Small Business Lending
What Your Bank Will NEVER Tell You About Business Lending … Get Insider Knowledge Right Here …
Does your business need a loan?
The business lending world can be complex but we can help guide you in the right direction! Find the best options out there for your business. There might be options you’ve never heard of.
How to Establish Business Credit
Step 1 – Build Your Fundability Foundation™
Step 2 – Incorporate Your Business
Step 3 – Get All Identification Numbers
Step 4 – Get Set Up With the Business Credit Reporting Bureaus
Step 5 – Keep Business Details Congruent Everywhere
Step 6 – Apply for Starter Credit
Step 7 – Monitor Your Credit Regularly
Different Types of Trade Credit
What is Business Credit Used For?
How do I Build Business Credit Fast?
The Business Credit Builder
Business Credit With and Without a Personal Guarantee
Business Credit Benefits
Frequently Asked Questions
Compare Types of Business Lending
Types of | Good for | Required | Fundability Factors |
|---|---|---|---|
Credit Line Hybrid | New businesses that don’t have any docs or have low revenue | Good personal credit is necessary (yours or a guarantor's) | Personal Credit History |
Account Receivable Financing | Businesses which have ongoing receivables to leverage | Bad credit is okay | Foundation |
Business Revenue Financing | Businesses which | Bad credit is okay | Business Financials |
Merchant Cash Advance | Businesses processing significant numbers of credit cards | Bad credit is okay | Financials |
401(k) | Startup business owners and entrepreneurs with retirement assets | Bad credit is okay | Financials |
Book of Business | Insurance entrepreneurs looking to leverage their business assets for financing | Bad credit in the 500s is okay | Application Process |
SBA Loans | Businesses looking to finance new projects, expansion, real estate, and more | Good credit is necessary | Business Financials |
Equipment financing | Businesses that want or need new or upgraded equipment for daily operations | Average credit in the 600s is okay | Business Financials |
Commercial real estate financing | Businesses which own or are looking to buy commercial real estate | Average credit in the 600s is okay | Foundation |
House reseller financing | Businesses looking to rehab and flip houses with $30,000 or more in liquidity and no other assets | Average credit in the 600s is okay | Personal Credit History |
Inventory financing | Businesses looking to leverage existing inventory valued at $500,000 or more and no other collateral | Bad credit is okay | Business Financials |
Term loans | Companies with longer time in business, looking for longer term financing at better rates | Good credit is necessary | Application submission |
Securities-based lines of credit | Businesses where the owners have stocks and bonds and no other collateral | Bad credit is okay | Financials |
What is Business Lending
Business lending is borrowed capital offered by lenders to businesses. In exchange for this money, lenders require repayment of principal plus interest and fees. Often, these require the borrower to make regular payments on a set schedule. But repayment terms and interest rates can vary depending on the type of lending, the lender, and the borrower’s Fundability.
Businesses can apply this capital toward expenses they are unable to pay for themselves. Or, they can use it for expansion, to make payroll, to buy out a competitor, or for any other business purpose the ownership can think of.
Traditional Lending
With traditional lending (also called conventional lending), a chartered bank lends directly to businesses and/or individuals.
Fintech & Alternative Lending
More and more business lending is being done through FIntech or alternative lending sources.. Fintech often uses AI (artificial intelligence) to get documents electronically and quickly evaluate those documents and other data to make fast approval decisions. Often these FinTech companies are backed by industrial banks.
How to Qualify for Small Business Loans
Understanding small business lending qualifications means putting yourself in a small business lending company’s shoes. What are they really trying to find out from you before they lend you money?
1
To make sure you CAN pay them back, and
2
To make sure you WILL pay them back.
Proving You Have the Ability to Pay a Loan Back
Lenders will gauge your ability to pay back a loan by assessing what you can offer them that will prove that. In general, they are looking for any or all of the three “C’s”:
Collateral
Cash Flow
Collateral
The three “C’s” are basic qualification factors, determining if you can get financing at all. But your Fundability Factors will be reviewed to determine details such as amounts, terms, and rates.
What is Fundability™ and Why You Need it
Whether you will get a business loan is directly linked to what’s called Fundability™. This is the ability of a business to get funding, and it includes everything from how your business is set up to how your company’s tax returns are prepared. The more Fundable your business is, the more likely it is you will get an approval. Greater Fundability also helps businesses get more money at better terms.
Which Loans are Best for Small Businesses
The best loans for your small business will depend on several factors. First, there is the question of how you can prove you will pay the loan back. Whether that’s through good business or personal credit, cash flow, or collateral—or some combination of these methods—will help to define what kinds of business loans a small business can qualify for.
For Businesses Where the Owner (or a Guarantor) Has Good Personal Credit
Our Credit Line Hybrid program works for entrepreneurs who are just starting their business as well as those who are already well established. Get credit cards, with approval for up to $150,000 in 0%, unsecured, no-doc, business financing with no collateral or cash flow requirements. This program helps you get funding based heavily on personal credit quality. As long as you can verify your business, lenders won’t ask for financials, bank statements, business plans, resumes, or any of the other document that most conventional lenders demand. Get approval with introductory rates as low as 0% for 6 – 18 months.
You can also use business credit to help you qualify. Some of these credit cards will also help build business credit as you use them.
Approval Amount | Credit Quality | Collateral | Financials |
|---|---|---|---|
Up To $150,000 | Good | None Required | None Required |
For Businesses With Good, Provable Cash Flow
Account Receivable Financing
Many businesses wait weeks, even months to get paid on their outstanding account receivables. This often creates major cash flow issues as they provide goods and services and absorb those costs until they eventually get paid, sometimes 90 days later. With our account receivable financing you can regularly secure money against receivables in as little as 24 hours. Get rates under 2% and financing up to $20,000,000 even if your personal credit scores are under 500.
Approval Amount | Credit Quality | Collateral | Financials |
|---|---|---|---|
$10,000-$20 million | Bad Credit Accepted | Account Receivables | None Required |
Business Revenue Financing
Get financing of as much as $500,000 within 72 hours based on a simple review of your business bank statements. With business revenue financing, lenders will not ask for financials, business plans, resumes, or any of the other burdensome document requests that most conventional lenders demand.
Approval Amount | Credit Quality | Collateral | Financials |
|---|---|---|---|
Up to $500,000 | Bad Credit Accepted | None Required | 3-5 Months of business bank statements Financials |
Merchant Advance and Merchant Card Credit
Our merchant financing program works well for business owners who accept credit cards and are looking for fast and easy business financing. Get approval for financing with no collateral requirements and bad credit. Get funding based strictly on cash flow as verifiable per your business bank statements. Our lenders will not ask for financials, business plans, resumes, or any of the other burdensome document requests that most conventional lenders demand.
Approval Amount | Credit Quality | Collateral | Financials |
|---|---|---|---|
Loan amounts and qualifications | Bad Credit Accepted | None Required | 3 Months of Bank Statements |
Purchase Order Financing
Sometimes you might have large orders to fill but don’t have or want to use your cash flow to pay for the supplies needed to fulfill those orders. Our purchase order financing is a short term finance option providing capital so you can pay suppliers upfront so your company doesn’t have to deplete cash reserves.It allows companies to grow without increased bank debt or selling equity. It also helps you increase market share by ensuring timely deliveries are made to your customers. Our areas of expertise include production finance for work in process and Letters of Credit for trade finance. This includes import and export transactions as well as domestic trade purchases.
Approval Amount | Credit Quality | Collateral | Financials |
|---|---|---|---|
Up to $20,000 | Bad Credit Accepted | Purchase Orders | None Required |
Purchase Order Financing
Your business can qualify for more types of financing, at better rates and with better terms
A business credit file showing a history of paying on time can help lower your business insurance premiums
Using business credit can lower your personal credit utilization which can raise your personal credit scores and even make your business more Fundable
Many vendors and trade accounts don’t require a personal guarantee so if you’re working on your personal credit you can build business credit at the same time
Using business credit to run your business, buy supplies, buy inventory, etc. can be done with net 30, 55, 60 terms or on revolving terms which allows you to get what you need now and pay later.
Surprisingly having an established business credit profile can impact the value of your business. As you build business credit it can be easier to grow and a less risky business is more valuable!
Frequently Asked Questions
A business credit bureau is an agency that collects and researches data on businesses and sells it for a fee to lenders and credit issuers to make lending decisions. It may also be called a commercial business credit reporting agency, or a corporate credit bureau.
A business credit history is the number of trade payment experiences which are reported on business credit reports. This includes payment terms.
Establishing business tradelines is the act of applying to and using accounts that report to the business credit bureaus.
These are reports produced by business credit bureaus highlighting a business foundation, and reporting business credit history, scores and ratings. These reports are compiled to help lenders and business owners access risk.
A business credit profile is all the information included on all your business credit reports including all your business tradelines, business information, and business credit scores. Building your business credit profile means to improve accuracy and accumulate positive experiences and information which present your business in a favorable light.
A personal guarantee is an individual’s legal promise to repay credit issued to a business where they are an owner, executive, or a partner.
With business credit agreements, giving a personal guarantee essentially makes you a co-signer on the business credit account. You will remain liable for any debts the business incurs. You have given a “personal guarantee” that you will be responsible for the debt.
In practice, this means that your personal credit will undergo a hard inquiry, since you are putting your Social Security number on the credit application. With enough hard inquiries, your personal credit score will be adversely affected.
A trade vendor is a vendor that issues trade credit, and trades product or services.
Trade credit is issued by vendors to businesses for the purchase of goods or services.
A vendor account is an account issued to a business with a vendor. It is sometimes reported to the business credit bureaus. The term trade account is common, but it is more accurate to call this account a vendor account.
Business tradelines are vendor accounts reported by the vendor to a business credit bureau. This information is included in a specific location in a business credit report.