means updating info whenever it changes.

Get an EIN

An EIN is an identifying number for your business that works like how your SSN works for you personally. Many sole proprietorships and partnership use their SSN for their business. But it can cause your personal and business credit to get mixed up. When you are looking to increase fundability, you need to apply for and use an EIN. Get one for free from the IRS.

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

Incorporate Your Business

A lot of businesses start off as sole proprietorships. But there’s no separation between the owner and the business with this setup. Partnerships are another entity where the ownership and the business are more intimately connected. With either entity, any other efforts at separating business and personal credit could be all for naught.

Why Incorporate?

A corporate structure truly separates business and personal credit and finances. This is because a corporation is considered to be its own entity. Should you choose a C-corporation, an S-corporation, or a limited liability corporation? That’s up to you to decide. We highly recommend working with a corporate lawyer or an accountant to determine what’s best for your particular situation.

Why Should You Incorporate Quickly?

When you incorporate, you become a new entity. Hence if you haven’t incorporated ASAP, you lose the time in business that you have and must start over. You also lose any positive payment history you may have accumulated.

Hence you must incorporate as soon as possible. It’s not just necessary for fundability and for building business credit. Time in business is also vital. The longer you have been in business the more fundable you appear. That starts on the date of incorporation. This is regardless of when you actually started doing business.

Improve Your Chances of Getting Funding from Small Business Lenders with a Separate Business Bank Account

There are business owners who pay for business expenses with personal credit cards and checks. But a business’s credit file is only supposed to reflect the financial performance of the company itself. Using personal payment methods can muddy the waters. Resist the temptation to pay for any business expenses with personal credit or checks.

Separate Your Business and Personal Finances

Your business must stand or fall on its own financially. Once you get credit from starter vendors or any other business or lender, use it on your business, and stop floating what are essentially interest-free loans to your business.

Get a Merchant Account

Another way to assure your finances get and stay separate is separate bank accounts. Often, a starter vendor will want for your business to have its own bank account anyway. While you’re at it, open a merchant account so you can take credit cards from your customers. Customers will spend more if they can pay with plastic.

Improve Your Chances with Small Business Lenders and Get all Required Licenses

Fundability means being a legitimate business. For a business to be legitimate it must have all of the necessary licenses it needs to run. If it doesn’t, red flags will fly up all over the place. Do  research to ensure you have all the licenses necessary to legitimately run your business at the federal, state, and local levels. Being properly licensed can help assure skittish prospects that you and your business are legit.

Get a D-U-N-S Number

In addition to the EIN, there are identifying numbers that go along with your business credit reports. Some are assigned by the agency, like the Experian BIN. Dun & Bradstreet is the largest and most commonly used business credit reporting agency. Every credit file in their database has a D-U-N-S number. To get a D-U-N-S number, you must apply for one through the D&B website.

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

Business Credit Monitoring

The key to keeping records consistent is to monitor your reports frequently. Monitoring your credit means you know what’s going on with it. You can pounce on errors quickly. Yes, the business CRAs make them, but they are all committed to accuracy and want to correct those mistakes ASAP.

When it comes to business credit reports, you can monitor through the reporting agencies directly. But that’s expensive! Or you can save 90% and monitor through Credit Suite.

Improve Your Chances with Small Business Lenders with a Good Business Credit History

Your credit history has a lot to do with your credit score. It is a huge factor in the fundability of your business. The more accounts you have reporting on-time payments, the stronger your credit score will be.

Your credit history consists of a number of things including:

  • How many accounts are reporting payments?
  • How long have you had each account?
  • What type of accounts are they?
  • How much credit are you using on each account versus how much is available?
  • Are you making your payments on these accounts consistently on time?

Personal credit scores come from several metrics. But business credit mainly depends on one thing, how early or late you pay your credit bills. Paying late will damage your business credit scores at all three of the major CRAs.

Improving Your Business’s Payment History

Here are a few suggestions on how to improve your company’s payment history:

  • Set up reminders to pay – your phone or your business calendar are both fine
  • Set aside money for your credit bills as a part of your budget so you’re not caught short
  • Shop around for better deals and spend less if you can
  • Repurpose older equipment or the like to avoid spending in the first place

Improve Your Chances with Small Business Lenders by Building Business Credit

Business credit is credit in the name of the business, not its owner(s). It’s a measure of how well your business (not you) pays its bills. Properly created business credit separates personal and business credit completely. So if your business defaults on payments or goes bankrupt, it protects your personal assets.

Good business credit is the way to qualify for funding without good personal credit, collateral, cash, or a guarantor. Here are some tips on building business credit to improve your chances for financing from small business lenders.

Buy from Vendors and Other Credit Providers Which Report

While many vendors and credit providers don’t report all payment experiences, they have no problem reporting late and missing payments. So, seek out and mainly (if not 100%) work with vendors which report. These are called starter vendors. Their requirements change all the time. Fortunately, we know which vendors report, and we keep up with their ever-changing requirements.

Spread Out Your Credit Applications Over Time

Asking for too many lines of credit at once signals that you’re desperate and could be overextending yourself. Building a successful business takes time. In the same way, so does building a good business credit profile. As a result, spread your applications for additional lines of credit over time.

Applying for a lot of credit at once also means you’ll have a number of brand-new accounts, which will bring the average age down. Not using your credit can result in credit providers closing inactive accounts. This, too, brings the average age down.

Use Your Credit

Business credit isn’t going to be built if you get cards and then forget about them and never use them. The business credit reporting agencies are calculating your scores based on the credit you use. Using your credit, and paying on time, is positive fodder from business credit scores and reports. You can’t control the passage of time, but you can control card usage and not apply for every credit card you see all at once.

Finally, Apply for the Right Loan

Do you need a traditional loan or a line of credit? Would a working capital loan or expansion loan work best for your needs?  Choosing the right product to apply for can make all the difference. Don’t waste yours and the lender’s time by not considering the best loan product to apply for.

Improve Your Chances for Approvals from Small Business Lenders: Some Takeaways

There are steps you can take to make it more likely your business will get a loan. These steps may also help your business become more appealing to prospects. They also help with building business credit. And applying for the right loan product will also help improve your chances of getting a business loan from small business lenders.

The post Improve Your Chances of Getting a Loan with Small Business Lenders appeared first on Credit Suite.

Get Your First Time Business Loan

Can You Get a First Time Business Loan for Your Startup Business?

When it comes to a first time business loan, what are your best choices for your startup?

What are All the Different Types of Business Loans?

There are several different types of business loans out there. Startups can have more trouble getting funding. This is because you don’t have a business credit history – and you don’t have inventory or cash flow. But those aren’t the only way to get a first time business loan. Check out what else you can do.

Choosing Among the Many Different Types of Business Loans Means Knowing What’s Right for You

Knowing the different types of small business loans is only half the battle. You have to know how to figure out which one is right for you. The answer to that will vary based on a number of factors, and it may even change over the course of your business.

But the right type of loan for your business now may not be the right type for your business later. The best way to start figuring out which loan is right for your business is to figure out what’s available. Did you know that traditional bank loans are not the only option?

Types of Small Business Loans

There are many more, including:

  • Securities-Based Financing
  • 401(k) Financing
  • The Credit Line Hybrid
  • SBA Loans
  • Equipment Financing
  • Traditional Lines of Credit

Let’s dive in to each one and figure out which one is best for your business right now

Get a First Time Business Loan with 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.

And if you do not have this type of securities, you can still get great funding if a credit partner (guarantor) has them.

Get a First Time Business Loan with 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.

And, as before, if you don’t have an appropriate IRA or 401(k), you can still get this kind of funding if you’ve got a credit partner with the right stuff.

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

For an Alternative to a First Time Business Loan, get to know Our Hybrid Credit Line Program

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.

Get a First Time Business Loan Through 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.

More About Eligibility for SBA Loans

General eligibility also includes:

  • Being a for-profit business – the business must be officially registered and operating legally
  • Doing business in the US – the business must be physically located and operating in the US or its territories
  • Having vested equity – the owner must have invested their own time or money in the business
  • Exhausting other funding options – the business must not be able to get funds from any other financial lender

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. Some of the most common SBA loan programs include:

  • 7(a) loans
  • 504 loans
  • Microloans
  • Disaster loans
  • Express loans

These are just a few the of the options available. Find out more at SBA.gov.

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

Which SBA Loan is Best?

The thing about SBA loans is that they each have a specific purpose. For example, if your business has suffered due to a natural disaster, you need a disaster loan. If you need $50,000 or less, a microloan may be the best option. But the 7(a) loan program is the most versatile.

SBA 7 (a) Loan Program Details

A standard 7(a) loan can be for up to $5 million. The maximum SBA guarantee is 85% for loans up to $150,000 and 75% for loans greater than $150,000. The interest rate varies but cannot exceed the SBA maximum. The turnaround is 5 – 10 business days. These funds can be used for a number of things, and the minimum credit score is 640. But of course the higher the better.

Who Do SBA Loans Work Best For?

These loans work well for those that are not in a hurry to get funding

The approval and funding process can take a while, especially with the government red tape required for the government guarantee. If you can wait, meet all the requirements, and want a more traditional type of loan, SBA loans are an option.

Get a First Time Business Loan with Equipment Financing

Businesses looking to buy or lease equipment can use equipment financing. Rates vary widely depending on risk factors. You usually can get approval with a 650 or better credit score. This is for major equipment only, not a combination of a lot of small equipment. These loans work well for those that have good credit and just need to finance some equipment. The equipment is the collateral, so that helps out some with rates.

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

Get a First Time Business Loan with a Traditional Line of Credit

This is similar to a traditional term loan in terms of where you get it, and approval requirements. However, it is revolving financing more like a credit card. Typically have better interest rates that credit cards. They work well for those who qualify for traditional term loans but want revolving credit rather than a term loan.

Which Types of Small Business Loans are Best for Your Business?

If you know what types of business loans are available to your business, you can make a more educated decision about which types of business loans will work best for you. Knowing what’s out there is only half the battle. You also have to understand your own eligibility and funding needs.

Get a First Time Business Loan: Takeaways

All businesses need funding. Traditional term loans are not the only option. Other options exist to help you money faster. Or funding despite bad credit. And you can better rates and terms than you would get with a traditional term loan.

The post Get Your First Time Business Loan appeared first on Credit Suite.

The PPP Loan Extension Offers the Gift of Time: Use it Wisely

On March 30, 2021 President Biden extended  the PPP loan application deadline for the Paycheck Protection Program.  The extension pushes the deadline from March 31, 2021 to May 31, 2021.  It includes PPP loans for nonprofits as well. In addition to the PPP loan extension, this also allows for an extension of the SBA PPP processing time to June 30, 2021. 

This is a major win for small businesses, as the program’s PPP loan forgiveness provides businesses a way to keep going despite the ongoing economic fallout from the pandemic. 

The PPP Loan Extension is a Major Win For Small Businesses in More Ways than One

This serves two purposes. First, it allows more small businesses time to get their PPP loan application completed and turned in. At the same time, it gives the Small Business Administration more time to deal with any technical issues that may pop up with SBA PPP loans funding and processing. 

Why Is a PPP Loan Extension Needed?  

An extension is necessary to provide more support for businesses while the U.S. population is getting vaccinated for COVID-19 over the coming months.

It will give businesses more time to apply loans.  This includes both first-time loans, and even a second draw PPP loan if applicable.  The second draw is a second PPP loan available to some businesses that have already received one Paycheck Protection Program loan.  Those who have issues with the application process will also be able to spend more time working through those problems.

Other PPP Loan Changes

Other recent changes will help even more applicants.  This includes the smallest of small businesses, as well as minority-owned businesses and those located in rural communities. A two-week period in March was set aside only for businesses with fewer than 20 employees to apply.

That time is over, but still helpful is the fact that the administration is also now calculating the loan formula for sole proprietors, independent contractors and self-employed individuals differently.  Furthermore,  gone are the restrictions that prevent business owners with prior felony convictions not related to fraud, or those who have been delinquent on federal student loans, from receiving assistance. 

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

What Can You Do In the Meantime? 

There is no question that the PPP loan program is a savior for many small businesses.  Still, the money doesn’t come automatically. What if you need money right now? What if you can’t wait for the sometimes long PPP loan application process? Maybe the PPP loan won’t be enough. How can you supplement it? 

Here are some ideas to either bridge the gap or take the place of a PPP loan.  

Credit Line Hybrid

The credit line hybrid is business financing that does not require security.  It is available to pretty much anyone for any type of business expense. You can use it for real estate, equipment, working capital, and even startup expenses.  Furthermore, there is no down payment, and you do not have to provide income documentation. It is completely no-doc financing. 

You need to have personal credit of 680 or above, but keep reading if you don’t because there are still options. .  Also, there cannot be any late payments in the past 12 months, there can be no open collections or bankruptcies, and there should be less than 4 inquiries in the past 6 months on your consumer credit report.  There also have to be at least 2 open credit cards with a $2,000 limit or higher with 2 years of good payment history. 

If you do not meet these requirements, including the minimum credit score, you can take on a credit partner who does meet them. 

You can get up to $150,000, and often interest rates are as low as 0% for the first 6 to 18 months.

401(k) Financing 

The 401K financing program offered by Credit Suite is a flexible and powerful way for a new or existing business or franchise  to leverage assets that are in a 401(k) plan or IRA. These are assets which are tied up in stocks. 

It doesn’t take long either.  In as little as 3 weeks you can actually invest a portion of these funds into your own business. Then, you not only have more control over the performance of your retirement plan assets, but you also have the working capital you need.

This type of program even has the blessing of the IRS. In fact, they  have their own name for it. It’s called a Rollover for Business Startups (ROBS). 

Do You Qualify for a ROBS? 

Surprisingly, this type of financing is pretty easy to get. You do not have to submit financials or have good credit to get approval. In fact, all the lender will ask for is a copy of your two most recent 401(k) statements.

If the plan has a value of more than $35,000,  you can get approval. This is true even if you have really bad personal credit. You can get however much of your 401(k) is “rollable.” Sometimes, you can secure a low-interest credit line or loan for 100% of your current 401(k) value.

The plan you use cannot be from a business where you currently work. It will have to be from previous employment. Also, you can’t still be contributing to it. 

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Business Revenue Lending

If your business has consistent revenue of $120,000 per year or more, you may qualify for business revenue lending. Lenders verify revenue using bank statements.  There can be no recent bankruptcies, but the minimum credit score to qualify is as low as 500.  

A business must also be in operation for a year or more, and they must do more than 5 small transactions each month to get business revenue financing. 

Merchant Cash Advance

If your business accepts credit card payments and you have at least a 500 FICO, you could get up to $750,000 in a merchant cash advance. Credit rates are usually lower compared to traditional financing as well.  

There must be $100,000 or more per year in credit card sales, and typically you can get approval equal to one months credit card financing volume. 

Account Receivable Financing

Outstanding account receivables can also be a source of funding for your business. Get as much as 80% of receivables advanced in less than 24 hours. You get the rest of the accounts receivable amount once you collect full payment for the invoice. Closing takes 2 weeks or less. 

Receivables should be with the government or another business. Getting financing with receivables from individuals is not as easy. If you also have purchase orders, then you can get financing to have those filled. You won’t need to use your cash flow to do so.

Enterprise SBA Loans

For these loans you have to have collateral worth up to at least 50% of the loan amount, but you only need a FICO of 620.  There also can be no bankruptcies in the past 4 years.  Only for profit companies qualify, and they must have positive trends in sales growth. Generally amounts are available of up to $12 million with terms up to 25-years. 

Credit Suite can help you get funding with these options and show some other possibilities.

Use the Time Allowed By the PPP Loan Extension Wisely

Getting funding for your business is not always easy.  There is more to it than just applying for a loan. Business credit can get sticky.  Having expert help can save you a lot of time and money.  While you are waiting for your Paycheck Protection Program loan, consider working with a business credit expert to help you better position your business to access the funding it needs quicker and easier in the future.  

A business credit expert can help make the most of the PPP loan extension time.  They can work with you to evaluate the fundability of your business. The stronger your fundability, the more likely you are to get funding with the best rates and terms available. You can get a free consultation to help ensure your business is set up properly to build fundability

An expert can help you evaluate the many factors that affect fundability.  There are over 100.  With so many factors, it can be hard to figure out where you stand without an expert. They can work with you to figure out where your business falls short and help you improve.  Fundability is a tangled web affected by many things, and the time and money saved having an expert walk you through it is extremely valuable. 

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

What Else Can a Business Credit Expert Help With?

They can also walk you through the steps to establishing a business credit profile separate from your personal credit profile. Once that is done, they can help you find accounts that will report to that business credit profile.  

This is key, because many vendors do not report.  Those that do report, do not make it easy to find out that they do.  A business credit expert has relationships with a number of vendors.  They can help you find the ones that will successfully help you build your business credit score. 

PPP Loan Extension: You Still Have Time

Thanks to the PPP Loan extension that President Biden signed, you still have time to get your PPP loan application in.  No matter how fast you act however, some things never change. Especially with the PPP extension on the SBA side, you will likely be waiting a bit for your approval and to actually receive PPP funds.  

If you need money right now, try one of these funding options.  Then, put to good use the time the Paycheck Protection Program extension allows you.  Use it to get in touch with a business credit expert.  It’s a great time to start the process of building strong business fundability. The stronger your fundability, the easier it is to fund your business whatever the world throws your way, even a global pandemic. 

The post The PPP Loan Extension Offers the Gift of Time: Use it Wisely appeared first on Credit Suite.

Commercial Loan for Real Estate Financing

What is a Commercial Loan for Real Estate Financing? 

Commercial real estate (CRE) is income-producing property with just business (rather than residential) purposes. Examples include retail malls, professional offices such as for dentists, office buildings and complexes, and auto dealerships. Financing, including the acquisition, development, and construction of these properties, often comes from commercial real estate loans. These are mortgages secured by liens on the commercial property. So this is a commercial loan for real estate financing.

What is a Commercial Loan for Real Estate All About? 

Commercial real estate loans are often made to business entities. 

These include developers, corporations, limited partnerships, and funds and trusts. These entities are often formed for the specific purpose of owning commercial real estate.

But such a business entity may not have a financial track record or any credit rating. In that case the lender may require the principals or owners of the entity to guarantee the loan. 

Hence a person (or group of people) puts their property on the line. In case of loan default, the lender can recover from them.

If the lender does not require this type of guarantee, and the property is the only means of recovery in the event of loan default, this debt is a non-recourse loan. It means the lender has no recourse against anyone or anything other than the property.

What are Typical Commercial Loan Terms for Real Estate?

Unlike residential loans, terms for commercial lending typically range from 5 years (or less) to 20 years. The amortization period is often longer than the term of the loan. 

Amortization is an accounting technique. Its use is to periodically lower the book value of a loan or intangible asset over a set period of time.

A lender, for example, might make a commercial loan for a term of eight years, with an amortization period of 30 years. Here, the investor would make payments for eight years, of an amount based on the loan being paid off over 30 years. 

Then one final balloon payment of the entire remaining balance on the loan follows.

The length of the loan term and the amortization period affect the rate the lender charges. Depending on the investor’s credit strength, these terms may be negotiable. 

But in general, the longer the loan repayment schedule, the higher the interest rate.

Learn business loan secrets and get money for your business.

What are Loan-to-Value Ratios in a Commercial Loan for Real Estate? 

LTV is a calculation measuring the value of a loan against the value of the property. A lender calculates LTV by dividing the amount of the loan by the lesser of the property’s appraised value, or its purchase price. For example, the LTV for a $80,000 loan on a $100,000 property would be 80% ($80,000 ÷ $100,000 = 0.8, or 80%).

Borrowers with lower LTVs will qualify for more favorable financing rates than those with higher LTVs. This because they have more equity (i.e., a stake) in the property. It works out to be less risk from the lender’s perspective.

Commercial loan LTVs tend to fall into the 65% to 80% range. While some loans may be made at higher LTVs, they are less common. The specific LTV will often depend upon the loan category

What is Debt-Service Coverage Ratio? 

DSCR compares a property’s annual net operating income (NOI), to its annual mortgage debt service. This includes principal and interest. It measures the property’s ability to service its debt. You calculate it by dividing the NOI by the annual debt service.

For example, a property with $150,000 in NOI and $100,000 in annual mortgage debt service, would have a DSCR of 1.5 ($150,000 ÷ $100,000 = 1.5). The ratio helps lenders determine maximum loan size. That has a basis in the cash flow generated by the property.

What Does it Mean to Have a DSCR of Less than One?

A DSCR of less than 1 means a negative cash flow. For example, a DSCR of .93, means there is only enough NOI to cover 93% of annual debt service. In general, commercial lenders look for DSCRs of at least 1.25. This is to ensure adequate cash flow.

A lower DSCR may be okay for loans with shorter amortization periods, and/or properties with stable cash flows. Higher ratios may be required for properties with volatile cash flows. These include, for example, hotels. This is because hotels do not have long-term (i.e., more predictable) tenant leases, which other types of commercial real estate have.

What Sorts of Interest Rates and Fees Do You Typical Pay with Commercial Real Estate Financing? 

Interest rates on commercial loans tend to be higher than on residential loans. Commercial real estate loans also often involve fees adding to the overall cost of the loan. These include appraisal, legal, loan application, loan origination, and/or survey fees.

Some costs must be paid up front before loan approval or rejection. Others apply annually. A commercial real estate loan may have restrictions on prepayment. The intention is to preserve the lender’s anticipated yield on a loan. 

If investors settle the debt before the loan’s maturity date, chances are good they will have to pay prepayment penalties. See investopedia.com/articles/personal-finance/100314/commercial-real-estate-loans.asp.

Learn business loan secrets and get money for your business.

What are Some Types of Commercial Real Estate Loans? 

You can invest in real estate with an SBA 7(a) loan, or an SBA 504 loan. Conventional bank loans are another option, as are hard money loans. Joint venture loans allow parties to share the risk and returns from commercial property investment, without having to formally enter into a real estate partnership.

You can get a commercial mortgage from Freddie Mac, or Fannie Mae. You can try credit unions, or even life insurance companies. Another option is HUD. See stacksource.com/commercial-mortgage-rates.

You can try an online marketplace loan, AKA a soft money loan. Here, interest rates are still higher than conventional bank loans. But they are lower than loans from hard money lenders. For the most part, online marketplaces match borrowers with shorter-term loans. These run from six months to a few years. See fortunebuilders.com/commercial-real-estate-financing-basics.

What Do Most Lenders Look for When Checking if You Qualify for Commercial Loan for Real Estate Financing? 

This depends on the lender and the type of financing. What they check can include available collateral, borrower creditworthiness, and certain financial ratios dependent on characteristics of the property. 

Borrowers may have to provide several years of financial statements and income tax returns. Lenders may also want to see financial statements indicating cash flow for the property to be financed. See reonomy.com/blog/post/commercial-real-estate-financing.

Check Out a Commercial Loan for Real Estate Financing from Credit Suite

Did you know Credit Suite offers commercial real estate financing? It ranges from $100,000 – $20,000,000. You can use this financing for refinancing a property, even if you are doing a cash-out refinance. Maximum LTV is 70%.

Loan-to-values range from 55 – 65%, depending on the purpose of the loan. Plus your clients can also get SBA loans. Renovations get loan to value of up to 60%.

Credit Suite has funding programs available including conventional property financing, money for investment properties and hard money loans, bridge loans and loans for the purchase of commercial real estate.

Get Commercial Real Estate Financing for All Types of Buildings! 

Credit Suite offers financing for many different, even unique property types. Get funding for offices, industrial offices (this includes general or medical/dental), industrial facilities, light manufacturing buildings, and self-storage facilities.

With our commercial real estate financing, you can also get funding for mixed use properties, commercial condos, auto dealerships, light auto services, and day cares.

And you can even get funding for assisted living facilities, entertainment venues, multi-family properties, retail warehouses, and more.

Learn business loan secrets and get money for your business.

Check Out Details on Credit Suite’s Commercial Loan for Real Estate Financing Program

Approval amounts go up to $20,000,000. Bad credit is okay. Use the real estate as collateral. You will need to provide bank statements. A commercial real estate loan is a big step, let’s take it together.

A Commercial Loan for Real Estate Financing: Takeaways

Commercial real estate financing is for buying properties used solely for commercial purposes. Loan terms tend to be shorter than with residential loans. Plus there are added fees such as an appraisal of the property. You can get a commercial real estate loan from the SBA, HUD, conventional lenders, etc. Credit Suite offers a commercial loan for real estate financing for up to $20,000,000. Check out our terms.

The post Commercial Loan for Real Estate Financing appeared first on Credit Suite.