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Thursday, July 21, 2016
Options for borrower with bad credit are, in general limited to 3 options - SBA commercial loans, commercial hard money and "story" lenders.
SBA commercial loans carry a lot of misperception by borrowers. The biggest and most important for you to know is that NOT all SBA lenders are the same. And more to the point, the SBA never actually loans any of its own money. They only guarantee banks that they will be paid back if the borrower defaults. So the point is that the banks make up most of the underwriting criteria. There is NO minimum credit score that the SBA mandates. For example we work with a bank out of New Jersey that will often fund SBA commercial loans with borrowers credit score in the low 500's.
Commercial hard money is probable the first thought for many when considering a commercial loan with a borrower that has bad credit. Most hard money commercial lenders are interested in the properties equity and or its cash flow and the borrower's credit score is often just an afterthought.
Commercial Hard money lenders want to see at least 40% equity in the property or a 60% loan to value in order for them to seriously consider funding the deal. Speed and flexibility with underwriting are the highlights of commercial hard money. The expense is the downside. Borrowers should expect to pay 3-6% points and have a rate around 13-16%.
"Story lenders" are banks that are willing to listen to the borrower's story about their difficult situation.
They are often willing to overlook many difficult situations such as bad credit, weak business cash flow, high loan to values, etc. Although there are few banks that would describe themselves as a story lender the borrower should look locally or work with professionals in the business that may know of a few banks that can get over their difficulties.
For example, we recently closed a loan that was in foreclosure by refinancing it with another bank that was more willing to listen to the borrower than their existing bank. Their situation was that their loan had ballooned and despite their best efforts they could not get their existing bank to refinance the loan or find another bank that would either. After a year of searching they couldn't get it done and their existing bank put more pressure on them by calling the "note" (forced foreclosure). We knew of a bank out of California that would be interested, provided the borrower refinance some of their unsecured business loans into the proposed loan to improve the borrowers over all cash flow.
So, borrowers with bad credit seeking commercial loans should be prepared for some "brain damage" as they will have to find a viable source after hearing many "no's".
Jeff Rauth is President of Commercial Finance Advisors, Inc out of Birmingham, Michigan. He has a STORE for commercial loan brokers. Contracts, spreadsheets, books, etc. Products starting at $4.95! Check it out commercial real estate loans or commercial mortgage broker store or commercial loan rates
Tuesday, July 19, 2016
Having found out the amount of startup business financing required, you will have to think of a way in which you can get a loan for your business.
o Start-up Financing is available to entrepreneurs whose business is based on a solid business model with a credit worthy structure. o Banks award business loans to those that have a well spelled out plan which showcases your partners, your track record, your strategies and advantages.
Banks are conservative where investments are concerned. The chances of getting a loan will be more for an existing business in comparison to a new one.
o No bank wants to lose money by taking risks. If your business proposes to be a risk, you'll have to work harder to get your small business loans approved
On the other hand, you will be able to acquire a startup business financing loan if you make a good loan request and have a good plan for your business. Help can be obtained from the SBA as well as the Small Business Development Centers can be obtained easily, as they are situated in most major cities in the United States. Your business plan must consist of your personal bank statements, sales and cash projection. If you are taking the help of the SBA then you will need to state how you will reimburse the startup business financing loan and you will also be required to guarantee the same. The bank might want to see your personal investment in the business apart from the time that you give to the business.
o Banks would want to know your business's financial prospects. They want to gauge its worth and how much money you're moving. o Alternative sources, (excluding banks) may want you to "pay" more for your start up business loan. o You may have to pay higher interest rates. You might also need to offer some equity in your business to receive funding
Ways in which you can get loans faster and easily
Financial assistance sometimes comes from institutions in the form of credit or loan. This loan can be obtained at a relatively short period of time and there are financial resources that will help you get the loan. Few of such startup business financing resources are:
- Credit cards: You can get a credit ceiling of twenty thousand dollars (for your small business) from big credit card companies if you have a good credit record. - Unsecured business loans: Try such a loan if you do not want to guarantee the loan personally or if you do not have a credit record. - Equipment leasing/financing: Many companies are willing to lend you the money taking equipment as collateral for your loan. - Asset based loan: is ideal for using equipment to acquire loan, account receivable or leveraging your stock.
o Those having a mortgage with a bank, find it easier to obtain small business loans. o Check newspapers for financing offers. Such institutes grant small business loans and processing might be easier with them. o Availing a start up business loan has become easier, thanks to a growth in competition among lenders. o Plenty of channels are available for raising capital. Most of the above avenues have abundant variations. Build up a solid business plan, along with a financial adviser, and just start asking.
Do not forget to check your financial requirements regularly and inform the investors about the financial position as well as the progress of the business on a regular basis.
Hi, I'm Akhil Shahani, a serial entrepreneur who wants to help you succeed. If you like to work smart, check out http://www.SmartEntrepreneur.net It's full of articles and resources to help you start and grow your business successfully. Please visit us & download our special "Freebie of The Month" at http://www.smartentrepreneur.net/freebie-of-the-month.html
Saturday, July 16, 2016
Successful entrepreneurs keep their overheads low and their productivity high. Minimize the amount of capital needed by keeping overheads low, productivity high, and ownership of capital assets to a minimum. Angel investors want all of their investment put directly into making the business grow in order to insure a high rate of return. Venture capital is only reserved for large scale businesses. Negative economic changes should be discussed in your business plan as it relates to working with a SBA lender, angel investor, or venture capital firm.
If you are seeking to purchase real estate, you may want to work with a private lender that can provide the capital that you need if you do not qualify for traditional mortgage or hard money financing. We will discuss the acquisition of real estate via a number of different financing means as we progresses through these series of articles. Real estate is usually one of the best investments that you can make as an entrepreneur if you are seeking to acquire owner occupied properties that will be used in conjunction with your operations. This is due to the fact that you will be able to generate a very high rate of return on the capital appreciation associated with your building or properties. The capital return related to any real estate investment should be clearly shown in all aspects of your business plan as this is a large appreciable tangible asset.
It is inadvisable for an entrepreneur to wait for the launch of a new business to become knowledgeable in that field. You should review all legislation that may impact your business when you are producing a business plan for an individual investor, SBA loan, or any other type of financing. For the best success, enlisting the help of a highly qualified business plan writing professional is always recommended. As we discussed before, is extremely important that you have a certified public accountant were covered in working with you when you're seeking capital from an outside funding sources.
Angel Investor List Download. No registration required! Includes Free Business Plan Template.
Matthew Deutsch is a prominent business plan writer. His work has been included in nine books pertaining to this subject. Additionally, Mr. Deutsch has written extensively on subjects regarding entrepreneurship, small business lending, angel investing, and other related topics.
Thursday, July 14, 2016
The company’s online funding application service allows U.S residents to apply for funding by answering a few questions and fulfilling some requirements, all of which can be done online.
Get Started Now at Click Here!
My Funding Status offers a variety of funding solutions for different needs:
• Unsecured Personal Credit Program (Revolving Accounts) – The Company’s most popular personal product. Used for a variety of personal and business needs. Typical clients receive between 4-8 different Lines of Credit with our different lending partners.
• Credit Based Funding – Personal and Business – Great for Start-ups and Real Estate Investors, $20,000 – $200,000+ in Funding, Funding based on the strength of Personal Credit, 680 scores or better, Equifax Only funding possible. Funding in 7-14 days. 0% interest on most revolving lines for the first 12-months.
• Fix and Flip Loans – Real Estate Professionals, open Line of Credit for investors doing 4-6 deals per year consistently. Up to 90% Loan to Purchase on Rehabs. Access to Hard Money lender network.
• Revenue Based Funding – Loans up to $800,000, NOT based off credit cards sales, Personal Credit is NOT a factor, Line of Credit Options possible. NO Personal Guarantee. Funding in 3-5 days. Minimum $10,000/mo deposits into a business bank account.
• Account Receivable and Purchase Order Funding – Factoring of A/R, Lines of credit based on existing A/R or Purchase Order contracts. Great for Health Care Professionals (Factoring of Medicaid, Medicare, Worker’s Comp, etc.). Great resources for International A/R funding. Government Contractor.
• Equipment Funding Startups okay. The application only lending possible based on personal credit and business history.
• Commercial and Multi-Family Real Estate Funding Purchase, Refinance and Development funding resources. Asset-based funding possible.
• Private Debt/Equity Funding – Will require Debt and Equity position from the capital resource. 10% reserve of funding amount required by the client.
To make it easier for their users, My Funding Status have also introduced to their website a quick questionnaire through which users are able to find the specific type of funding, either personal or business would match their needs. The six question long questionnaire has been created to allow startups, existing businesses, medical professionals, real estate investors and entrepreneurs to get funding option that would ultimately benefit their unique situation.
Visit us at Get Started!
If you are looking for angel investors then you may need a private placement memorandum even if you are seeking to purchase real property assets with the proceeds that you are seeking. The current economic climate has made lending very difficult for people that are involved with this particular industry. Syndicated investments are very important in the world of small business finance especially if you are seeking to acquire an owner occupied property or related asset.
Typically, only highly experienced entrepreneurs are able to raise large amounts of capital specifically for the purpose of acquiring income producing properties. Loans that are provided by angel investors typically are not typically used for real property purposes unless it is for a down payment for the specific parcel. On a side note, before you send any materials to a third-party, your attorney should review each and every document that you produce.
It is important to consult with your CPA as it pertains to funding methods especially for large scale purposes such as owner occupied properties or related real properties. Your certified public accountant will provide you with all of the necessary documentation as it relates to securing a parcel of property, the anticipated appreciate associated with the property, and an applicable loan amortization schedule if it is required by your real estate angel investor.
Additionally, you should always have a property appraiser on hand to ensure that your angel investor understands the value of the property that you are purchasing either for owner occupied usage or for income production. This documentation can be used for soliciting both equity capital as well as debt capital as it relates to your property business.
Angel Investor List Download. No registration required! Includes Free Business Plan Template.
Looking For Angel Investors is a website dedicated to people finding private investment.
Matthew Deutsch is a prominent business plan writer. His work has been included in nine books pertaining to this subject.
As economic cycles turn downward and banks tighten up credit, loans become hard to come by as was in my case during the global recession of 2008-2009. In these tough times, accounts receivable factoring companies are filling in the need by offering the capital businesses need to keep their doors open, and even to grow and expand.
Factoring has become a key alternative finance strategy for many small businesses today. In fact, many small businesses are now preferring factoring over applying for loans with banks and the small business administration (SBA), who often have a more rigorous and lengthy process.
It's also much quicker to access capital when factoring as opposed to the long and painful process of obtaining a loan. What are some of the more common ways companies are engaging in business accounts receivable factoring?
Trucking companies factor freight to cover wages and salaries for drivers. Staffing agencies factor their invoices so they can pay their head count / staff. In medical accounts receivable factoring, which is a very specialized niche, medical companies factor out receivables owed to them by insurance companies and even the government to fund their day to day needs (expenses) in the short term.
Businesses of all sizes are also pursuing accounts receivable factoring companies because these companies also often offer purchase order refinancing, working capital credit lines, growth or expansion funding, inventory financing and other types of asset based lending where businesses take a loan by pledging their physical assets.
Here are answers to three common questions that must be going through your mind right now: Why should you factor?
Simple. It is easier, faster and in many cases can be cheaper. Once you are accepted or have a relationship with a solid accounts receivable factoring company, you essentially have a revolving line of credit with them. Think about it, if a company factors your invoices once, chances are they will do it again, and again, and again. They win, and most importantly YOU win.
Here is the other thing. You no longer have to worry about who will process accounts receivables at your business. when you factor, you are essentially outsourcing the entire function. Let them worry about it while you worry about growing your business!
What size business can factor?
Any kind really. However factoring is most common with small to medium size businesses as large Corporates have their own alternative capital or funding sources. The answer is actually simpler than that. If you have receivables, you can for sure factor.
When should you consider business accounts receivable factoring?
Do you need cash to grow and expand your business? Do you need more funding to run your day to day operations? Who doesn't?
Are you having trouble or simply don't want to acquire a business or SBA loan? If you answered yes to any of these questions and you feel you are ready to take the next step in your business, then YOU SHOULD consider accounts receivable factoring.
Read more about receivable factoring on Curt Matsen, CPA's website here: http://www.accountsreceivablefactoringhq.com
Wednesday, July 13, 2016
It is no longer unusual to hear about start up and small business struggling with the finances of their ventures. More often than not, this does not stem from a lack of proper planning, and from profits that were never realized. There are simply times wherein business capital is no longer enough to cover for all the expenses needed to keep the business operating. And in times like such, business owners need reliable financial institutions that can offer them the working capital financing that they need. In this way, they will not have to waste a day of operations because they do not have money to spend.
Through working capital financing, business owners can have a good range of options when it comes to raising or increasing their business capital. They can select from options like applying for small business loans, making cash advances, credit card factoring, and opening business lines of credit. These are only some of the few financing options that business owners can resort to during those times when they need additional capital for their business.
Among these options, small business loans appear to remain as the most popular. However, it is not all too easy to qualify for a small business loan. A business must have a good credit history to qualify. And to most small business owners, having good credit ratings can be quite elusive. This is because building business credit requires time and time is something that most start up business owners do not have.
This leads most small business owners to consider other alternatives. A merchant or business cash advance is seen as an easier way of gaining additional business capital. So does business lines of credit and credit card factoring. These options do not require good credit scores. What matters more to these options is for small business owners to have good monthly sales volumes. The method of payment and repayment are also less burdensome. Payments and repayments do not come in fixed schedules. Instead, payments and repayments often come as a small percentage of the monthly sales that the business is able to generate.
You can learn more about these working capital financing options through financial firms near your area. You can also go online to learn more about them. Most financing firms already have online presence and these days, you no longer need to physically travel to the nearest financing office to apply for business capital financing options.
Tuesday, July 12, 2016
Generally, hard money comes from angel investors that want to lend against tangible property. The capital does not require that you give any equity to a third-party investor, but instead are hypothecating a piece of property with the risk that you might loss the asset if you do not make timely payments on your loan. As such, you should work closely with your certified public accountant or financial adviser to determine whether or not obtaining this very expensive form of capital is in your business' best interest. You may find that there are a number of alternatives, including potentially selling a portion of your business to an angel investor, that are less expensive then a high yield debt instrument.
One of the things that you will be required to have as you seeking this type of capital is a well written business plan that showcases the financial results of your business. This is extremely important, especially as it relates to the cash flow of your business, as you will need to show that you can repay the debt financing on a timely basis. On a side note, you should also showcase that you are able to afford the upfront fees that are normally associated with a hard money mortgage or similar debt instrument.
Your business plan and documentation package should also discuss the loan to value ratios that will be associated with the real estate purchase or equipment acquisition that you intend to undertake. A professional valuation provided by a third party expert may be required of you by the angel investor or capital brokerage that is working with you on this specific deal.
In regards to finding this type of investor, most mortgage brokerage and mortgage banking firms have extensive contacts among individuals that specifically provide this type of loan. As such, you may want to approach them first prior to finding a private funding source on your own.
In closing, using a hard money mortgage may be in your best interest if you have the requisite capital to support the very high interest and principal repayments. As always, you and your accountant should thoroughly evaluate this type of capital before making any decision.
Angel Investor List Download. No registration required! Includes Free Business Plan Template.
Looking For Angel Investors is a website dedicated to people finding private investment.
To be able to get the need amount of cash to fuel their business plans, businessmen often get a business loan. This can help jump-start their business from the drawing board to the real thing. A loan can provide you with your needed cash for you to start and operate your business. However, taking a loan from the bank and other lending firms will often require you to present your credit ratings. When this happens, people having bad credit history often find it hard, if not impossible to get an approval.
Although you may not have a great credit rating, you still have a chance of getting a business loan to get the cash that you need. This is by getting a bad credit business loan. This loan can allow you to have the money you need for your business without your credit rating being scrutinized. This is mostly offered by lending companies that you can find online. Through it, you can transform your dreams into a reality.
What are the types of loans that you can get with a bad credit loan?
There are two choices that you can have when trying to choose a loan type that is most suited for you. You can either get an unsecured loan or a secured one. Each can present different advantages and disadvantages.
Unsecured business loans are ones that does not require you to have collateral. This type of loan is more risky in the part of the lender. That is why it may not be easy to get an approval for this kind of loan. For lenders that offers unsecured bad credit business loans, being employed can be a big plus when trying to apply for one.
However, even if collateral is not needed and you don't face the risk of losing anything, there are still a few setbacks when applying for this loan. If you do get an approval, you will often need to face higher interest rates, because of the nature of the loan. Aside from that, the amount of money you can have with this kind of loan is lesser than what you can get with a secured business loan.
If you opt to get a secured business loan, you may easily get an approval even with bad credit. There are several lenders that offers bad credit secured business loans online. A secured loan requires that you put up your property as collateral. This allows the lender to have a fall back, in case you fail to make the necessary payments for your debt.
Although you are the one taking the risks with this kind of loan, it allows you to enjoy many benefits which can be beneficial for your business. Since lenders are secured that they can recover their losses even if you default your payment, you are able to enjoy much lower interest rates and is able to get a larger amount. You will also be given a better loan deal with a secured business loan.
Other than that, if you're confident that you can make payments on time, then the risks that you are facing with a secured business loan is quite small.
Willie Rhoades is a finance analyst who enjoys writing about UK loans and unsecured personal loans as well as other related topics.
Some investors have built up to 7-figure unsecured business line of credit.
In the following lines I'm going to give you the steps you can apply and build your own 6 to 7-figure unsecured business line of credit.
First, what is an unsecured business line of credit?
It's a business line of credit that is NOT attached to your investment and is not reported on your credit unless you default.
The lending institution basically gives you a checkbook and trust that you'll use it wisely.
Here are 7 steps you want to follow to succeed in building your Business Line of credit.
Step 1. You need to have a business
Sole proprietorship won't do. You need a Corporation or an LLC, two years preferred. You must have your EIN number. Here is a tip. You can purchase a shell of a two years old business close to nothing. You're instantly ready to apply for your business line of credit.
Step 2. You need to register the business with Dun and Bradstreet.
Dun and Bradstreet is the titan of business credit profile. They control 70 percent of the market share for business credit reporting. Go to http://www.dnb.com and select their premium package. You can call the number on the website.
Step 3. Have a Paydex number.
Just like your personal credit score, your business has a credit score called Paydex score. It is between 0 to 100 (0 been the lowest).
Step 4. No bankruptcy allowed
Although you're applying for an unsecured business line of credit, the lending institutions look at your credit. They expect you to have a score of 680+. Here is the good news in case you have a bad credit. Add a credit partner in your business and apply through him.
Step 5. Apply for your credit line
You're now ready to fill out your applications. Many lending institutions will give you up to $50,000 line. Over that number you need to provide two years tax return and your mother-in-law as a bonus package. There are exceptions. I got approved by Wells Fargo for $100,000 just over the telephone. My advice is to apply for 5 line of credit within 30 days. Here are some names of lending institutions you can apply with: Wells Fargo, Bank of America, Suntrust, Wachovia, WAMU, Bank one.
Jacques Coquerel is a real estate investor based in Atlanta, Georgia. He has made more than 750 transactions since 1996. You may visit one of his sites [http://www.reonline101.com] and receive a 13-part FREE ecourse on real estate investing.
One of the other ways that you can get a bad credit business loan is to work with a private lender. A private lender will look directly at your business rather that your personal credit history. However, and as we have mentioned before, the costs related to obtaining a private investor loan can be somewhat high. This is due to the fact that there is an additional level of risk for the lender. In these instances, you may want to provide a certain level of collateral security to your private investor. If you have a significant amount of tangible assets without a lien then you may be able to negotiate a much better interest rate with a private lender.
Finally, in almost all circumstances where you are seeking an unsecured bad credit business loan you are going to be required to have a business plan. Your business plans should be perfect, as again, you are seeking to obtain credit solely based on your business and not your previous credit history. Your business plan should have a detailed profit and loss statement, cash flow analysis, balance sheet, and a break down of how you intend to use the bad credit loan funds for your business. As always, we strongly recommend that you work with a certified public accountant as well as an attorney when you are reviewing documents related to a bad credit business loan as there may be clauses that you will need to adhere to at all times.
Small businesses can contribute immensely in developing and enhancing the nation's economy. The Small Business Administration (SBA), which is a United States government agency that provides loans to small businesses with the aim of improving the country's financial condition. These loans are meant to support the establishment of small businesses by providing through adequate financial assistance. These loans cannot be obtained directly from SBA, but through a number of their lending partners working in accordance with the SBA rules and regulations.
The SBA offers a wide variety of loans that demand different qualifications of the borrowers. The various financial programs offered by SBA such as surety bonds, debt financing and equity financing are designed to cater to the different financial requirements of borrowers. In order to avail a loan from them, it is extremely important to understand how the SBA works. Let us discuss some basic rules and regulations of the SBA:
•The SBA loans are provided to business owners at a lower interest rate than banks and other conventional lending sources owing to the fact that start-up business owners do not have adequate capital to opt for loans with high interest rates.
•SBA does not provide loans to small business owners directly. Instead, they merely set certain rules and regulations that are strictly followed by their partners, including private-sector lenders, micro-lending institutions and community development organizations, who are authorized by the SBA to provide loans to start-up businesses.
•The loans are provided to the business owners under an SBA guarantee to ensure that the loan is repaid on time to the lending partners. Business owners cannot avail SBA small business loans in case they have the eligibility to obtain loans from other lending sources on affordable and reasonable terms.
•You can obtain SBA loans fast and without any kind of hassles. They can be acquired on an immediate basis as soon as they are applied for. This can be immensely beneficial for start-up businesses that need financial assistance for all their business needs. Delay in acquiring loans can create problems for them in setting up the business.
•One of the most beneficial aspects of SBA loans is that they can be availed even if you have a poor credit record including bankruptcy, insolvency, IVA etc. It can be an excellent way to improve your credit records.
•SBA offers various kinds of loans, including 504 for purchasing real estate and equipment, 7 (a) for common small business loans, disaster loans and microloans. Not all banks issuing SBA loans offer the same loan programs. Moreover, in accordance with individual bank policies, the loan requirements for a particular program can differ from bank to bank.
The SBA rules and regulations for small business loans are designed to help start-up business owners and can be extremely beneficial for them.
Miner Capital Funding, LLC is a reputed finance company providing commercial real estate loans to their clients. One of the leading providers of SBA small business loans, Miner Capital specializes in providing conventional, bridge and SBA bank loans to innumerable clients in USA.