Tag: Loan

Get Your First Time Business Loan

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

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

What are All the Different Types of Business Loans?

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

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

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

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

Types of Small Business Loans

There are many more, including:

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

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

Get a First Time Business Loan with Securities-Based Financing

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

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

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

Get a First Time Business Loan with 401(k) Financing

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

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

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

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

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

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

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

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

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

Advantages

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

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

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

Get a First Time Business Loan Through SBA Loans

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

Eligibility for SBA Loans

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

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

More About Eligibility for SBA Loans

General eligibility also includes:

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

Ideal credit scores for an SBA loan are 680 or above. There are a number of SBA loan programs, each one designed to work for different needs and situations. Some of the most common SBA loan programs include:

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

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

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

Which SBA Loan is Best?

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

SBA 7 (a) Loan Program Details

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

Who Do SBA Loans Work Best For?

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

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

Get a First Time Business Loan with Equipment Financing

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

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

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

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

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

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

Get a First Time Business Loan: Takeaways

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

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

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

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

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

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

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

Why Is a PPP Loan Extension Needed?  

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

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

Other PPP Loan Changes

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

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

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

What Can You Do In the Meantime? 

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

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

Credit Line Hybrid

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

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

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

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

401(k) Financing 

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

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

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

Do You Qualify for a ROBS? 

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

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

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

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

Business Revenue Lending

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

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

Merchant Cash Advance

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

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

Account Receivable Financing

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

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

Enterprise SBA Loans

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

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

Use the Time Allowed By the PPP Loan Extension Wisely

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

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

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

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

What Else Can a Business Credit Expert Help With?

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

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

PPP Loan Extension: You Still Have Time

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

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

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

The post The PPP Loan Extension Offers the Gift of Time: Use it Wisely appeared first on Business Marketplace Product Reviews.

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

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

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

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

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

Why Is a PPP Loan Extension Needed?  

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

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

Other PPP Loan Changes

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

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

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

What Can You Do In the Meantime? 

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

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

Credit Line Hybrid

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

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

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

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

401(k) Financing 

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

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

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

Do You Qualify for a ROBS? 

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

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

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

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

Business Revenue Lending

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

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

Merchant Cash Advance

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

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

Account Receivable Financing

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

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

Enterprise SBA Loans

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

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

Use the Time Allowed By the PPP Loan Extension Wisely

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

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

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

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

What Else Can a Business Credit Expert Help With?

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

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

PPP Loan Extension: You Still Have Time

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

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

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

Commercial Loan for Real Estate Financing

What is a Commercial Loan for Real Estate Financing? 

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

What is a Commercial Loan for Real Estate All About? 

Commercial real estate loans are often made to business entities. 

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

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

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

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

What are Typical Commercial Loan Terms for Real Estate?

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

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

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

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

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

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

Learn business loan secrets and get money for your business.

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

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

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

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

What is Debt-Service Coverage Ratio? 

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

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

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

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

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

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

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

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

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

Learn business loan secrets and get money for your business.

What are Some Types of Commercial Real Estate Loans? 

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

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

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

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

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

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

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

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

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

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

Get Commercial Real Estate Financing for All Types of Buildings! 

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

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

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

Learn business loan secrets and get money for your business.

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

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

A Commercial Loan for Real Estate Financing: Takeaways

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

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

The post Commercial Loan for Real Estate Financing appeared first on Business Marketplace Product Reviews.

Commercial Loan for Real Estate Financing

What is a Commercial Loan for Real Estate Financing? 

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

What is a Commercial Loan for Real Estate All About? 

Commercial real estate loans are often made to business entities. 

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

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

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

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

What are Typical Commercial Loan Terms for Real Estate?

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

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

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

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

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

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

Learn business loan secrets and get money for your business.

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

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

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

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

What is Debt-Service Coverage Ratio? 

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

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

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

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

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

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

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

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

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

Learn business loan secrets and get money for your business.

What are Some Types of Commercial Real Estate Loans? 

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

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

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

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

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

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

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

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

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

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

Get Commercial Real Estate Financing for All Types of Buildings! 

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

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

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

Learn business loan secrets and get money for your business.

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

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

A Commercial Loan for Real Estate Financing: Takeaways

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

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

How to Get a Business Loan with Bad Credit

Can you get a business loan with bad credit? If you already own a business, it’s a little easier. For starting a business, it’s a little more difficult.  You don’t have all the options you may have if your business is already established. For example, you do not have receivables to finance or credit card purchases to use to get a merchant cash advance.  That does not mean there are no options however. 

Can You Get A Business Loan with Bad Credit to Start a Business? 

There are options for starting a business, even if you have no money and less than stellar credit. Some of the options are loan options, and some of them are something different all together. You can get a business loan with bad credit, but it will not come without a cost. 

Collateral

Most of the options for a business loan with bad credit are going to require collateral. Here are some of those options. 

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

SBA Loans

There are many SBA loan programs.  For starting a business, the 7(a) program seems to be the most useful.  As the Small Business Administration’s flagship loan program, it offers federally funded term loans up to $5 million. You can use the funds for a number of things, including  expansion, purchasing equipment, working capital, and even starting a business.  Banks, credit unions, and other specialized institutions in partnership with the SBA process these loans and disburse the funds.

The minimum credit score to qualify is 620, and there is also a required down payment of at least 10% for the purchase of a business, commercial real estate, or equipment. The minimum time in business is 2 years. In the case of startups, business experience equivalent to two years will suffice. Here’s the kicker. You have to have collateral worth up to 50% of the loan to get approval with the minimum credit score.

The 7(a) is by far the most popular of the SBA loan programs, and the funds are available for a broad range of projects, from working capital to refinancing debt, and even buying a new business or real estate.

401K Loan

If you have a 401K, you can take a loan from it to fund a business.  You will be paying it back with interest, but the interest is being paid to yourself.  Yet, there is an even better option than this for 401K financing to start a business. 

The IRS calls it a Rollover for Business Startup (ROBS).  Why is it better than a 401K loan?  First of all, not all plans allow for loans.  If your plan does, the IRS will only let you borrow up to 50%, up to $50,000, before you have to start paying taxes.

Also, with a 401k loan, you would be paying interest.  That isn’t terrible, as you are paying interest to yourself. However, you will be making monthly payments, whereas with the 401K Rollover for Working Capital, there is no payment.

This is a unique program. It allows you to tap into your existing retirement account without penalties or taxable distributions. You also avoid loans, banks, or credit checks. There is no debt and no monthly payment. 

The lender will ask for a copy of your two most recent 401(k) statements. If the plan has a value of more than $35,000,  you can get approval. This is true even if you have really bad personal credit. You can get however much of your 401(k) is “rollable.” 

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

This type of funding can also help you build business credit

Guarantor

If you do not have collateral and you have bad credit, you are probably going to need a guarantor.  You can use a guarantor to get most types of loans.  One great option is the Credit Line Hybrid. 

A partner, friend, or family member with good credit can work as a guarantor.

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

Credit Line Hybrid 

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

If you don’t have a guarantor, you have to have a minimum credit score of 680.  In addition, you can’t have any liens, judgments, bankruptcies or late payments.  Furthermore, in the past 6 months you should have fewer than 5 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards.  It’s also preferred that you have established business credit as well as personal credit. 

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

The best part however, is that these accounts help build business credit as well. 

You can use the cash you get from the Credit Line Hybrid to fund a down payment on an SBA loan if needed. 

What If You Do Not Have Collateral or a Guarantor? 

What if you cannot get a business loan with bad credit? Maybe you don’t have collateral or a guarantor? There are a few other possibilities.  You can work with a crowdfunding crowdfunding company. The problem with crowdfunding is that, despite some companies finding success, success is the exception rather than the rule. 

Angel investors are an option as well.  These informal investors are often family or friends, but not always.  

Another option is alternative lenders.  These are non-bank lenders that will sometimes offer loans to businesses with lower minimum credit scores.  They do look at other factors, like time in business and income.  In fact, most of the time you have to be in business for at least 6 months. 

That makes it hard, though not impossible, to get funding from alternative lenders to start a business.

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

You Need a Plan, and Business Credit

Ok so, you need to figure out how to get the funding to start.  Explore all your options, including  finding a guarantor, collateral, or tapping into your 401K.  Often the best idea is to combine two or more funding sources to get things rolling.  Still, however you start, begin building your business credit profile from the start. 

Your business credit profile is similar to your personal credit profile, except that is solely for your business.  It includes your business credit score, which is a way that lenders can determine how likely your business is to repay its debt, apart from you the owner. 

The thing about a business credit score is, you have to be intentional about establishing and building it. The first step is setting your business up properly to be fundable from the start.  Then, you can work on getting accounts that will report to your business credit profile and help you build your score. 

Once you have a strong business credit score, it will be much easier to get a business loan with bad credit, because your personal credit will not be the only thing lenders consider.  Don’t ignore it, because it can still affect things.  However, it will no longer be the sole ruler of your financial future. Find out more today at CreditSuite.com.

The post How to Get a Business Loan with Bad Credit appeared first on Credit Suite.

Can I Use a 401K Loan To Fund a Business?

You can use a 401K loan to fund a business. But, just because you can doesn’t mean you should.  It appears to be a fabulous option.  Your payments will just be going back into your account, and any interest will be paid to yourself. In reality, it is a good idea, until you realize there is an even better way.  

Should You Take Out a 401K Loan For Business Purposes? 

When it comes to using a retirement plan to fund a business, a 401K loan isn’t the only option. Technically a distribution could work too, but that’s not wise. More about that later.  There is actually another option that many do not know about. 

Unlock the Mystery of the 401K for Working Capital Program

It’s not so much of a mystery as it is widely unknown.  This Credit Suite program offers a flexible and powerful way for a new or existing business or franchise  to leverage assets that are in a 401(k) plan or IRA. These are assets which are tied up in stocks. 

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

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

Will it Cause More Tax Issues Than a 401K Loan? 

No it will not.  According to the IRS, a ROBS qualified plan is a separate entity. It has its own set of requirements. The plan technically owns the business, not the individual. That means some filing exceptions for individuals might not apply to the plan. That said, always check with a tax expert when it comes to tax matters.

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

Do You Qualify for a ROBS? 

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

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

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

Benefits of a ROBS

The benefits of this option are many.  First, you can get 24-hour pre approval. Also, you pay no penalties for the rollover. Plus, you pay no application fees.

You can get approval even with bad credit, and the time from application to funding is 3 weeks or less. A big bonus is this type of funding will report to the business credit reporting agencies. That means you build business credit!

How Does it Work? 

It sounds kind of crazy but it works. Credit Suite business credit experts will help every step of the way.  First, we’ll help you set up a 401(k) plan in your company.  Then, you’ll invest your 401(k) funds in it. Your business then has cash, but no debt. Despite how complicated it sounds, It’s all super easy and fast on your end. We handle the hard stuff.

Also, with our program, you will get more than just the financing.  You will work with a CPA that will help you roll over a non-contributing and qualifying account. By doing this, you can cash out half, or $50,000, whichever is lower.

If applicable, they will  also structure a self-directing IRA for the rest of the fund. You will get 5 years of management and consulting services for your business.

The Question of Terms

The cost is 1% and the term is 5 years. There is a $4995  lender fee.  Remember, this includes 5 years worth of management and consulting.

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

Why Can’t I Just Take a Distribution to Fund My Business with My Retirement?

Unless you are 59 ½ years old, there is an early withdrawal penalty of 10%. If you think about it, you would be paying a lot to use your own money. Don’t do that.

ROBS vs. a 401K Loan?

First of all, not all plans allow for loans.  If your plan does, the IRS will only let you borrow up to 50%, up to $50,000, before you have to start paying taxes.

Also, you would be paying interest.  That isn’t terrible, as you are paying interest to yourself. However, you will be making monthly payments, whereas with the 401K Rollover for Working Capital, there is no payment.   

This is a unique program. It allows you to tap into your existing retirement account without penalties or taxable distributions. You also avoid loans, banks, or credit checks. There is no debt and no monthly payment. 

What if You Need More Than You Can Get with This Type of Financing? 

Whether you decide on a 401K loan or you go the ROBS route, you may find you still need more.  It’s not uncommon to need other funding options to bridge the gaps between how much is available from your 401(k) and how much you actually need. 

One great option that compliments 401K financing well is the Credit Line Hybrid. You can get up to $150,000 in unsecured business financing. Similar to a 401K loan and the 401K for Working Capital program, you do not have to turn in a lot of documents.  In fact, this is considered “no-doc” financing. 

You do need to have a 680 or above credit score. However, if you do not meet this or other requirements, you can take on a credit partner that does. Many business owners piggy back off the good credit of a friend or family member until they improve their own. 

What makes this an especially good compliment to 401K financing, is that it also reports to the business credit reporting agencies. This just speeds up the rate at which you build your business credit score

Business Credit Score

Even though neither a 401K loan or the 401K for Working Capital Program require good credit, it’s important to understand this one thing. The 401(k) for Working Capital Program does help you build a strong business credit score.  It isn’t easy to find accounts that report your business credit report. 

Credit Suite works with business owners every day that are struggling with this.  Most account holders do not make it clear whether they do this or not.  We work with those that we know do, and this program is one of the easiest ways to get another account reporting. 

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

Do not underestimate this benefit of the 401(k) financing program and the Credit Line Hybrid.  It is something that should be considered when making a financing decision.  Your business credit report can make a difference in whether you are able to get funding from another source in the future. 

Funding a Business With a 401K Loan

If your retirement fund allows for loans, and you have enough available in your account, then the answer is yes. You absolutely can. However, there is another, better option, for using your retirement account to fund your business.  Contact Credit Suite today to get started.

The post Can I Use a 401K Loan To Fund a Business? appeared first on Credit Suite.

How to Recognize Predatory Practices in Business Loan Companies, and How to Get Help

The world of business loan companies is full of predatory lenders.  If you are desperate for business funding, it can be easy to take the bait and fall into their trap. You need to know how to tell predators from legit creditors, especially if you need to veer away from traditional financing.  You may think you know what to look for, but there are some predatory secrets that a lot of business owners are not privy to. 

How to Avoid Predatory Lenders When Looking for Business Loan Companies

It can be helpful to work with a business credit expert. Not only can they steer you toward responsible lenders, but they can also help you choose the type of funding that will work best for your needs.  A good one will help you build business credit at the same time.

Still, you need to know the signs of a predatory lender for yourself.  If you do not, you will not even be able to tell if you are working with a good business credit expert, or not.  

Signs of a Predatory Lender

Can you tell the difference between legit creditors and predatory lenders? 

According to Investopedia:

“Predatory lending benefits the lender and ignores or hinders the borrower’s ability to repay a debt. These lending tactics often try to take advantage of a borrower’s lack of understanding concerning loans, terms, or financial literacy.”

Predatory lending when it comes to business loans is becoming an increasingly prevalent problem

How do you keep yourself from wading off into shark infested waters?

business loan companies Credit Suite

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

Avoid Business Loan Companies That Focus on Monthly Payment Rather Than Actual Loan Amount

They may insist on one large payment at the end of the term with only interest payments being made each month until that point. This is known as a balloon payment. In business lending, this can be useful if you are waiting on large sums of money at the end of the contract to repay the loan, so it isn’t necessarily a deal breaker. However, you do need to know that your payments are only paying interest and not reducing principal.

Recognize if this is really the type of loan that you need. Lenders should always be willing to disclose your total loan amount and terms. You should not have to beg for this or search for it. Lenders that focus only on the payment may be sketchy.

There are many things they can do to make a monthly payment lower, like extending the loan period, adding a large payment at the end (a balloon payment), or making adjustments to loan terms. All of these things can make your monthly payments look low, while in reality you are getting stuck with a bad loan. 

Note that while a balloon payment should be an automatic deal breaker, insistence on a balloon payment is an extra red flag. 

Good Business Loan Companies Will Not Add Unnecessary Extras Without Your Knowledge

Another common practice of predatory lenders is adding extras onto the loan. These are usually things the borrower does not need. Furthermore, the borrower will not even know they are there. The most common “extra” seems to be insurance products that do not offer any benefit.

Business Loan Companies and Confessions of Judgement

New York plays a unique role in the world of predatory lending. Understanding this can help you understand if you are about to become the prey. It all comes down to a confession of judgement. If a borrower signs a confession of judgement, they are basically agreeing to lose in a court battle if there is a dispute about repayment.  Many cash-advance companies, which make up a large faction of predatory lenders, have their borrowers sign one of these.

New York state law is friendly to this type of contract. Regardless of where a loan takes place, it may include a “New York confession of judgement.” 

This could also mean you are agreeing that any lawsuits will be handled in New York state. That could greatly increase expenses if you do not live near there.  If you see one of these in your loan documents, do not sign it.  It is of no benefit to you. It only benefits the lender.

business loan companies Credit Suite

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

Don’t Accept Punishment for Early Payment

Prepayment penalties should definitely be a red flag.  Early payment is good, period.  Even though the lender may lose some interest, they should not be too opposed to early repayment. By itself, it should not be the reason you do not take a loan. But it should make you continue with caution and look for other red flags. 

Good Business Loan Companies Do Not Have to Seek the Weak 

Business loan companies that specifically seek out underserved populations, such as minorities and immigrants, and those with bad credit should be considered carefully. This may include contacting business owners that fit into these types of categories directly, or targeting them with marketing campaigns designed for them specifically.  If the focus is meant to make them think they are getting a great deal because they are in an underserved market, it could be sketchy.  While there are programs designed to help serve underserved populations, if something seems too good to be true, it likely is.

In fact, those that fall into these categories are more likely than others to fall prey, according to a 2015 Center for Responsible Lending Report.

A Good Business Loan Company Will Not Start With a Bad Deal

Some predatory lenders will try to earn trust by admitting they are offering a bad deal, then promising to fix it in the future. They claim they will allow for a refinance that will be a better option. Don’t fall for it. A bad deal is a bad deal.  Just walk away. 

Loan Flipping is a Classic Move for Predatory Business Loan Companies

This  is not the same as house flipping. Flipping a house can be very profitable. Loan flipping is actually a classic predatory lending tactic. When a predatory lender sees that you are struggling, they will offer a refinance. However, you end up paying points and fees again.  As a result, before it is over, you end up owing more than your original loan. Sometimes you may end up owing even more than your collateral is worth. It is a vicious cycle, and it can bury you quickly.

business loan companies Credit Suite

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

The Responsible Business Lending Coalition

This is a network of nonprofit and for-profit lenders, investors, and small business advocates. They have a common commitment to innovation in the small business lending industry. They also have serious concerns about the increase of irresponsible small business lending. 

In 2015 they drafted the Small Business Owners Bill of Rights.  When searching for a small business lender, look for those that have signed this.  There are many members of the Small Business Lending Coalition.

Here are a few examples: 

What is the Easiest Way to Avoid Predatory Business Loan Companies? 

Look for help when you can find it. Working with a company that specializes in helping small businesses find the funds they need can help you avoid predatory lenders. For example, Credit Suite works only with reputable lenders. With our Credit Line Hybrid and many other products, we connect businesses with lenders that we know to be safe to work with.  Not only that, but we help you assess your fundablity at the same time, and work with you to figure out how to best fill in your business’s fundability weaknesses. If business credit is an issue, we can help you build that too!  The time to take action is now, before you look for business loan companies. Don’t take the chance of falling prey.

The post How to Recognize Predatory Practices in Business Loan Companies, and How to Get Help appeared first on Credit Suite.

5 Ways to Get a Business Loan to Buy a Business

Getting a loan to buy and existing business is a somewhat different animal than getting a regular business loan.  There are plenty of options, but it can take some careful consideration and research to figure out which option will work best for you.  What’s your best option for a business loan to buy a business? 

How to Get a Business Loan to Buy a Business Regardless of Credit

It’s also important to know that, even if your credit isn’t the best, you can still get a business loan to buy a business.  It may not be the traditional term loan you probably expect, but you can most likely still get the fund you need. Sometimes, it takes combining a couple of options to get the best funding for your specific needs. 

Business Loan to Buy a Business: Traditional Loans

Traditional loans are a decent first stop when you are trying to figure out how to get a loan to buy a business. If you have good personal credit, you’ll have no problem here.  Furthermore, if your credit is good, you will get the best interest rates and loan terms from a traditional loan. 

business loan to buy a business Credit Suite

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

Collateral-based Loans

These are loans that are secured by some asset that you own.  Rates are lower, and your personal credit doesn’t have as much of an impact. The bank is taking on less risk due to the fact they can take possession of the asset if you default.  The business you are purchasing can be used as collateral for the loan. However, there are other, outside of the box options, that you can use if needed.  We’ll talk about this more later. 

Guarantor Loans

Here’s another idea if you do not have or want to use assets as security for a loan, but your personal credit score isn’t quite up to par. Ask a friend or family member who has these kinds of assets or a good credit score. They may let you leverage their asset in exchange for a percent of your business. They usually want less of a percent of your company than a venture capitalist would.  

If you are going to get help from friends and family to buy a business, asking them to sign on as a guarantor may be a better option than borrowing from them directly.  That can cause a lot of drama. 

SBA Loans

Qualified borrowers may be eligible for SBA loans.  These are loans guaranteed by the federal government. Yet, funds are distributed through banks. The application process is more involved. However, interest rates are often better.  Typically, minimum credit score requirements are lower than what banks would offer without the government guarantee as well. 

7(a) Loans 

This program offers federally funded term loans up to $5 million. Banks, credit unions, and other specialized institutions, in partnership with the SBA, process these loans and disburse the funds. 

The minimum credit score to qualify is 680.  There is also a required down payment of at least 10% for the purchase of a business, commercial real estate, or equipment. The minimum time in business is 2 years. In the case of startups, business experience equivalent to two years will suffice. 

504 Loans

These loans are also available up to $5 million.  Terms range from 10 to 20 years. Funding can take from 30 to 90 days. They require a minimum credit score of 680.  The asset you are financing is the collateral for the loan. In addition, there is a down payment requirement of 10%.  This can increase to 15% for a new business. 

There is also a 2 years in business requirement, or management must have equivalent experience if the business is a startup.

business loan to buy a business Credit Suite

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

Business Loan to Buy a Business: Alternative Lenders

Alternative lenders are lenders that are not traditional banks or credit unions.  These are typically private or peer-to-peer lenders that operate online, though not all operate online. They work better than banks for some because they will usually use other information besides credit score.  As a result, they will often approve loans to borrowers with a lower minimum credit score if they meet other criteria. 

These other criteria could include annual revenue, time in business, average balance in business bank account, and more. 

One popular online lender that works well for funding to buy a business is Lending Club. You can get a quote in less than 5 minutes, and funds are available in as little as 48 hours if approved. There are no prepayment penalties. Loans go up to $300,000 and you need a minimum credit score of 620.  Of course, details like this change frequently, so be sure to check with any lender directly for the most up-to-date information on rates and fees. 

Lending Club is only one option. There are many out there, but you have to be careful.  There are some great lenders, but there are also some predatory lenders in this industry. It can be hard to tell the difference. To ensure you are working with a reputable lender, consider working with a business credit expert. They can help you find the best lender with the best products for your needs. They can also help you figure out what you can improve to get the best rates and terms possible.  This may include building business credit, or improving fundability some other way. 

Business Loan to Buy a Business: Rollover for Business Startups

This is a form of collateralized business loan to buy a business that uses your existing 401(k) or IRA.  This program uses IRS proven strategies. You will pay no tax penalties, and you still earn interest on your 401(k). Rates are low, and this option usually has a quick closing and funding process as well. 

Credit Suite offers excellent options for this type of 401(k) financing.  You can get up to  100% of current retirement

account value that’s “rollable” from a previous employer.  Terms can be up to 5 years, and rates as low as 5.25% (Prime + 2) + $1995 rolled in lender fee. 

There are no credit requirements. If bad credit is blocking you from getting the funding you need to buy a business, this is your chance. 

For the retirement account to qualify, you must no longer be contributing, no longer be employed by the issuing company, and you must have a minimum of $35,000 in the account. Typically all that is required is a copy of the retirement account statement. 

Business Loan to Buy a Business: Seller Financing

If you have trouble getting all the funding you need to purchase a business,  you may be able to get help from the seller. Some sellers are willing to help buyers by bridging the gap with seller financing. Sometimes a seller will sell a business solely on seller financing.  

Typically in these transactions, you pay at least one-third of the sale price up front. Then, the buyer makes payments for the rest directly to the seller, plus interest.  Sometimes, a bank may be willing to lend this lesser amount, the amount of the down payment only, when they will not lend the entire selling price.  

The reason for this is twofold. First, the lower amount means less risk for the bank.  However, banks also see that if a seller is willing to finance, then they have faith that the business will continue to produce a profit into the future.  This is seen as a positive. 

business loan to buy a business Credit Suite

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

Using the Credit Line Hybrid to Help Fund a Business Purchase

That said, here is another option to get funding to buy a business.  The Credit Line Hybrid offers no-doc, unsecured business financing.  You can get  up to $150,000.  In some circumstances,  interest rates can be as low 0% for a limited amount of time. This can be used as some or all of the down payment required for an SBA loan or  seller financing.  The interest rate could be substantially lower than using a bank loan.  Furthermore, you can take on a credit partner.  This is helpful  if you do not meet the 680 minimum credit score or some of the other requirements.   Even better, the Credit Line Hybrid reports to the business credit reporting agencies. That means you build business credit and fund your business purchase at the same time. A business credit expert can walk you through the process

Business Loan to Buy a Business: Heloc and HEL

Borrowers who have a minimum credit score of at least 620 and at least 20% equity in their home can usually get a home equity  loan (HEL) or home equity line of credit (HELOC). You can use funds from this type of loan to buy a business, but your house will be on the line.  If you have the option of 401(k) financing or seller financing combined with the Credit Line Hybrid, that may be better.  

You Can Get a Business Loan to Buy a Business Even With Bad Credit

If  you  have great credit you probably are not worried about how to get a business loan to buy a business. However, if your credit is less than desirable, you have probably been wondering how you could ever make it work.  The fact is, there are options, and Credit Suite can help.

The post 5 Ways to Get a Business Loan to Buy a Business appeared first on Credit Suite.

5 Reasons Why You May Need an Online Business Loan

These days you can find anything online. In fact, you can even find an online business loan.  Some business owners shy away from this option because of the fear of predatory lending. It is possible to find online lenders that will work for your business though. 

Is an Online Business Loan for You?

So, is an online business loan right for you and your business? Here are five ways to know. 

  1. You do not qualify for a loan from a traditional lender, like a bank or a credit union. 

          Online lenders tend to have less strict application requirements, including lower credit score minimums. 

      2. There is no time to wait. 

           You need funds quickly. Online lenders typically fund much faster than traditional lenders. 

      3. You flexible terms

          Online business loans often have more flexibility repayment options. 

     4. You have invoices or accept credit card payments.  

           Online lenders often offer invoice financing and merchant cash advance options. 

     5. It’s impossible for you to wade through the paperwork necessary for a traditional loan. 

           Online lenders usually have super fast application processes. Most of the time you can apply online for a business loan in just a few minutes. 

online business loan Credit Suite

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

Where Can I get a Business Loan Online? 

There is no shortage of options for online lenders out there.  However, you must be careful to choose the best one for you. It is extremely helpful to have a business credit expert help you.  Still, here are a few to help get you started on your search. 

Remember, details for an individual online business loan or lender,  such as interest rates, fees, and credit score requirements, can change frequently. Always check with the lender directly for the most up to date information. 

BlueVine 

BlueVine offers funding up to $100,000. Annual revenue must be $120,000 or more and the borrower must be in business for at least 6 months. Your personal credit score has to be 600 or above. It is important to note also that BlueVine does not offer funding in all states.  

Upstart

Upstart is an online lender that uses a completely innovative platform for loans.  The company chooses to use a combination of artificial intelligence (AI) and machine learning to gather alternative data instead of relying solely on credit score.  They then use this alternative data to help make credit decisions.

It can include such mobile phone bills, rent, deposits, withdrawals, and even other information less directly tied to finances.  The software learns and improves on its own. You can use their online quote tool to play with different amounts and terms to see the various interest rate possibilities.  

To be eligible for a loan with Upstart, you must meet the following qualifications per their website:

  • Credit score of 620+
  • No bankruptcies or negative public records
  • No delinquent accounts
  • Meet debt to income standards (they only note they will check this ratio, not what their standards are.)
  • Have fewer than 6 inquiries in the past 6 months on your credit report, not including those related to student loans, vehicle loans, or mortgages

online business loan Credit Suite

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

Fundbox

Fundbox is a great option because there is no minimum credit score requirement for their line of credit product.  

 They offer an automated process that is super-fast. Repayments are automatic, meaning they draft them electronically, and they occur on a weekly basis.  One thing to remember is that you could have a repayment as high as 5 to 7% of the amount you have drawn currently, as the repayment period is comparatively short.  This means you need to be sure you have enough funds in whatever account you connect them to so that it can cover your payment each week. 

Fora Financial 

Founded in 2008 by college roommates, Fora Financial now funds over a million in working capital around the United States. There is no minimum credit score, and there is an early repayment discount if you qualify. 

 The business must be at least 6 months in operation and the monthly revenue has to be $12,000 or more. There can be no open bankruptcies. 

Bond Street

Offering term loans of up to $1 million, Bond Street will ask for both EIN and SSN.

Their offer arrives within 3 days. They will only do a soft credit pull, and a 640 or better credit score is likely to get you a loan.  However, they will look at other factors too.  For example, they require 2 years in business and annual revenue of at least $200,000.

Lending Club

Lending Club offers term loans. Business loans go up to $300,000. You can get a quote in less than 5 minutes. Funds are available in as little as 48 hours if approved. There are no prepayment penalties.

Annual Revenue must be $75,000 or more. You must be in business for 2 years or more. Personal FICO score of 620 or better is required.

Rapid Advance

Rapid Advance offers standard, select, and preferred loans. Your company must have annual revenue of $120,000 or more. You must have a personal FICO Score of 580 or better. The minimum time in business is 2 years. 

Kiva 

Kiva is an online lender that is a little different. For example, the interest rate is 0%, so even though you have to pay it back it is absolutely free money. They don’t even check your credit. However, there is one catch.  You have to get at least 5 family members or friends to throw some money in the pot as well. In addition, you have to pitch in a $25 loan to another business on the platform. 

OnDeck 

Obtaining financing from OnDeck is quick and easy. First, you apply online and receive your decision once application processing is complete. If you receive approval, your loan funds will go directly to your bank account. 

You need a personal credit score of 600 or more.  Also, you must be in business for at least one year. Annual revenue must be at or exceed $100,000. In addition, there can be no bankruptcy on file in the past 2 years and no unresolved liens or judgements. 

online business loan Credit Suite

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

Accion 

If your personal credit is okay, Accion may be a good fit. It is a microlender, a nonprofit, that offers installment loans to both startups and already existing businesses. The minimum credit score is 575. In some places they will go as low as 500. You don’t have to already be in business, but if you are not, you must have less than $500 in past due debt. In addition, your business needs to be home or incubator based. 

 Credibly 

Credibly is also a good option for business loans if you are already generating some revenue. They offer short term loans for both working capital and expansion. You must be in business for at least 6 months to qualify, and they will approve loans to those with credit scores as low as 500. 

Do You Need an Online Business Loan? 

You might.  If you fall under any or all of these 5 reasons, an online loan may very well work for you. Business funding is a difficult landscape, and there are many more options than most realize. Consider these options, do your research, and don’t be afraid to ask a business credit expert for help.  It could very well propel your business to new heights. 

The post 5 Reasons Why You May Need an Online Business Loan appeared first on Credit Suite.