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Small Business Loans

Wondering how to get financing for your business can be overwhelming.

The funding options are seemingly endless — from traditional business loans to merchant cash advances to working capital loans. The reality is that whatever type of business loan or funding you decide on, it’s important to make sure the numbers work in your favor and the loan does what it is designed to do — grow your business.

Getting a small business loan doesn’t have to be difficult. Anyone can apply online for a business loan and get instant approval and funding in a matter of days. You can actually start the process with a few clicks.

Of course, the first step on the road to funding your small business is to understand how quickly
you need the money, how the money will be used, and how you will repay the loan.

Is A Small Business Loan
A Good Idea?

Will getting a business loan actually help my business? Is a loan or financing the right choice? These are critical questions to ask yourself before signing loan documents from any lender.

Lenders are in the business of lending money to get a return. When you take on debt for your business, you should expect to get a return for yourself. Jared Weitz, co-founder and CEO of United Capital, states:


“We have many repeat customers because we help our clients make the best of their business financing opportunities by catering to their specific financial scenarios. We’ve found success in building a culture, rather than solely focusing on building a company. That culture is about high integrity, it’s leaving money on the table if that’s what the right move is for the client, and it’s thinking about yourself last because you understand that if the client does well, they’re going to be your client for a long time.”

Jared Weitz
Jared WeitzCEO of United Capital Source

Think of a small business loan as a tool to level up your business. You are using other people’s money to grow your own investment for a higher return.

This is what leverage is all about. And, when used properly, can launch your idea, accelerate growth or provide a cushion against cash flow.

How Small Businesses
Use United Capital Source Funding

There are many creative ways entrepreneurs and business owners use loans to grow their business.
Here are some of the most prevalent ways to use loans to achieve your goals:

Purchase Inventory

Many retailers use short-term business loans to purchase needed inventory. This can be a sound way to manage seasonal dips, replenish stock, or try out new products to sell.

Purchase Equipment

Equipment can be one of a small business’s biggest expenses. Equipment financing programs can provide the funds to buy or update equipment NOW to help you increase profits quickly.

Boost Working Capital

It takes cash flow to pay your employees, keep the lights on, or make debt payments. Working capital loans can be obtained to help you do just this.

Refinance or Pay Off Debt

Consolidating or paying off high-interest loans may be a priority for your small business. Refinancing is a smart way to restructure your debt, decrease your outflow, and increase your profits.

Hire Talented Staff

A small business owner has to wear a lot of hats; sometimes you just get spread too thin. Something will eventually fall through the cracks, and, frankly, you may just need a day off once in a while. Investing money in talent–someone to do your bookkeeping, marketing, or customer service–may be a sound business decision. Gifted employees can give you time to focus on the big picture, as well as help you increase your revenue. This may very well be worth the loan costs.

Scale Operations

Almost every successful small business owner will see a chance to expand their operation. There are many potential ways to grow your business, such as a move into a new product line, or expanding your business site by relocating. Making these types of changes may require a small business loan so you can take advantage of these opportunities of growth.

Cover Unexpected Costs

Small business owners are often surprised by sudden, unanticipated expenses. You may find you need extra insurance, permits, or licenses. An expensive piece of equipment may break and needs to be repaired. Inventory may get lost, damaged, or stolen, which makes a small business loan essential.

Invest in Marketing

In order for a small business to be successful, investing money into marketing is essential. For example, new small businesses need to make prospective customers aware of their company and its products. Growing businesses must generate leads for their sales teams. Retailers need to boost sales by establishing a strong marketing posture. A small business loan may make good sense to a company’s bottom line: marking equals more sales.

After you identify your specific loan needs, the next question should be:
Just how much money do I need?

How Much Small Business Funding
Do You Need?

For many, the answer to how much money to request from a lender is:
You can never ask for too much money.


This isn’t always the best answer. A business can ask for too much money and not qualify or the company can get the loan amount requested, and then realize there’s not enough cash flow to make the payments. Remember: Small business loans cost money. Answering the following questions will help you determine the loan amount that’s best for you:

What will the business
loan be used for?

This is the most central question, as the answer will affect all other parameters. There are many valid reasons for a small business to acquire a loan, but the most important caveat is: Make sure these funds will help you increase your profits in the future. Generally, funding ongoing losses is a bad proposition.

When do you need
the money?

It can take months for some funding sources to approve a small business loan. You need to determine if a lender’s timing works for you. If you need money in February, but don’t receive approval until May, this obviously not be an effective loan for you. Take note, there are a large number of lenders out there, many of which are flexible and can fund your business loan request in as little as two days.

How much will
it cost?

Small business loan interest rates vary greatly depending on the type of lender, type of funding program, and the term of the loan. You can check your payments online by simply using a business loan calculator by putting in the funding amount and interest/factor rate. And don’t forget about the closing costs your funding source may charge.

Business Loan Calculator

Simply enter an amount you want to draw to find out

How long do you need
the money for?

How long will it take you to pay back the business loan? This is where your small business needs to put together a simple financial model on a timetable that will help you determine when your funded project will generate a positive cash flow.

It’s important to subtract the future loan payment from your company’s current profit to see if it can support the loan payment until you are able to show a return on your investment.

For example, your company borrows $500,000 at eight percent interest which results in a monthly payment of $6000. The question is: Can your company’s current profit repay at this rate? Further, you could also do an additional test by reducing your profit by 25 percent to see if the monthly loan obligation could still be met if your profits dip.

How much can you afford?

Your funding source will have debt-to-income (DTI) ratio requirements. They will evaluate your company’s available cash to determine if you can afford to pay back the business loan. This is called your debt service coverage (DSCR). To calculate your DSCR, the lender will need your company’s annual cash flow profit and the monthly payment amount.

Some lenders will require a personal guarantee and will use any shareholder’s credit score to determine loan approval. A shareholder is generally defined as any person who owns more than 20 percent of a company.

Some funding sources may also require a shareholder’s personal DTI. They will calculate all shareholder’s total monthly income to their monthly debt.

What are your future needs?

After you obtain a small business loan, will your company need more funds in the future? This is an important question.

Some small businesses take out the maximum business loan they can afford now, however, this may not be enough money to fund future needs. This can lead to insufficient cash to grow the company. Therefore, it’s advisable that to project cash flow needs over the next three years before a funding amount is determined.

This is the time to consider exploring unsecured business loans with flexible lines of credit. These types of funding can be used for debt consolidation, inventory purchases, operations expansion, or increasing working capital.

When searching for a small business loan, consider applying for 10 to 20 percent more than you actually feel you need, if you can qualify for the higher amount. Expenses are often higher than expected and revenue can take longer to generate than anticipated.

Small Business Loans:
What Are My Options?

Merchant Cash
Advance

Merchant cash advance loans let you repay a fixed percentage of daily sales transactions until the loan is paid back to the lender in full. These loans are available for small businesses that accept credit card payments.

Learn More

MAX FUNDING AMOUNT

$7,500 to $1 million

FACTOR RATES

Starting at 1.09%

TERM

3 – 18 months

SPEED

1-2 Business days

Business Line of
Credit

Business Lines Of Credit allow you to have access to funds as you need them and only pay interest on what you draw.

Learn More

MAX FUNDING AMOUNT

$1,000 to $250,000

INTEREST RATES

Starting at 8%

TERM

Up to 18 months

SPEED

1-3 Business days

SBA 7a, 504 Loans &
SBA Marketplace Loans

SBA 7a, 504 Loans are small business loans guaranteed by the SBA and issued by participating lenders, they are generally secured by Real Estate. In contrast, our SBA Marketplace Loans are secured by the business and the personal guarantor.

Learn More

MAX FUNDING AMOUNT

$50,000 to $10 million

INTEREST RATES

Starting at 5%

TERM

3 – 25 years

SPEED

3-5 Weeks

Receivables/Invoice
Factoring

Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount, it is then paid back each time an invoice comes in.

Learn More

MAX FUNDING AMOUNT

$10,000 to $10 million

INTEREST RATES

Starting at 5.8%

TERM

Up to 24 months

SPEED

1-2 Weeks

Business Term
Loans

A Business Term Loan is a loan given at a fixed term and rate. We offer small business loans with many different repayment methods.

Learn More

MAX FUNDING AMOUNT

$10,000 to $5 million

INTEREST RATES

Starting at 5%

TERM

3 months – 10 years

SPEED

1-3 Business days

Revenue Based Business
Loans

Revenue based business loans are based on the amount of total monthly sales you make. In some cases this program will help more than a merchant cash advance on credit card sales.

Learn More

MAX FUNDING AMOUNT

$10,000 to $5 million

INTEREST RATES

Starting at 9%

TERM

3 months – 10 years

SPEED

1-3 Business days

Business Loans for
Women

United Capital source celebrates women entrepreneurs with business financing products to fit their needs.

Learn More

MAX FUNDING AMOUNT

$10,000 to $5 million

INTEREST RATES

Starting at 9%

TERM

3 months – 10 years

SPEED

1-3 Business days

Bad Credit Business
Loans

UCS understands that past credit problems aren’t relevant to the current performance of your business. If your business is performing well, chances are we’ve got the right funding program, even if you have less than perfect credit.

Learn More

MAX FUNDING AMOUNT

$10,000 to $5 million

INTEREST RATES

Starting at 9%

TERM

3 months – 10 years

SPEED

1-3 Business days

Working Capital
Loans

When you need working capital to get you through a big project, or for day to day business needs, we’ve got the right working capital program for your business.

Learn More

MAX FUNDING AMOUNT

$10,000 to $5 million

INTEREST RATES

Starting at 9%

TERM

3 months – 10 years

SPEED

1-3 Business days

Equipment Financing

UCS offers many types of funding programs for equipment purchases. Many of our clients need to upgrade equipment on a regular basis and UCS is there for them.

Learn More

MAX FUNDING AMOUNT

Up to $5 million per piece

INTEREST RATES

Starting at 5%

TERM

1 – 5 years

SPEED

3-10 Business days

Small Business Loan
Options:

Merchant Cash Advance

Merchant cash advance loans let you repay a fixed percentage of daily sales transactions until the loan is paid back to the lender in full. These loans are available for small businesses that accept credit card payments.

MAX FUNDING AMOUNT

$7,500 to $1 million

INTEREST RATES

Starting at 1.09%

TERM

3 – 18 months

SPEED

1-2 Business days

Learn More

Business Line of Credit

Business Lines Of Credit allow you to have access to funds as you need them and only pay interest on what you draw.

MAX FUNDING AMOUNT

$1,000 to $200,000

INTEREST RATES

Starting at 8%

TERM

Up to 18 months

SPEED

1-3 Business days

Learn More

SBA 7a, 504 Loans & SBA Marketplace Loans

SBA 7a, 504 Loans are small business loans guaranteed by the SBA and issued by participating lenders, they are generally secured by Real Estate. In contrast, our SBA Marketplace Loans are secured by the business and the personal guarantor.

MAX FUNDING AMOUNT

$50,000 to $10 million

INTEREST RATES

Starting at 5%

TERM

3 – 25 years

SPEED

3-5 weeks

Learn More

Receivables/Invoicing Factoring

Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount, it is then paid back each time an invoice comes in.

MAX FUNDING AMOUNT

$10,000 to $10 million

INTEREST RATES

Starting at 5.8%

TERM

Up to 24 months

SPEED

1-2 weeks

Learn More

Business Term Loans

A Business Term Loan is a loan given at a fixed term and rate. We offer small business loans with many different repayment methods.

MAX FUNDING AMOUNT

$10,000 to $5 million

INTEREST RATES

Starting at 9%

TERM

3 – 10 years

SPEED

1-3 Business days

Learn More

Revenue Based Business Loans

Revenue based business loans are based on the amount of total monthly sales you make. In some cases this program will help more than a merchant cash advance on credit card sales.

MAX FUNDING AMOUNT

$10,000 to $5 million

INTEREST RATES

Starting at 9%

TERM

3 – 10 years

SPEED

1-3 Business days

Learn More

Business Loans for Women

United Capital source celebrates women entrepreneurs with business financing products to fit their needs.

MAX FUNDING AMOUNT

$10,000 to $5 million

INTEREST RATES

Starting at 9%

TERM

3 – 10 years

SPEED

1-3 Business days

Learn More

Bad Credit Business Loans

UCS understands that past credit problems aren’t relevant to the current performance of your business. If your business is performing well, chances are we’ve got the right funding program, even if you have less than perfect credit.

MAX FUNDING AMOUNT

$10,000 to $5 million

INTEREST RATES

Starting at 9%

TERM

3 – 10 years

SPEED

1-3 Business days

Learn More

Working Capital Loans

When you need working capital to get you through a big project, or for day to day business needs, we’ve got the right working capital program for your business.

MAX FUNDING AMOUNT

$10,000 to $5 million

INTEREST RATES

Starting at 9%

TERM

3 – 10 years

SPEED

1-3 Business days

Learn More

Franchise Financing

UCS offers many types of funding programs for franchises. Many of our clients have multiple locations and use us to renovate and expand.

MAX FUNDING AMOUNT

$100,000 to $10 million

INTEREST RATES

Starting at 5%

TERM

3 – 25 years

SPEED

3-5 weeks

Learn More

Secured Business
Loans Vs. Unsecured
Business Loans

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Secured Business Loans Vs. Unsecured Business Loans

When the time comes that you need a loan for your small business, there are lots of choices available: you can borrow money from a family member, get a cash advance on a credit card, obtain a traditional business loan from a bank, or acquire funds from a more flexible online funding source.

When choosing a loan that’s the right fit for your business’s specific needs, you will probably have questions about secured and unsecured business loans. It’s important to know the difference between the two, and which one will best meet your needs. Below are explanations of both secured and unsecured business loans.

Secured Business Loans

With a secured small business loan, you must provide some type of collateral in case you default. Collateral is something that you pledge as security for repayment of your business loan. Some examples of collateral could include: a home, a car, investments, equipment, or other assets that can be liquidated in case of default.

Things to note when looking for a secured business loan:

  • Interest rates are usually lower on a secured business loan.
  • They can be easier to get because adding collateral will pose a smaller risk to the lender.
  • When obtaining a secured business loan, make sure that your collateral is something you’re willing to lose. If you default on your loan, you’ll lose your collateral.
  • Make sure you get an accurate assessment of your collateral’s true worth before you speak to a business lender.
  • Be aware that business lenders usually give a lower value to your collateral because they need to liquidate it quickly. Therefore, your collateral will be sold at a low price.
  • If you have a recent valuation of your collateral, you can more easily convince a lender of its true worth.
  • Any interest paid in association with a secured business loan can be a write-off on tax returns.

Unsecured Business Loans

Unsecured business loans are approved without any collateral from the borrower. These approval decisions are made based on the business’s financial health, your credit rating, as well as other methods that help to determine your creditworthiness.

No collateral means a riskier business loan for the lender. Because of this extra risk, be aware of the following:

  • These business loans will have higher interest rates can sometimes be higher than rates on your credit cards.
  • Interest rates are usually fixed, but it may be possible to get a variable rate.
  • They are harder to obtain and lenders fund fewer of them.
  • The term of your loan will be shorter than that of a secured business loan.
  • Unsecured business loans require a strong credit rating.
  • These loans require you be in business for at least two years.
  • A secured business loan is not for startup funds or people with poor credit ratings.
  • Because there is no collateral, you won’t be able to write-off any interest paid on your tax returns.

Next, you’ll need to decide is your business loan should be based on the amount of cash flow your company has, or the amount of assets you or your company owns.


Cash-Flow Lending
Vs. Asset-Based
Lending

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Cash-Flow Lending Vs. Asset-Based Lending

No matter what size or how old a company is, it probably will have to rely on borrowed capital. Whether a business requires startup funds, has cash flow needs, or wants to update equipment to stay competitive, it will likely finance through one of two lending methods: cash-flow or asset-based.

A cash-flow-based loan allows your business to borrow funds supported by its projected future cash flow, while an asset-based business loan allows you to borrower money predicated on the liquidated value of assets on your company’s balance sheet.

Following, is a comparison of these two lending methods:

Cash-Flow Lending

Cash-flow loans are backed by the borrower’s business and/or personal cash flows, which means your funding source underpins its lending decision on anticipated revenues your company will receive in the future.

One example of this is a company that needs to meet its payroll obligations could use cash-flow financing to pay employees now and payback the loan with profits and revenues generated by its employees in the future.

Cash-flow-based loans are underwritten by determining your company’s credit capacity. This is done by using your enterprise’s earnings before interest, taxes, depreciation, and amortization (EBITDA), along with a credit multiplier which calculates this figure. This financing method allows lenders to assess any risk brought on by sector and economic declines.

During an economic decline, your company may experience a dip in its EBITDA. If this happens, there will also be a decline in your lender’s risk multiplier, which will reduce the available credit capacity of your organization.

Cash-flow loans have the following advantages and disadvantages:

  • These business loans don’t have any type of collateral requirements.
  • Loan approval is based on expected future business income, a good credit rating, and the value of your enterprise.
  • You can get the funds you need very quickly.
  • These business loans are best suited to a company that has consistent high margins on its balance sheet and/or have few hard assets to offer as collateral (service companies, law firms, or manufacturers of low-margin products).
  • Interest rates are usually higher due to lack of collateral.

Asset-based Loans

With asset-based lending, the loan will be secured by the liquidation value of your company’s assets. To obtain this type of business loan approval, your company will need to offer up collateral. Said collateral is most often in the form of land and physical properties, business inventory and manufacturing equipment, or physical commodities. If the borrower defaults on the loan, the lender can seize the collateral and sell the assets to recoup their loss.

While cash flow is a consideration in the underwriting decision, it will be a secondary concern. An asset-based business loan is tailored to organizations with large balance sheets and lower EBITDA margins–organizations that require capital to grow but might not have significant cash flow.

The strength of an enterprise’s credit rating is an important underwriting factor. In their book entitled The Portable MBA in Entrepreneurship, authors William D. Bygrave and Andrew Zacharakis state that companies with a strong credit rating may be able to borrow from 70 to 90 percent of the face value of their accounts receivable, while those with weaker credit may only be able to get 60 to 70 percent. However, when providing physical inventory or manufacturing equipment as collateral, the borrower might get less than 50 percent of the asset’s perceived value. This is because, if the business loan is defaulted on, these assets are generally sold through liquidation or auction, as the lender usually needs to sell quickly to get its money back.

Get Complete Book

Asset-based loans have strict rules in regard to the collateral status of a physical asset:

  • The asset must never be offered as collateral to any other business lender.
  • If the asset is already pledged to another lender, this former business loan provider must subordinate its position to the new lender.
  • Prior to the business loan agreement, the borrower must address any and all concerns with the asset that could affect the lender’s ability to secure and sell it in liquidation (e.g. accounting, tax, or legal issues).
  • These business loans usually require a lengthy due diligence process, which includes the inspection of balance sheet, ledgers, and assets to help the lender determine the company’s borrowing capacity. There may be costs associated with this process.

Types
of Business Loans

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The type of business loan you decide on will determine interest rates, total loan cost, the loan term and how the money will be repaid to the lender.
Small business owners who are looking for financing have many options. The right business loan product depends on your specific needs.

Here is a breakdown of the different types of business loans available to you.

Types of Business Loans

SBA Loans

The Small Business Administration doesn’t fund these loans, but they do guarantee them. Repayment periods vary depending on how the money is used. The loan terms range from seven years for working capital to ten years for buying equipment and twenty-five years for real estate purchases.

  • Offers some of the lowest rates on the market
  • Offers high loan amounts (up to $10 million) with long repayment terms
  • Have a long/rigorous application/approval process.
  • Best for businesses wishing to expand or refinance existing debt
  • Best for strong-credit borrowers

Business Line of Credit

A business line of credit provides funds up to a determined credit limit. You pay interest only on the money drawn.

  • Provides more flexibility than a term loan
  • Typically unsecured
  • Can carry additional costs, such as maintenance and draw fees
  • Requires strong revenue and credit
  • Best for financing needs like managing cash flow or unexpected expenses
  • Best for seasonal businesses

Bad Credit Business Loans

Special business loan programs have been created for those businesses that have a poor or limited credit history.

  • Lenders look only at your last three months bank and merchant statements
  • Your business must be earning consistent revenue and be making profits

Merchant Cash Advance

You get a lump sum of cash upfront. Instead of making one fixed monthly payment, as you would with a term loan, you pay a merchant cash advance, either in the form of a percentage of your daily credit and debit card sales, or by a fixed daily or weekly withdrawal from your bank account.

  • Gives you fast cash with unsecured financing
  • Has the highest borrowing costs
  • Frequent payments could create cash-flow difficulties
  • Best for businesses with high and consistent credit card sales
  • Best for businesses that can’t get financing elsewhere and need capital quickly

Small Business Loan for Women

Statistics show that women find it significantly harder to obtain business financing than men do. There are three primary reasons for this:

  1. Women tend to start a business with less personal funding than men do, which means women usually have a lower net worth. Lower net worth gives the impression that the borrower won’t be able to make payments should the business not go as planned.
  2. Female-dominated industries, like retail or hospitality, are seen as risky and low-growth in nature. Traditional business lenders are less likely to approve these loans.
  3. Women tend to have lower credit scores than men, reportedly around 20 points lower. Credit scores have traditionally been pivotal in the approval of small business loans.

To combat this unequal access to business loans, special programs are now available to women, religating preconceived notions about women-owned businesses to the past.

Equipment Financing

These loans provide money to buy equipment for your business. The purchased equipment itself is used for collateral. The loan term typically coincides with the life span of the equipment.

  • Rates depend on the value of the equipment and the strength of the borrower’s credit.
  • You own the equipment and build equity in it.
  • You may have to come up with a down payment.
  • Best for a business that wants to own its equipment outright.

Working Capital Loans

These loans are meant to finance a business’s day-to-day, short-term operations, such as payroll, rent, debt payments, or to help with times of reduced business activity.

  • Provides fast cash, and easy approval.
  • Borrowers with strong credit can obtain unsecured business loans.
  • Borrowers with poor or limited credit history may need to provide collateral.
  • These loans are often tied to the business owner’s personal credit.

Factoring Finance (Credit Card Factoring)

If this sounds a lot like a merchant cash advance — it’s because it is. Credit card factoring is a type of business loan where the loan provider approves funding based on the average volume of credit card sales.

This type of funding is best for businesses that have consistent debit and credit card transactions each month, but little to no collateral and/or bad credit. This type of financing has several different names: business cash advance, merchant funding, merchant account cash advance, or merchant cash advance.

The funding of this program involves a lump-sum payment to your company in return for future credit/debit card sales. Your available funding amount will be based on your company’s monthly volume of credit/debit card transactions.

This type of financing is popular for several reasons:

  • Easy to qualify for
  • Funds quickly
  • Bad credit is okay
  • Flexible payment plans
  • No collateral required
  • Cheaper than using a company credit card

If a bank denies your loan application or you don’t feel you’d get approved for a traditional loan, a business loan against future credit card sales is a viable option.

Business Term Loan

This is a common form of business financing. You get an upfront lump sum, which is then repaid with interest over a predetermined period of time.

  • Gives you cash upfront to invest in your business
  • Typically has higher loan amounts
  • Fast funding if you use an online business lender (a few days to a week)–using a traditional bank may take several months
  • May require a personal guarantee or collateral
  • Best for businesses looking to expand
  • Borrowers usually need strong credit and an established business

Revenue Based Business Loans

This type of financing is similar to a Merchant Cash Advance, but instead of determining your funding and repayment amounts on only credit/debit card sales, you are taking into account all forms of revenue including those that come from credit/debit sales.

  • Gives you fast cash.
  • Can qualify for more funding than a merchant cash advance
  • Sometimes referred to as a “Business Cash Advance”

Accounts Receivable Factoring

This is a bit different from a normal business loan. For services rendered, a typical business sends out an invoice which is due in 60 days. If you need cash quickly and can’t wait to get the payment on this outstanding debt, you can get cash for your unpaid invoices. The invoices can be sold to a factoring company, which will be responsible for collecting from your customers when the invoice payment becomes due.

  • Supplies fast cash for your business
  • Usually has easy approval, but can be costly when compared to other types of business loans
  • You will lose control over the collection of this debt
  • Best for a business with reliable customers with long payment terms (30, 60 or 90 days)

Now that you’ve determined what type of small business loan you need, you’ll probably want to know how to get it.


How to Get
A Business Loan

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How to Get A Business Loan

The first step to securing a business loan is to get all of the necessary documents in order so you can submit them to the lender when you apply for the loan. The types of documents you will need will vary based on the type of business loan you are applying for.

United Capital Source — and most business lenders —  typically requires the following:

  • Driver’s License
  • Voided Business Check
  • Bank Statements
  • Credit Report
  • Business Tax Returns (For SBA and longer term loans)
  • Credit Card Processing Statements

Keep in mind that, while your credit score is reviewed by lenders, bad credit is okay, depending on the type of business loan you want.

United Capital Source works with small business owners with ALL credit profiles. While we cannot speak for all lenders, our criteria for small business loans and most of our working capital programs are tied to business revenue, accounts receivables and projected revenue.

Most lenders that specialize in bad credit business loans just need to see documentation that shows or indicates that an influx of capital is all that is required. If your business is bringing in revenue, lenders pay less attention to your credit score. That is why getting a business loan with bad credit isn’t a problem.

To understand how business lenders approach financing, you have to understand what they look for when reviewing an business loan application. You want to look at your lending profile the same way a potential loan provider would.

Small business lenders look at what is known as The 5 C’s of Credit.


The Five
C’s of Credit

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The Five C’s of Credit

  • Character: A prospective lender’s opinion of you and your business is important. Are you trustworthy? Credible? What kind of personality do you have? A lender wants to loan money to business owners who are responsible about meeting their commitments and they also want to have a good working relationship.Lenders assess these somewhat subjective attributes by looking at the business owner’s credentials, references, and by interacting with them in positive ways.
  • Capacity/Cash Flow: This simply is a small business’s ability to repay the loan. In a nutshell: Does your company generate enough money to make payments as the new business loan specifies?Your business lender will analyze things like: debt and liquidity ratios, cash-flow statements, credit score, and previous or current loan repayments.Online lenders are more open to helping small businesses with immediate financing needs, such as cash-flow gaps.To qualify for a business loan consider paying off/down some of your current debt.
  • Capital: This is the amount of money the business owner(s) or management team has invested in the company. Lenders like to see that an owners has invested personal funds into the business.According to Small Business Administration statics, almost 60 percent of small-business owners used personal savings to start their enterprise. So, it’s always best to put your own resources into the mix. However, there are ways to obtain startup funding if you don’t want the entire burden of the risk.
  • Conditions: The questions here are: How will your small business use the loan? And, how will the loan be affected by economic or industry conditions?When times are good, lenders want to lend money to businesses that are operating under favorable conditions. As part of the business loan process, they’ll review the competitive landscape, as well as supplier and consumer relations, and any industry-specific issues to be aware of to reduce risk.There’s no way your small business can control the economy, however, you can plan for contingencies. Consider preventative loaning policies, like taking out a business line of credit when your company’s running strong and doesn’t need the cash–then, if conditions worsen, you may have a bit of a cushion for a while.
  • Collateral: Hard assets can be pledged to help a company secure a small business loan–assets like: real estate (owned by the company or even the owner’s home; equipment; working capital (e.g. accounts receivable and inventory)Please note that choosing the right business structure can help protect an owner’s personal assets. Making your company a legal entity could help you mitigate your risk.

Business Loan
Requirements

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Business Loan Requirements

The small business loan scene has changed dramatically since 2007. Pre-2007 there was only one source of funding for small companies–the local bank. Because there was only one type of lender, loan application and supporting document requirements were fairly universal.

After the recession, the amount of capital available to the small business sector fell significantly. To help fill this void, alternative business loan providers cropped up to offer the funds that these companies needed to grow. As a consequence, the new business loan products offered came with additional and varied underwriting requirements.

However, there continue to be many requirements that all funding sources have in common. Here are several:

  • Loan Amount: The amount of funding you’re seeking will be the first thing required for business loan application. If you need a large amount of capital, going to a bank is the best way to go. Banks often issue business loans that are six and seven figures.Should you need a smaller amount (less than $500,000), a bank probably won’t be too interested. Alternative online lenders specialize in these types of small business loans with fast approval. For this convenience, online lenders do charge a higher interest rate. However, the terms of the business loans they offer are shorter than a bank loan term, so you’ll end up paying fewer dollars of interest in the long run.

    Another small loan route (under $50,000) might be sought through a lender who offers SBA micro-loans.

  • Loan Purpose: A lender will need to know how you’ll be using your business loan proceeds. There’s a whole list of acceptable ways to use these funds–from covering seasonal dips, funding a construction project, purchasing equipment, to refinancing existing debt.Most business lenders allow funds for multi-purposes–they just need to know that the usage matches up to your stated loan purpose. For example, if you’re trying to obtain a working capital loan, be sure you explain what you plan to do with it, like paying vendors, rent, or salaries.
  • Personal Credit Score: Your personal credit score reflects your ability to manage your personal finances. Lenders assume that if small business owners handle their personal debt well, they’ll also handle their company’s debts well. If you want to obtain start-up funds, your personal credit score will be even more important.As soon as you apply for a business loan, the lender will access your credit score and a brief summary of your credit report. This won’t impact your credit in any way and is enough information for your lender to give you a pre-approval. However, you need to know that during the underwriting process, a hard credit pull will be done, which will ding your credit score by a few points.
  • Business Credit Score: A business credit score reflects your company’s creditworthiness. The score is based on your enterprises’ history of debt payment, type of industry, its size, and it revenue.Many entrepreneurs are unaware that their companies even have a business score. Business credit agencies can create a file on your business for any number of reasons–such as the opening of a business bank account, incorporation of a business, or an application for an employer identification number (EIN).There are three major agencies that track and score business credit: Dun & Bradstreet (D&B), Equifax, and Experian. D&B and Experian use a 0 to 100 scoring scale, while Equifax supplies three different scores, each with a different scale.There is one more score, called the FICO Small Business Scoring System (SBSS), which has a scale of 0 to 300. This is the score used by most business funding providers because it’s based on the combination of the scores supplied by the above mentioned three agencies plus the owner’s personal credit score and business financials.

    Not all lenders check a company’s business credit, but if they do, they can pull it any time during the underwriting process.

  • Time in Business: Every lender is going to want to know how long a company has been in business. The magic number is two years.If your business has been open for less than two years, it will still be possible to get a business loan, but your options will be more limited. There are funds out there to help newer organizations and you may be able to get an SBA loan. There are even online lenders that offer business loans with a one year (maybe less) in business.

    Should you own a new company, you can help increase your chances of getting a business loan by preparing a strong business plan that shows how you intend to grow your revenue and profits within the next three to five years. A strong personal credit score and good collateral can also help.

  • Business Plan: For a traditional business loan or an SBA loan, the submission of a business plan will be a requirement. This plan needs to include both financial and qualitative business goals.Any financial plan must include a year-to-date profit and loss statement (P&L), plus the two previous year’s statements, if you’ve been in business for that long. (More about this later).More qualitative plans are also important. This is where you can be creative; show the passion you have for your enterprise. You started your company because you thought you could offer something of value to your customers. Lenders want to see that you’ve thought about the opportunities and challenges for your business–that you’ve spent time dealing with how to grow a successful venture.A business plan should be in the range of 30 to 50 pages long and should incorporate the following information: business mission statement; background information on the owner(s)/management team; resumes for key employees; target market and competitor information; products sold or services rendered; marketing strategy; financial projections for the next three to five years; historical financial information (if your company is mature); description of office/facility spaces; and an executive summary of your business plans for the future (one or two pages).

    For further help, check out Bplans’ Standard Business Plan Outline.

    https://articles.bplans.com/a-standard-business-plan-outline/
    https://www.unitedcapitalsource.com/blog/how-to-create-a-business-plan-for-a-small-business-loan/
    https://www.trustedchoice.com/insurance-articles/business-occupational/how-to-write-a-business-plan/

  • Industry: A company needs to identify its industry when applying for a small business loan. Every industry has a different type and level of risk that could affect its financing eligibility.Most business lenders have certain industries they won’t lend to. They tend to blacklist those industries that could affect their reputations–industries like firearms, adult entertainment, and gambling.

    Business lenders also blacklist some less obvious sectors–child care, health care, law offices, apparel sales, and finance. Be sure you check out any lender you’re interested in doing business with to make sure your industry is not restricted.

    To ensure you have correctly identified your industry, you can look up your code on the North American Classification System (NAICS).

    https://www.naics.com/search/

  • Entity Type: There are four main ways to organize a small business: sole proprietorship, partnership, limited liability company (LLC), or corporation. You’ll need to inform your lender as to your organization’s legal business structure. This information will give your lender some insight into how your company is organized and how it operates.Although it’s rare, some lenders won’t lend to a sole proprietorship or partnership. They are more comfortable with an LLC or corporation because these entities have more legal protection and are less likely to implode if the owner faces a lawsuit or a financial setback.If you do have an LLC or corporation, you will need to provide the state your entity is registered in and proof it’s allowed to conduct business in the state in which it operates by submitting a copy of your articles of organization, or a certificate of good standing.
  • Business Licenses and Permits: Depending on the type of industry and the state you’re in, you’ll have been issued various paperwork that allows you to operate your business. Have these ready to show your lender.
  • Employer Identification Number (EIN): An EIN is like a social security number for a business. Not all businesses require an EIN, but if your company has one, it needs to be on your loan application.Businesses that require an EIN are: corporations, multi-member LLCs, LLCs that are taxed as a partnership or corporation, and companies that have employees.

    Should your business not fall into one of these categories, you will be able to use your social security number on your business loan application.

    Please note that all businesses can obtain an EIN–no matter what their structure is. There’s an advantage to getting an EIN, in that it can help you maintain a separation between your personal and business finances and helps to show your business loan provider that your enterprise is legitimate and professional.

    It’s easy to obtain an EIN; it’s free and will take just minutes. Simply apply online on the IRS website.

  • Proof of Collateral: Collateral can consist of real estate, equipment, or inventory used to make a product. If you are unable to repay your loan, your securitized property will be forfeited.The good news is that most online, alternative business lenders don’t require collateral to securitize their loans. However, SBA and traditional bank loans often require collateral.

    Things to note if you plan to pledge collateral for a business loan: A professional certified appraiser can help you make sure you know the true value of your property; for a commercial real estate loan, the collateral is the land or the building being purchased; for equipment loans, the equipment itself is the collateral.

  • Annual Business Revenue: To show a lender a company’s revenue, a profit and loss statement (P&L) may very likely be requested. A P&L is also called an income statement. A lender will typically want to see a current P&L within 60 days, as well as the last two year’s statements.The requirements that surround this issue vary widely. At one end of the spectrum you’ll find that banks usually will only work with a profitable entity; SBA loans also often have a profitability requirement. There are lenders in the middle range that don’t have a profitability demand but do have revenue minimums. At the opposite end of the spectrum, there are some business loan providers that don’t have any revenue minimums but just want to see an upward revenue flow.Here’s a free online income/profit and loss statement you may find helpful:

    https://quickbooks.intuit.com/r/financial-management/free-income-statement-i-e-profit-and-loss-statement-template-example-and-guide/

  • Bank Statements: Looking closely at business bank statements is one of the most common ways a lender can determine if a company can afford a business loan. Bank statements also give business lenders insight into how revenue is managed by the company. They look at both whether your business is making money and that it is being handled well. They also will very likely calculate your average bank balance to make sure you have enough of a cash cushion to operate your company and repay your business loan.Generally, lenders will ask for four months bank statements, but prepare to supply even more for a bank or SBA loan.
  • Balance Sheet: Balance sheets are a business loan requirement that lenders will analyze closely. A balance sheet shows what your enterprise has (assets) and what it owes (debt).Lenders usually require a year-to-date balance sheet plus the last two years sheets (if you’ve been in business that long).Need a balance sheet for your small business? Here’s where you can get a free one online:https://quickbooks.intuit.com/r/accounting-finance/small-business-owners-guide-balance-sheets-free-template/
  • Personal and Business Tax Returns: Most business lenders will require two years personal tax returns. These are particularly important if you have a sole proprietorship, partnership, or S corp, as these are companies report business profits and losses on personal tax returns.Business tax returns become a requirement if your company is a corporation or an LLC that is taxed as a corporation. If this describes your business, some lenders will require your last two years business tax returns.
  • Copy of Your Commercial Lease: If you have a brick and mortar business, you should include a copy of your lease with your business loan application. What lenders look for here is confirmation that your business will be able to use the leased property for as long as the term of the lease–no matter what may happen to the landlord.
  • Business Debt Schedule: A company must disclose all debt information to a lender. The use of a business debt schedule will highlight all outstanding debt, monthly payments, and payment dates.To get a free business debt schedule go to:http://www.wsbt.net/Business-Banking/DebtScheduleForm.pdfObviously, small business loan providers are careful about lending to companies with outstanding debt. They usually will calculate a business’s debt service coverage ratio (DSCR). This is the ratio between current debt and interest payments and current incoming cash flow. If your DSCR isn’t high enough, the lender may reject your business loan request.

    A business debt schedule is a good tool to help you organize your debt and income information so you can calculate your DSCR.

    Below, you will find an article that explains how to calculate your DSCR.

    https://www.investopedia.com/terms/d/dscr.asp

  • Accounts Receivable Aging and Accounts Payable Aging Reports: Some lenders (particularly banks) will ask for current accounts receivable (A/P) and accounts payable (A/P) aging reports. These tell the lender how competent your business is at receiving payments for goods/services and paying its own bills..The A/R report details the number of invoices you’ve sent to overdue clients and the length of time these accounts have been overdue. You don’t want to have too many accounts in this report as it shows you may not be as effective as you should be in collecting these payments.https://www.accountingtools.com/articles/what-is-accounts-receivable-aging.htmlThe A/P report shows just the opposite; it highlights the number of invoices your company hasn’t paid. Ideally, you should have only a few (or zero) outstanding overdue accounts.

    https://www.accountingtools.com/articles/the-accounts-payable-aging-report.html

  • Ownership and Affiliations: Applying for a business loan when there are multiple owners can get a little complicated. All owners must be disclosed to your lender, as well as any affiliations you may have, such as being a board member or consultant in another business. This information discloses any potential conflicts of interest.The SBA will want the personal financial information of anyone who owns 20 percent or more of a company and requires a personal guarantee from each owner. Other business lenders are interested only in partners that own 50 percent to 70 percent of the business.
  • Legal Contracts and Agreements: Depending on the business loan purpose and type of business, lenders may ask for some of the following:
    • Contracts with major suppliers or other third parties
    • Corporate bylaws
    • LLC operating agreement
    • Franchise agreement
    • Sales agreement and financial information about a business being purchased
    • Commercial real estate purchase agreement or equipment purchase agreement

Finally, you may need to prove your business is indeed small. This can be determined by the number of employees or the number of dollars generated by your business. A copy of payroll records could be required.

If you have poor credit, there still could be a small business loan for you.


How to Get A Business Loan
With Bad Credit

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How to Get A Business Loan With Bad Credit

If you have bad credit and wanted a small business loan ten years ago, well, the fact is you wouldn’t find one. If you had a personal credit score of 629 or less, getting any kind of small business loan would be a crapshoot.

Today, we have a fast-growing alternative business lending industry that provides several options for bad credit financing, such as:

  1. Short Term Business Loans
  2. Short Term Business Lines of Credit
  3. Invoice/Receivables Financing
  4. Equipment Financing
  5. Merchant Cash Advances
  6. Revenue Based Business Loans (Business Cash Advance)

First, bad credit is defined by Fair Issac Corporation (FICO) as a score of 300-629. In most cases, poor credit equals a higher risk of default on a business loan.

One of the most important things to know when looking for a bad credit business loan is that alternative online business lenders are talking about your personal credit. A small business owner’s personal credit score is a critical part of the business loan underwriting process. The only institutions that will be considering your business credit will be traditional banks.

While credit scoring is important, there are many different elements that go into the approval of a small business loan, bad credit or otherwise. Factors such as annual revenue, time in business, and whether there’s been a recent bankruptcy. Just because your credit hits a certain target score, doesn’t guarantee you’ll get approved for the business loan. The best way to see if you qualify for financing is to simply apply.

That being said, there are some general credit score benchmarks that may help you find a business loan suitable for your company:

  • At 700 or higher, your credit score will help you qualify for most business loans, including traditional bank loans and Small Business Administration (SBA) loans.
  • At 650-699, you might still be able to qualify for an SBA loan.
  • At 620-649, you should be able to qualify for a medium-term loan.
  • At 550-619, you could qualify for a short-term business loan, and, maybe a medium-term loan, should your business be in good financial condition.
  • At 500-549, you may have difficulty obtaining some kinds of business loans. However, if your company is in really good shape, this could cancel out this lower score.
  • At 500 or lower, you’ll have a very hard time qualifying for most business loans. But, again, if your business is doing extremely well, this fact could open a few doors and there are even a few loan programs out there that have no minimum credit score requirements.

There are many small business loan programs out there with many flexible requirements, but loans requests do sometimes get declined. It’s a good idea to note the specific issues that could cause you trouble.


Common Reasons
for Business Loan
Rejection

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Common Reasons for Business Loan Declines

Being declined for a business loan isn’t the end of the world. If you receive a business loan application rejection, make sure you find out the reason(s) for the denial. Some business lenders are reluctant to do this. However, the law requires business loan providers to mail a notice of explanation for credit denial to all their clients. If you know what your company’s particular problems are, you can deal with them.

Here are some of the most common reasons for business loan denial:

  • Credit Score Issues: If your credit score is too low for the business loan you’ve applied for, remember credit score benchmarks differ from lender to lender.
  • Time in the Business: New businesses tend to have limited or no credit history. They haven’t had time enough to establish meaningful payment patterns needed for business loan qualification. A way to build up your credit profile more quickly is to make sure all of your creditors report your payments, as not all of them do. It’s quite possible for a young company to be very successful and have strong financials, even if it hasn’t had its doors opened for long.  The right business lender may be out there, as longevity requirements vary from lender to lender.
  • Your industry is risky: Some industries are just simply labeled as dicey because they have a high risk of failure (such as restaurants and retailers), or they operate in a “vice” arena (such as gambling). Getting a business loan may require these types of businesses to jump some extra hurdles. If your loan is rejected for this reason, you may be able to find a funding source that specializes in your particular industry.
  • You don’t have enough collateral: Some industries are just simply labeled as dicey because they have a high risk of failure (such as restaurants and retailers), or they operate in a “vice” arena (such as gambling). Getting a business loan may require these types of businesses to jump some extra hurdles. If your loan is rejected for this reason, you may be able to find a funding source that specializes in your particular industry.
  • Your debt utilization is too high (or too low): The typical business lender wants a company to use no more than 30 percent of its total available credit. If your company has too much debt, many lenders will consider you to be overextended and in danger of being unable to repay business loans. For example, if your company has a $100,000 business line of credit and has already used $90,000 of it, you could be considered a higher risk.Conversely, if you don’t have any debt or a lack of history of having successfully paid off debt, you could also be considered a higher risk. It always makes sense to know your total credit limits for each of your credit sources, as well as the total debt each source carries. This will help maintain reasonable debt usage. Should your debt be too high, please note that there are debt consolidation loans available.
  • Not enough cash flow: When deciding whether to approve a small business loan, lenders will look at a company’s cash flow. The question is: Do you have enough money to cover your operational expenses, pay back your new business loan, and still have a cushion?If your cash flow is low or your industry experiences regular seasonal slumps, this could result in a denial of your business loan request.  Poor cash flow is a major reason for a business failure.

    There are several ways cash flow can be improved, starting with the use of accounting software to generate cash-flow reports and projections, and by being diligent about collecting payments due from customers in a timely manner.

    If you struggle with this issue, you may want to check out our blog for more tips on managing your business.

  • You’re not asking for enough money: Generally speaking, the larger a company’s business loan request is, the more likely it will get approval. Servicing a small business loan (under $100,000) is just as costly as servicing a large one. Many lenders feel small loans just aren’t worth it to them.  If your company’s small business loan request is rejected for this reason, review your financial projections and business plan to make sure you haven’t underestimated the amount of money you need. If you find you don’t really need more money, find an alternative business lender to obtain a micro-loan, an invoice-based option, or a small business line of credit.
  • Incomplete application/paperwork: It’s not uncommon for a business owner to spend 20 to 30 hours working on a business loan application gathering all requested supporting backup information. Among the backup information required by traditional lenders are: three to five years of business and personal tax returns, both a personal and business credit report, a business plan, financial statements, and legal documents (such as contracts, licenses/permits, and leases).Any busy business owner could find this daunting. If you don’t have 30 or so hours to devote to this process, or if you have received a business loan denial because you just couldn’t get all this paperwork together, there are alternative online business funding sources that can make your loan request simple and fast. There are even business loan programs out there that require very little paperwork.

Receiving a business loan rejection can lead to the worst feelings ever. But remember it’s not personal and you can always try again.

However, if you do get that business loan, it’s important to have carefully thought out plans for its use.


How To Leverage
Funding the
Right Way

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How To Leverage Business Funding the Right Way

Plan your business loan request carefully and use your funds wisely when you get them. You can accomplish this by:

  • Considering a plan to use your funds in the most strategic way
  • Asking questions; make sure you truly understand your responsibilities and requirements, as well as those of your loan provider
  • Remembering, the more prepared you are, the better
  • Thinking about holding back some of the money to make your first two or three payments
  • Building a good relationship with your lender–you may want to borrow again

The pursuit of a small business loan can be daunting, but with good plans and preparation — and the right lender — it can be a rewarding adventure that will help you be successful in growing your business.

United Capital Source Makes Getting Small Business Loans Fast & Easy!

At United Capital Source, we understand no two businesses or business owners are alike and that’s why we look at each scenario individually to ensure that our clients get the financing that fits with their businesses goals and needs. By looking at each business on an individual basis, we are able to approve many more small business loans than our competition.

As one of the largest financing marketplaces in the U.S., we can provide funding programs for business owners with bad credit history, newer businesses and those businesses that perform well but can’t show it with financial statements. Our small business loans can range from 6 months to 25 years! With our common sense process, we approve a large percentage of our business loan applications and are able to our clients significantly more capital. It only takes a few seconds to apply and less than 24hrs for approval. Apply Now!

How to Apply for Small Business Loans with United Capital Source


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FAQ

Can I get a business loan with bad personal credit?

At United Capital Source we know that your personal credit score does not tell the whole story. We understand that not all traditional lenders think this way though, so it’s common for people with low personal credit scores to be worried about securing a business loan. Luckily, we have business loans specifically for bad credit so that you can get the money to fund your business needs, as well as help you build your credit back up.

What credit score is needed for a business loan?

There is no defined rule for a minimum required score when it comes to business loans. That being said, every loan application is evaluated individually and there are numerous factors that are taken into consideration when approving or denying a potential borrower. Different loan types will have different requirements, but if you are concerned about a low personal credit score, at United Capital Source, we have loans designed specifically for that.

Does a business loan affect personal credit?

The potential impact a business loan can have on your personal credit is dependant on how the loan is set up. Any time a personal guarantee is required for either a loan or a business credit card, that means your personal credit will be tied in. This can be both a good and a bad thing – it could help you build your personal credit, but if something goes wrong and you default on the loan you, not your business, will be held personally liable. For this reason, many business owners prefer to keep their personal and business finances separate.

Is it hard to get a Bad Credit Business Loan?

Bad credit business loans are not as difficult to secure as you may think. With more and more alternative lenders on the scene, there are more funding options for people with low credit scores than ever before. These options will focus more on your business’s revenues and receivables, not just your credit score. If you are in need of a business loan but have a bad credit score, we still have many options you may easily qualify for.

Do I qualify for a Small Business Loan?

Every small business loan will likely have different qualification requirements. That being said, most lenders will take into account the same general qualifying factors. The three most common factors a lender will look at are personal credit score, annual revenue, and years in business. The higher your credit score, the higher your annual revenue, and the more years in business you have under your belt, the easier it will be to qualify for a small business loan.

What’s needed for a Small Business Loan?

When it’s time to apply for a small business loan, it’s understandable that you will want to be ready to go with all of the necessary information. That being said, each loan type and lender will have a different set of requirements. There are a few things however you can be fairly certain will be required on every application. These are: your personal and business credit scores, your annual revenue, your time in business, your business tax returns, your business bank statements, and what the purpose of this loan will be.

What’s needed to open a business bank account?

Having a business account is an important step for business owners as this will allow you to keep your personal and business funds separate. If you are well organized, opening a business checking, savings, or merchant account can be a smooth process. You should be prepared to supply at least the following: business license, SSN or EIN, personal identification, certificate of assumed name, organizing documents, partnership agreements, and monthly credit card revenue (if you are seeking a merchant account).

Can you start an LLC with bad credit?

Forming an LLC is generally a very straightforward process. It is a common way for small business owners to protect their personal assets, and separate their personal and business finances. If you currently have a low personal credit score, this will not hinder you from forming an LLC. However, even with the LLC, if you do not have a business credit score, you will need to use your personal credit score for opening new business accounts and applying for business loans. Luckily we have numerous options designed specifically for business owners with bad credit.

Do SBA loans require collateral?

SBA loan requirements will vary depending on your needs. Most of these loans will require a personal guarantee and/or collateral. The amount of collateral you will need to put up will vary depending on how strong the rest of your loan application is. If you are required to provide collateral, there are several options for you, including: land, buildings, real estate, machinery, equipment, accounts receivable, savings accounts, stocks, and bonds.

How much down payment is required for an SBA loan?

The down payment requirements for SBA loans will vary depending on the type of loan you are seeking. The most popular SBA loans (the SBA 7(a) and the CDC/504 loans) will require a down payment. Generally speaking, these loan programs need a down payment totaling 10% of the total loan amount. If you are seeking a different type of SBA loan, they do not usually require a down payment.

How do I qualify for a small business grant?

When looking for funding for your small business, you may come across some grants or “free” money (meaning these do not need to be paid back like loans). Each grant program will have a different set of qualifying requirements, but as a general rule of thumb, these grants are only given to specific types of businesses such as start-ups or companies that will serve the greater good of the community. This usually means non-profits, educational institutions, or companies that are providing scientific research or cutting edge technology. If your business falls into these categories, there are likely some grants that would be well worth your time to apply for.