Why Underwriting Loans May Be Harder to Get

Underwriting loans is the process lenders use to determine the creditworthiness of an applicant. That is, the likelihood that a potential borrower will repay. It is a thorough evaluation of an applicant’s financial information. The goal of underwriting loans is to reduce risk to lenders.

Banks are making changes to their loan underwriting process that will make getting loans harder. These changes in underwriting loans mean it is going to take more than a strong loan application and good credit report to get funding.

What is Causing the Changes in Guidelines for Underwriting Loans?

Currently, banks are tightening up on the guidelines in their loan underwriting process. They want to avoid rising risk. Why is risk rising? There’s increasing interest rates, increasing inflation, and impending recession, among other things.

All of these things can decrease the ability of borrowers to repay a loan. Inflation means cash doesn’t go as far. Recession means there may be less money in circulation.

What Kind of Changes are Coming to the Process of Underwriting Loans?

The Fed has already raised interest rates. Soon, banks may begin lowering loan amounts and increasing income requirements. Rest assured that regardless, all of them will be scrutinizing loan applications more closely. They are looking for anything that may indicate an issue.

They won’t just be looking for issues related to finance either. Their goal is to reduce the overall risk of all loans. That means almost anything is fair game if it throws up a red flag for increased risk.

5 Steps to Help Get a Favorable Underwriting Decision from a Lender

The first step toward a positive underwriting decision is to make sure you are Fundable. Fundability starts with a Fundable Foundation. All of the other steps build on that.

Step 1: Build a Fundable Foundation

The foundation is all about the set up. You want to create a separate legal entity from the owner. That includes formally incorporating, as well as having the other building blocks of a Fundable Foundation in place. Preferably, that happens before you apply for a loan. This lends credibility to the loan application. In turn, risk is decreased in the eyes of the underwriters.

What Are the Other Building Blocks of a Fundable Foundation?

Separate contact information
A toll-free phone number listed in the 411 directory is important. Furthermore, the address should be a physical address where you can receive mail. An UPS Box or P.O. Box will not work in this case. However, you might consider a virtual address.
EIN
Get this for free on the IRS website.
D-U-N-S Number
This number is free and easy to get on the D&B website.
Separate bank account
A separate, dedicated bank account is non-negotiable for many reasons. Many credit providers will not even consider approval without one. If a separate bank account is an issue due to a bad ChexSystems report, look for one you can get that will not use ChexSystems.
Professional website and email address
The website and email address should use the same URL. In addition, the URL should have the company name in it, if possible.

Step 2: Build A Strong, Separate Credit Report

Good credit history is vital to making it through the process of underwriting loans. Many owners find out too late that they have no credit separation at all. Rather, everything is tied to their consumer credit report.

When that happens, that report is all the underwriters have to look at. There is nothing to mitigate the risk related to the individual. On the other hand, if there is a separate report for the corporation, it can reduce risk in the eyes of the underwriters. That is, of course, if it is positive. So, make payments on time.

Building a Fundable Foundation, including all of the factors above, is the first step to separating company credit from personal credit.

The next step is to work with vendors that report payments to your business credit report. This will increase the number of positive payment experiences on your credit report. That is, as long as you make payments. At the same time, you can use these accounts to finance things you need to run your corporation. In turn, cash flow will be easier to manage.

Consequently, your corporate credit score will increase. But be careful. You have to find the perfect balance between enough credit for efficient cash flow management and too much debt. Credit Suite can help you both build a foundation and find vendors that report, among other things.

It is important to remember that the credit building process is a journey, not a destination. As such, don’t stop! Instead, continue growing and using your corporate credit to finance growth.

Then, you’ll increase revenue and profits. As a result, you will be more likely to meet underwriters’ income requirements.

Step 3: Respond to the Underwriter’s Inquiries As Quickly As Possible

Provide lenders what they ask for as quickly as possible. It will speed up the process. An underwriter may ask for financial records and additional documentation related to either your company or you as an individual.

What Might An Underwriter Ask to See When Underwriting Loans?

Recent bank statements
Commercial and personal tax returns
Insurance
Current credit lines
Retirement accounts
Savings accounts
Cash reserves
Other data necessary for income and asset verification

Step 4: Review and Repair Your Consumer Credit Score Because All Credit History Matters When Underwriting Loans

A traditional lender will consider consumer credit and the owner’s individual financial situation in the underwriting process. Furthermore, some CRAs use personal credit in their business credit score calculation.

They may also look at other personal financial information, including banking history. Financial faux pas such as bounced checks and overdrawn accounts will not sit well with an underwriter.

Keep in mind, they may see your personal payment history on various loan accounts, credit cards, whether personal or commercial in their effort to reduce risk.

Step 5: Get the Loan Application Right

The application is where the whole risk evaluation starts. If there is an issue with it, you may not even make it to the financial review stage.

Can an underwriter deny to approve you for a simple mistake on a loan application? Yes, they can. And they will, because they aren’t likely to take the time to consider whether it is a simple mistake or an actual issue. The fact that there is a mistake at all indicates a risk issue to them.

What Does It Take to Get the Loan Application Right?

Of course it needs to be neat and complete. If the underwriter cannot read it, or there is missing information that is not explained, it will slow things down. Not to mention, if you do not proofread your application for spelling, an underwriter may have serious questions about your ability to run a corporation.

Most potential borrowers realize these things. Yet, some factors that indicate risk and cause you to be denied a loan take many by surprise.

Consistent, Verifiable Information

Avoiding being denied is about more than financial information. Consistency is necessary. The truth is, discrepancies of any kind can cause suspicion of fraud when it comes to underwriting, whether it is financial or not. Surprisingly, even tiny oversights can cause big problems.

Application denials for inconsistent information are common due to this fact. A loan application that appears fraudulent won’t even make it past the initial review. The financial information may never even come under consideration.

Many things can cause suspicion of fraud when it comes to underwriting a loan, but there are two specific factors that tend to take even the most savvy applicant by surprise.

Name Consistency

The name of the company has to be the same everywhere. Even an ampersand in one place and the word “and” in another can cause issues with underwriting. In fact, a misplaced apostrophe or a different spelling can do the same.

Consider this example. Say that the name on the Articles of Incorporation and filed with the Secretary of State is Joe and Bob’s Stop & Shop. However, the name on the application is Jo & Bob’s Stop and Shop. This application may very likely be thrown out as soon as the discrepancy in names is noticed.

Lack of Ability to Verify Information

Don’t take for granted that your response to the lender’s requests for income and other data will be blindly accepted. How information isn verified during underwriting can vary. Still, The lender has plenty of ways to do it, and they will. Never lie about income, or anything else for that matter.

Bonus 1: Don’t Apply for New Debt When Going Through the Underwriting Process

Basically, if you take on new debt during underwriting, it could set the whole thing back. If you do get a new credit line, be sure to volunteer that information as quickly as possible.

Don’t let the underwriters find it on their own and have to ask about it. This goes for any new debt you take on after the loan goes to underwriting.

New credit cards and even vendor accounts should be avoided during the underwriting process, but if it is necessary to get one, let them know.

Bonus 2: Strong Collateral or a Personal Guarantee May Help

Obviously if you have collateral or you are open to using a personal guarantee, you may have an easier time getting through underwriting. These things can not only help you get approval, but they can also help get you more money at a lower interest rate.

But, what if you don’t have collateral or a strong personal guarantee to give? You still have options.

How Can Credit Suite Help You Get Through Underwriting and Get the Funding You Need?

Our systematic formula walks you step-by-step through building a Fundable Foundation that will help you soar through the underwriting process and closer to getting the loan you need.

Then, we guide you to the specific vendors and lenders that will work best for your needs, helping you build a strong credit report that you can use to get even more funding for growth.

Commercial Loan Underwriting May Be Changing, But You Aren’t Alone

The changing economy is leading banks to tighten up on loan underwriting guidelines. Building Fundability and separate credit will help, and we can help you do just that. In addition, we can take a look at existing credit history and help you find ways to make improvements to your company credit report.

We have our finger on the pulse of the commercial loan industry. Our relationships with credit providers are a bonus to you. We understand the loan services they offer and what it takes to qualify. In addition, we recognize lending patterns. Because of this, we know who is approving more liberally at any given time.

As a result, we can help you find the lender with the loan options that will work best for you. This saves an enormous amount of time. And in the long run, it saves money. Get started today with a free Business Finance Assessment.

The post Why Underwriting Loans May Be Harder to Get appeared first on Credit Suite.

Same-Day Business Loans: Everything You Need to Know

Many small to medium-size businesses need rapid funding at some point. Same-day business loans can be a lifesaver for a business owner, whether there is a cash flow crunch or a time-bound opening. Same-day business loans are structured like any other loan. You receive a certain sum at an agreed-upon interest rate and pay it back with interest over a predetermined repayment time.

The main distinction is that same-day business loans offer funding within a day or less. To get the most of same-day financing opportunities, you’ll often need to keep up with lending industry trends.

Five Types of Same-Day Business Loans You Must Know

Providers of same-day business loans now operate can help smaller companies get through hard times. . There are several business loans and short-term financing options accessible.

1. Business Line of Credit

If you have a line of credit, it functions like same-day business loans in that it lends you money on the go and is accessible anytime you need it. As you make the payments, the line of credit extends anew. It enables you to raise funds just when necessary, pay interest solely on the amount borrowed, and thus build your business credit score.

If you are forming an LLC in Georgia, business lines of credit may be helpful for financing working capital as well as a source for emergency funds.

2. Accounts Receivable Financing

Here, your lenders provide you with a portion of your client’s invoice. This financing allows you to get by until your installments arrive. It includes both invoice factoring and invoice financing. Still, they vary slightly in how lenders collect payments and how invoices are processed.

3. Equipment Financing

Use this type of financing to buy equipment, inventory, or devices to keep your agreements. . You won’t need collateral because the loan gets secured on the equipment itself. It implies that you have a good shot at getting approval even with a bad credit score.

4. Merchant Cash Advance

A merchant cash advance (MCA) is a lump sum of funding you borrow from an online financing provider. And you repay it with a percentage of your businesses’ daily card transactions. The MCA is a quick and straightforward way to secure a business loan, but it is perhaps one of the more expensive models. The amount approved is calculated as a proportion of the business’s daily transactions. The businesses that use an MCA usually charge back between 20% and 40% of the money borrowed as a factor rate.

5. Working Capital Loans

During a downturn in business, use these loans to finance routine operational expenses like rent, salaries, and utility payments. They are mainly for modest sums of money.

Furthermore, these loans tend to not demand collateral and often get repaid over a year and a half. You might be able to secure a working capital loan very fast, particularly if you’ve previously used one and repaid it on time.

The Pros of Using Same-Day Business Loans

A swifter financing process

The key benefit of same-day business loans is that you will get the financing you need on the same day you ask for them. If you get all the necessary documentation ready and match the qualifying criteria, some lenders even grant business loan approval instantly.

A convenient loan application process

Instant business financing does not call for substantial paperwork. To apply for a same-day business loan, you must provide basic financial details but no extensive financial documents.

Loan approval even with low credit scores

Same-day business loans have far less demanding approval thresholds. This is when compared to traditional company finance. While the criteria for business loan providers differ, it is possible to get a quick small business loan with a credit score as low as 500. Furthermore, many same-day lenders do not ask for collateral.

Repayment discounts

It varies from lender to lender. But at times, a lender may provide an early payment discount if you repay your entire loan amount with interest in a particular period.

The Cons of Using Same-Day Business Loans

Higher interest rates and associated fees

Same-day business lenders deal with the financing and approval of riskier applications. This results in greater default risk. To be profitable and offset the risk in the face of increasing loan defaults, such lenders demand higher interest rates and fees.

Fewer lending alternatives

Conventional lenders, like credit institutions and banks, often do not provide instant business loans. As a result, it’s often harder to identify legitimate lenders who offer same-day loans.

Smaller financing amounts offered

Most entrepreneurs seeking same-day business loans resort to personal loans to cover business expenses. Personal loan amounts tend to be much lower than what you’d expect from a conventional business loan.

Takeaways

The trick to getting a same-day business loan is making sure your financing proposal is thorough. You need to fulfill the lender’s requirements for documentation. And you need to submit documents per the lender’s timeline.

At the same time, it’s critical to remember that there is no need to rush the process of applying for a business loan. These loans can be exceedingly expensive due to high-interest rates. Hence, before you enter into a loan agreement, double-check that you understand all the surcharges, cost of interest, and penalties in your term loan contract.

Author Bio:

Matt Horwitz is the founder of LLC University, a website that teaches people how to form LLCs. Matt is the leading authority in LLC education. He is featured in CNBC, Yahoo Finance, Entrepreneur Magazine, and US Chamber of Commerce. Matt holds a Bachelor’s Degree in business from Drexel University with a concentration in business law. LLC University®, established in 2010, was the first company to create free LLC courses in all 50 states.

The post Same-Day Business Loans: Everything You Need to Know appeared first on Credit Suite.

Business Financing with Bad Credit is Possible: 5 Business Loans You Can Get Even With Bad Credit

Bad credit business loans are kind of a mystery. You probably aren’t going to find them at a traditional bank. Rather, business financing with bad credit generally comes in the form of alternative types of financing and from alternative lending sources.

Is it Possible to Get Business Financing With Bad Credit?

If you have collateral, you may be able to get a loan, even with bad credit. Still, there has to be something to mitigate the risk to the lender. So, here are 5 options to consider.

#5 Business Financing with Bad Credit: Cash Flow Financing or Merchant Account Financing

To get cash flow financing, your cash flow must be positive and well managed. That means, you must spend it wisely and avoid taking on more debt than you can handle.

In essence, you are borrowing from part of future expected cash flows. Consequently, the payment schedule is based on projected cash flows and an analysis of historical cash flows. There may be a minimum credit score requirement. However, it will usually not be as limiting as with other types of funding.

Merchant Cash Advances

A merchant cash advance is like cash flow financing. Yet, the amount of funding and repayment is based on credit card sales. Therefore, the business needs steady credit card sales to qualify. Similarly, repayment is a percentage of daily credit card sales. Rates may be much higher than other types of funding, but credit score minimums are lower.

#4 Business Financing with Bad Credit: Equipment Financing

Equipment financing is a great option for purchasing hard assets for your business. The time in business should be at least one year, and there is no requirement to provide financial statements.

#3 Business Financing With Bad Credit: Other Collateral Financing

The amount available depends on the value of the asset being used as collateral. For this type of funding, open invoices and accounts receivable are considered assets that can be used to secure a loan.

Inventory Financing

The inventory itself serves as the collateral for the loan. There may be revenue requirements and a minimum FICO score. However, it will probably not be as limiting as with a traditional loan.

Invoice Factoring

This is an advance on open invoices, with lenders buying outstanding invoices for less than they are worth.

Honestly, the difference in what they are worth versus what the lender pays is the price you pay for getting the cash up front. It’s not technically interest, but similar. As a result, you do not get the full amount of the invoices, but you will get the cash faster. The lender will collect the full amount and keep it.

Account Receivable Financing

Accounts receivable financing is lending that uses unpaid invoices as collateral. Thankfully, there is no personal credit check. Instead, credit providers consider the payment history of your customer to determine the likelihood they will pay you.

#2 Business Financing with Bad Credit; Securities Based Financing

This is a type of collateral financing that can take many forms. The security is investments like stocks, bonds, and investment funds.

IRA Financing

In this scenario, the borrower invests part of retirement funds into the business. It allows more control over retirement plan assets as well as working capital for the business.

Stocks Financing

This type of financing uses securities as collateral, providing ready access to capital. The only restrictions are that you cannot use this for other securities-based transactions.

Bonds Financing

This type of funding is usually for a large business acquisition or real estate purchase. The value of the loan is based on the borrower’s investment portfolio. The best part is, if stocks or bonds have value over $25,000, you can get approval even with bad personal credit.

#1 Business Financing with Bad Credit: FinTech Lending

This is lending from alternative lenders. Generally, they operate online and offer less stringent lending requirements. As a result, they also have higher interest rates.

BlueVine

BlueVine offers invoice factoring and lines of credit. For invoice factoring, there are no reserves or minimums. There is a minimum personal credit score requirement of 530.

They also offer a revolving line of credit for up to $150,000. To get this, a business must have revenues of $10k or more per month, and the borrower must have a consumer credit score of 600+.

OnDeck

At OnDeck, you can get short-term loans and lines of credit. To do so, there must be annual revenue of at least $100,000. In addition, the time-in-business has to be at least 12 months, and you need a personal credit score of at least 600.

To get a line of credit the revenue and credit score requirements are the same, but the minimum time-in-business is 9 months.

Fundera

Fundera offers term loans to businesses with at least one year in business and $90k in annual revenue. The minimum credit score is 600.

They also offer business lines of credit if you have at least 6 months in business and $50k in annual revenue. Collateral may be necessary in some cases, and borrowers with lower credit scores will have higher interest rates.

To get invoice financing from Fundera, there must be at least 6 months in business and $50k in annual revenue.

Bonus: 401(k) Financing

This type of financing is not a loan. Rather, it is a 401(k) Rollover for Working Capital program. The IRS calls this type of program a Rollover for Business Startups (ROBS).

To qualify, the plan must have more than $35,000 in it, and it cannot be a plan you are currently contributing to or with a company where you are currently employed. Better yet, there are no credit score requirements.

Business Financing with Bad Credit Is Possible

It is possible to get business funding with bad credit, though it may not be the traditional type loan you are used to. These options can look different, but they all serve the purpose. If you have bad credit and need funding now, these are good options. However, to get the best rates and terms in the future, work on improving your personal credit score and building business credit. Want to know how to get started? Get a free Business Finance Assessment today!

The post Business Financing with Bad Credit is Possible: 5 Business Loans You Can Get Even With Bad Credit appeared first on Credit Suite.

Don’t Get Furious, Here Are the Fastest Business Loans to Ensure You Win the Race

The fastest business loans out there are typically the ones with the least risk to the lender. As a result, terms and rates may not be awesome, and security is often necessary. Still, if you need funds fast, there are options. You just have to figure out which ones will work best for you.

Fastest Business Loans: Why The Need for Speed?

Expenses cannot wait. This is true whether they are planned or unexpected. Unexpected cash flow issues require that you know about and have access to the fastest business loans out there.

Speed Comes at a Price

The cost of a fast business loan may include:

Higher interest rates
Shorter terms
And lower limits

What Fuels Speed?

Usually, it is not possible for traditional lenders to be speedy when it comes to lending money. However, some alternative lenders can sometimes make it happen. The process goes even faster if you meet qualifications, like good personal credit and a steady cash flow. Of course, having collateral available for security is even better.

Furthermore, the more Fundable your business the faster you can get funding. That all starts with building a Fundable foundation. The stronger the fundability of your business, the faster any loan process will go.

Fast Business Loans are Possible for Anyone

If you are a startup, have bad credit, or you have no collateral, you can still get fast business loans. Yet, it will cost more. Lower credit scores, less time in business, and lack of collateral equal higher interest rates, shorter terms, and lower limits.

Fast Loans with Alternative Lenders

Creditworthiness is not the only deciding factor when it comes to loans with alternative lenders. Other factors lenders might consider include assets, annual revenue, time in business, and more. Not only that, but the approval process is usually faster. In fact, some approve almost as soon as you hit “apply.”

They do not all have the same requirements, but generally you need to be in business for at least a year or two. Annual revenue requirements vary by lender.

Our Picks for Fastest Business Loans

Here are some of the fastest business loan options out there.

Fundbox

For Fundbox, you need at least 6 months in business and a FICO of at least 600. In addition, a minimum of $100,000 in annual revenue is necessary.

Merchant Cash Advance

This is a short-term loan from a bank, alternative lender, or credit card issuer. The Credit Suite Merchant Cash Advance program has no collateral requirements. Better yet, bad credit is not an issue. Rather, funding is based on cash flow, per review of the most recent 3 months of bank and merchant account statements. They are looking for consistent deposits showing revenue is $50,000 or higher annually.

Credit Suite Credit Line Hybrid

You can get up to $150,000 with the Credit Suite Credit Line Hybrid. This is unsecured, no-doc financing that has no collateral or cash flow requirements. Approval is based on personal credit only. However, if a borrower has bad credit they can use a guarantor that has good credit. Initially, rates can be as low as 0%.

Invoice Financing

Invoice financing can be a good option for businesses with irregular cash flow. It allows for immediate payment on invoices, covering cash flow gaps due to slow paying customers.

Equipment Financing

For the Credit Suite equipment financing program, you must have at least one year in business and a credit score of at least 680. There are no financials required, but you will need to provide details on equipment. You can get approval in as little as 24 hours.

SBA 7(a) Express Loan

For established businesses with good revenue and profitability, this is a great option. Large sums are available, and they are faster than standard 7(a) loans. In fact, it can take as little as 30 days instead of 45 to 60 days.

To Get the Fastest Business Loans You Have to Be Prepared

The more prepared you are the faster the process will be. Working now to build fundability is the best thing you can do. Find out more about how to start and these Credit Suite loans with a free business finance assessment today!

The post Don’t Get Furious, Here Are the Fastest Business Loans to Ensure You Win the Race appeared first on Credit Suite.

3 Types of Collateral Loans to Fund Your Business Now

Collateral loans can allow you to get better rates and terms on business funding. Prime assets for collateral include inventory, equipment, real estate, and investments. Often, the asset you are financing itself can be used as collateral. As a result, you can get what you need without depleting cash reserves.

What is Collateral?

According to Investopedia, collateral is:

“…an asset that a lender accepts as security for a loan. Collateral may take the form of real estate or other kinds of assets, depending on the purpose of the loan. The collateral acts as a form of protection for the lender. That is, if the borrower defaults on their loan payments, the lender can seize the collateral and sell it to recoup some or all of its losses.”

Now, here are some examples of collateral loans.

#1 Inventory

You can use the inventory you want to sell as collateral for a loan to buy the inventory!

Inventory Financing

Inventory collateral loans can be in the form of a revolving line of credit or a short-term loan. The funds can purchase products for resale. In fact, the products typically serve as the collateral for the loan.

Of course, there may be restrictions on the type of inventory you can use. For example This not allowing cannabis, alcohol, firearms, or perishable goods is common. Also, there can also be revenue requirements or a minimum FICO score.

Kickfurther

Interestingly, Kickfurther is a combination of inventory financing and crowdfunding. With this platform, you get financing from supporters and fundraise directly to them. They buy through what’s called a Consignment Opportunity.

Consequently, your customers own the products they help fund. That is, 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. It is possible to get funding for up to $2 million in inventory.

Payback terms will vary. However, at the end of each sales period you submit sales reports and provide payment for inventory sold. Furthermore, you must provide a monthly accounting of current inventory levels.

#2 Equipment

There are several ways to use equipment to get collateral loans.

Equipment Financing

These are collateral loans you can use to purchase hard assets for your business. Terms for equipment financing through Credit Suite are as follows:

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

In contrast, you can also lease equipment rather than buy it outright. Often, you will put down less money than you would if you were buying. In addition, you may be able to negotiate flexible terms with an equipment lease.

Even better, it’s easy to upgrade equipment after your lease ends. Of course, this is helpful if your equipment is something like a computer which quickly becomes obsolete.

Terms for equipment leasing through Credit Suite are:
Personal credit score of 640 or above
Provide lenders with any requested details on the equipment you are getting
Up $10,000,000 in equipment financing possible

Equipment Sale-Leaseback

You can also use equipment you already own as collateral. Basically, you sell equipment to a lender for cash, and then lease it back from them. As a bonus, this lets you unlock Section 179 tax savings and depreciate your entire equipment purchase in the first year.

Of course, term lengths and the amount you can finance will vary. First, you need at least one larger piece of higher value equipment to qualify. Then, you can get funding in as little as 3 weeks. Generally, a lender just wants to be sure your equipment does not have any liens against it.

Investments

If you have investments, you can use them to gain access to funding for your business through collateral loans without worrying about credit scores.

IRA Financing

IRA financing allows you to invest a portion of your retirement funds into your business. The result is, you gain more control over the performance of your retirement plan assets. At the same time, you get access to the working capital you need for business growth.

Usually, you will work with a CPA who will help you. You can cash out the lesser of half or $50,000 from an account that qualifies. 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. You can use the funds for almost any purpose. This includes buying real estate or investing in a business. The only restrictions to this kind of lending are other securities transactions, like buying shares or repaying a margin loan.

Also, you continue to earn interest on the stocks, and rates can be as low as 1.6%.

Bonds Financing

Typically, bonds financing is available through large financial institutions and private banks. In general, those that look for these kinds of loans want to make a large business acquisition. Or, they may want to execute large transactions like real estate purchases. In this type of funding, the borrower’s investment portfolio helps the lender determine how much to loan.

Most investment-grade corporate, treasury, municipal, and government agency bonds are fair game. 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 get approval. Even bad personal credit isn’t an issue.

Bonus: 401(k) Financing

To be fair, this is not a loan. You will not have to pay an early withdrawal fee or a tax penalty. The plan, rather than the individual, owns the trade or business through its company stock investments. Since it isn’t a loan against your 401(k), there’s no interest to pay. Instead, this is actually a change of ownership.

Still, it is business funding you can get using investments, so it bears mentioning.

Officially, the name for this type of funding 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.

Credit Suite 401(k) Rollover for Working Capital program highlights:

Low rates, often less than 5%
Your 401(k) will need to have more than $35,000 in it
Can often 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
It must be from older employment
You cannot be currently contributing to the plan

Collateral Loans Can Open Up a World of FundIng With Terms and Rates that Can’t Be Beat

Honestly, collateral loans open up a whole world of funding you may not be able to get otherwise. One benefit is, it’s typically available regardless of credit history. Better yet, the terms and rates can’t be beat. If you have the option, depending on the need and the situation, collateral loans may just be what you are looking for.

The post 3 Types of Collateral Loans to Fund Your Business Now appeared first on Credit Suite.

Top Options for $20k Loans If Your Company Has Been In Business for 3 Years or More

When we talk about building business credit and fundability, we do so with an end in mind. If you start working the process from the beginning, by the time you have been in business for 3 years or more you will have access to all the business funding you’ll need. That includes $20k loans or even higher.

Options for $20k Loans

If you follow the steps in order and handle credit responsibly, by the time you have reached this point you will be eligible for the best rates and terms available.

What are these options available to companies that have been in business for 3 years or more?

Term Loans

Banks are often the first place we think of when we consider financing. Yet, 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.

Generally speaking, the companies banks end up funding have:

Very strong financials and
Near-perfect credit scores
Owners with good personal credit
Collateral

You are more likely to meet these qualifications if you have at least 3 years in business and have been working on fundability and building business credit during that time.

Bridge Loans

A bridge loan is a short-term loan that a business or individual can use until they secure more permanent financing or remove 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. Collateral such as equipment or inventory is common as well.

SBA Loans

Three years or more time in business will help make SBA loans a real possibility. It’ll be easier to get an SBA loan the longer you’re in business. This is because you can more easily show your business is established and making money consistently.

If you can show profitability and responsible credit and bank account management, your chances of getting an approval for an SBA loan will improve drastically.

SBA loans have great terms, so it’s worth it to work toward building eligibility.

SBA 504

The SBA 504 loan program is an economic development loan program that offers small businesses an avenue for business financing, while promoting business growth, and job creation.

This program provides approved small businesses with 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.

For corporations, anyone with a 20% ownership stake (or more) must fill out the application. This includes swearing they are not under indictment for any criminal offense. 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, a borrower may have to contribute up to 20% of the total project costs.

SBA 7(a)

This is 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 given authority to make credit decisions without SBA review.

Businesses must provide Articles of Organization, business licenses, documentation of lawsuits, judgments, bankruptcy, or other pertinent documentation. Also, lenders do not have to take collateral for loans up to $25,000.

For loans in excess of $350,000, the SBA requires that the lender collateralize the loan to the maximum extent possible up to the loan amount.

Online Lending

Online lending works well for those with less time in business, or in situations where traditional lenders will not work. Still, they will offer better terms and rates to those companies in business longer and with strong fundability. That means, it is best to not discount them even after you reach this point.

Some of our favorite online lenders are listed here.

After 3 Years in Business, $20k Loans May Not Be An Issue

If you are here looking for options for $20k loans for your business, and you have been in business for 3 years or more, you are probably going to be okay. This is especially true if you have been working to build strong fundability and business credit as part of that.

If you are struggling to find $20k loans, start now building fundability, including strong business credit, and you’ll get there in no time.

The post Top Options for $20k Loans If Your Company Has Been In Business for 3 Years or More appeared first on Credit Suite.

When Large Loans for Business Are Right for Small Business Owners

Will Large Loans for Business Work for Your Business?

For business owners looking to scale, the old adage often rings true: “It takes money to make money.” You need funding to hire team members, manufacture products, buy equipment and cover marketing or administrative costs. All that adds up fast, leaving business owners on the hunt for financing. But when it comes to determining the size and kind of loan that is right for your business, you need to weigh long-term impact with short-term rewards. You need to determine if large loans for business will work for you.

Large loans for business loans tend to be $500,000 or more. They may be a good option for entrepreneurs who need revenue but want to maintain ownership of their small business.

According to Matt Schulz, chief credit analyst at LendingTree, “Finding investors or partners can work, too. However, those partnerships can come with a lot of baggage.” He adds, “For those who are interested in maintaining control over their business, a business loan might be preferable to adding more cooks in the kitchen.”

Here’s when to consider a large business loan for your small business and what you need to know before taking out the loan.

Consider taking out large loans for business when…

You need to buy new equipment

Whether you’re upgrading existing equipment or buying new tools, using large business loans to fund the initial purchase can be a good option, if you know the risks.

“It’s important to understand that large business loans often require collateral,” Schulz explains. “If you’re using the loan to buy new equipment, the equipment may be the collateral for that loan.”

That means you may have to surrender your new tools if you can’t pay the bills. But using equipment as the collateral tends to be less risky than offering other parts of the business (or even personal assets) instead.

It’s time to move into a bigger space

Owning your own office has its advantages, including potential tax breaks and the ability to customize the space. But it can also come with a hefty price tag. Especially if you want to own a storefront in a popular retail space with a lot of foot traffic.

Enter commercial real estate loans. On average, this financing option covers 60% to 90% of the property’s value, up to $1 million. Since you’ll own the property, your equity will build over time. Plus you’ll have the benefit of an asset that is likely to grow in value. Like a loan for equipment, a commercial real estate loan is secured by the actual property. This means you may lose the real estate if you fall behind on your payments. But you can always consider renting the space if your own business doesn’t take off like you planned.

You want to buy an existing business

If you’re looking to buy a competitor or buy into a franchise, large loans for business can provide the capital you need to make the purchase. When it comes to how much you can qualify for, , you’ll need to provide the lender with a business valuation. Typically, the stronger the valuation, the more funding you’ll receive.

Use the loan for items secured by collateral, like office space or equipment, or for intellectual property. But a loan not secured by collateral will be harder to qualify for and have more restrictions. You may also have to lean more on your personal credit score and business cash flow to prove to the lender that you can pay them back.

Three key points to remember when you take out large loans for business

Large business loans are harder to secure

Per a recent survey, business applications were up 69% in April 2021 compared to the previous year. But those new businesses will have to temper their lending expectations. Large loans for business are often reserved for businesses in operation for at least three years. Strong cash flow, profit and loss statements and credit history also play an important part in getting these loans. .

“If you’re just getting your business off the ground,” Schulz explains, “a personal loan or a small business credit card is a better choice. They may not be as sizable as your typical large business loans, but they’re available to companies that are just getting started.”

As large business loans are harder to qualify for than some other funding options, it may take more time and effort to get them.

“Larger banks may be more willing to give larger loan amounts than smaller banks,” Schulz says. “As with any loan or any type of financial transaction, shopping around is really important. That first offer that you’re given may not be the best one you can get, so take your time.”

Many large loans for business require collateral

As mentioned above, large business loans are risky for lenders. To reduce that risk, lenders tend to require collateral.

You can offer equipment, invoices, office buildings and even personal assets as collateral. Lenders can legally seize these items if you fail to make timely payments. It’s particularly risky to offer personal assets like your house as collateral. Because if the business struggles, you could lose both the business and your home at once.

So while they’re difficult to find, not all loans will require collateral.

“You can find large business loans without collateral,” Schulz says, “but the loans might be smaller and the interest rates possibly higher.”

Large business loans come with large risk

The higher the business loan, the higher the risk that comes with it. Paying back $2,000, even if it requires help from personal assets, might not break you financially. But trying to come up with $450,000 could.

Business owners should consider this with care, , especially in tumultuous economic times like what we’ve experienced in the last year following the coronavirus pandemic.

“In any economy, it is risky to take on debt,” says Shulz. “In a volatile, wildly unpredictable economy like ours today, it can be even more challenging.

“The best advice is some of the oldest: Know thyself. If you are comfortable with the risk that comes with taking on a large business loan and think that it could be an important tool to help take your business to the next level, go for it. Just be sure to shop around and know the details of the loan before you sign on the dotted line.”

Ana Gotter is a business and financial writer with years of experience creating content on topics including personal loans, financial planning, business management, and business finances.

The post When Large Loans for Business Are Right for Small Business Owners appeared first on Credit Suite.

When Large Loans for Business Are Right for Small Business Owners

Will Large Loans for Business Work for Your Business?

Large loans for business loans tend to be $500,000 or more. They may be a good option for entrepreneurs who need revenue but want to maintain ownership of their small business.

Here’s when to consider a large business loan for your small business and what you need to know before taking out the loan.

Consider taking out large loans for business when…

You need to buy new equipment

Whether you’re upgrading existing equipment or buying new tools, using large business loans to fund the initial purchase can be a good option, if you know the risks.

It’s time to move into a bigger space

You want to buy an existing business

Three key points to remember when you take out large loans for business

Large business loans are harder to secure

As large business loans are harder to qualify for than some other funding options, it may take more time and effort to get them.

Many large loans for business require collateral

As mentioned above, large business loans are risky for lenders. To reduce that risk, lenders tend to require collateral.

So while they’re difficult to find, not all loans will require collateral.

“You can find large business loans without collateral,” Schulz says, “but the loans might be smaller and the interest rates possibly higher.”

Large business loans come with large risk

Business owners should consider this with care, , especially in tumultuous economic times like what we’ve experienced in the last year following the coronavirus pandemic.

“In any economy, it is risky to take on debt,” says Shulz. “In a volatile, wildly unpredictable economy like ours today, it can be even more challenging.

Ana Gotter is a business and financial writer with years of experience creating content on topics including personal loans, financial planning, business management, and business finances.

The post When Large Loans for Business Are Right for Small Business Owners appeared first on Credit Suite.

The post When Large Loans for Business Are Right for Small Business Owners appeared first on Buy It At A Bargain – Deals And Reviews.

How to Choose Between PayPal Loans, Square Loans, or Fundbox Loans For Your Business

It can be hard to get a business loan. This is especially true if you are applying for loans from a traditional bank. Sometimes alternative lenders are a better option. You may not realize that companies like PayPal and Square offer loan options for their customers. There are also companies, like Fundbox, that require you to be a customer with them first. These are not banks, so they are referred to as alternative lenders. How do you decide if PayPal loans, Square loans, or Fundbox loans right for your business?

Are Loans from PayPal, Square, or Fundbox Easy Business Loans?

Getting a business loan is not always easy. It can take a long time to find one that is right for your business. This is partially due to the fact the requirements vary widely between lenders. The number of requirements vary as well.

Sometimes you not only need a good credit score, but also collateral, a minimum time in business, and minimum average revenue. Not all businesses meet all of these requirements at once, making it hard to qualify.

Other Options

There are alternative lenders, however, that make things a little easier, even if they aren’t exactly easy business loans. They may have less stringent requirements or rely on things other than collateral or credit score. Fundbox, PayPal, and Square are just a few examples.

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

PayPal Working Capital Loan

If you have a business account with them already, you can get PayPal loans. No personal guarantee is required, and they do not do a credit check. Instead, loan amounts and eligibility depend on your sales via the platform. The maximum loan amount depends on your account history with the company.

To be eligible, you must have a Premier or Business account with them for 90 days or more. In addition, if your account is Premium, you must have at least $20,000 in annual sales with them. If it’s a business account, you must have at least $15,000 in annual sales on the account. You also have to pay off any existing loan with them before you can get another one.

Since payments are automatically deducted as a percentage of each sale through the account, the amount you pay each day varies with your sales volume. As a result, the more you sell, the more you will pay on the loan that day.

You’ll make no payments on days without sales, but there is a minimum repayment requirement every 90 days. Depending on the loan terms you choose, you must pay at least 5% or 10% of your total loan amount (loan + the fixed fee) every 90 days.

The 5% minimum applies to loans estimated to take 12 months or more to repay, based on your business’ past sales through the company and other factors. The 10% minimum applies to loans estimated to be repaid within 12 months.

Are PayPal Loans Right for Your Business?

If your sales volume is strong enough to keep up with repayment and not put your business at risk, it could be a great funding opportunity. It’s probably not something you should open a account with them for on it’s own, but if you already have one it is definitely an option to keep in mind.

Loans from Square

You can also get loans through Square if you have a Square account. Similar to PayPal loans, applying will not affect your personal credit score. Loan eligibility is based on a variety of factors related to your business, including its payment processing volume, account history, and payment frequency.

Loan amounts range from $300—$250,000. You’ll get a customized offer based on your business’s card sales through Square. There is no interest, just an ongoing flat fee.

The fixed fee is the difference between the total amount you owe and the initial loan amount. It will never change, regardless of how quickly or slowly you repay the loan. It automatically deducts until your loan is fully paid.

Like PayPal loans, daily payments fluctuate with sales. On days with higher sales, you will pay more than on days with lower sales. You must pay a minimum of 1/18 of the initial balance every 60 days.

Square doesn’t require collateral for business loans of $75,000 or less. For loans over $75,000, they take a security interest in your business assets. They will file a UCC statement with the Secretary of State where your business is organized. There is no personal guarantee.

Is a Square Loan Right for You?

If you work with Square and need less than $75,000, you don’t even need collateral. That can be a great option. However, if you need more than $75,000, the required UCC statement may be a turn off.

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

Fundbox

If you do not already work with either of the other two, Fundbox may be a better option. Cash flow financing is easy with Fundbox. They just want to know about your cash flow when deciding whether to fund your business. They will connect directly to your online accounting software, and that’s all you need to do.

Fundbox offers a revolving line of credit rather than term loans. Amounts range up to $100,000. They will auto debit your weekly payment from your bank account. The minimum personal credit score requirement is lower than that of most traditional lenders as well.

You pay in equal installments over the course of a 12 or 24 week plan. Available credit replenishes as you pay, and there is no penalty to repay early.

To qualify, your business must be based in the US and you need to have a 600+ personal FICO score. Additional requirements include:

$100,000+ in annual revenue
A business checking account
Ideally 6 months or more in business

Are Any of These a Good Option for Your Business?

That’s the real question, right? How do you know which one to choose? If you already have a relationship with PayPal or Square, and you qualify, then a Square or PayPal loan may be a good option. Unless you would prefer a line of credit, then you may want to consider Fundbox.

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

Of course, if you do not have a relationship with the other two, Fundbox it is. If you aren’t already using one of the payment processing companies, the lending options alone aren’t really a reason to start. Still, they could play a factor in a decision between the two if you are considering one or the other.

Why Choose one of These Options Over Traditional Funding?

The main reason is the lower credit score requirements, or lack of credit score requirement at all. Also, the fact that collateral isn’t really an issue unless you are trying to borrow more than $75,000 from Square. These aren’t the only options however. Credit Suite has a number of funding options to fit almost any business. We can help you find the best fit for your specific needs.

The post How to Choose Between PayPal Loans, Square Loans, or Fundbox Loans For Your Business appeared first on Credit Suite.

A MoneyTips Guide to FHA Loans

Feels like we can’t escape financial pundits telling us to stop eating out and to streamline our streaming subscriptions, so we can save for a down payment. Good advice. But how many decades will that take? Between stagnant wages, student loan debt and everything from cereal to cars getting more expensive (according to the Bureau…

The post A MoneyTips Guide to FHA Loans appeared first on MoneyTips.

The post A MoneyTips Guide to FHA Loans appeared first on Buy It At A Bargain – Deals And Reviews.