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Qualifying for a loan?

We realize show difficult and tasking it is to find a lender that will provide the best loan for your business or personal use. 

Here are a few tips to help guide you to the best decision for your loan. 

Common mistakes when applying for a loan: 

  • Big effect for lenders are high usage of credit cards because business use them Vs. a loan. If possible reduce them before applying. 
  • Checking your FICO and SBSS score, banks and lenders look at FICO & generally want 600+, SBSS score which is the business credit score that SBA and banks will use. Low is 140, banks will not accept anything under 160, generally they line in the 190++ range.  
  • Is getting a loan and understanding what you really qualify for. Banks only approve about 10% of loans, general industry with alternative is around 40-60% approvals and have limited industries they serve. 
  • Finding a lender that matched your requirements and conditions, i.e.., startup, working capital etc. and being prepared with all the requirements and paperwork such as tax documents, personal financial statements, bank statements, etc. 
  • Cash flow on paybacks to the loans, lenders will match up your cash flow, bank deposits, credit card statements, too see what amount you can actually afford. 
  • Each time you apply for a loan and they turn you down then you have to start all over again. This really affects your credit score every time you apply. Lenders look at how many inquiries. when they see several they know you are shopping and have n=been turned down. 

What Lendingcapital provides: Our bQual report delivers your Small Business Credit Score (SBSS & FICO), your consumer credit score and full credit report, as well as a detailed fundability report assessing your financing prospects. And you may even be prequalified for a loan in real time. 

 About Us Clients nationwide turn to LendingCapital national funding platform with over 5000 lenders each year to identify the right funding options for their business projects and assistance in meeting their financing needs. 

LendingCapital’s bQual application provides business owners the tools and knowledge to understand their creditworthiness before applying for and committing to a loan. 

Use our bQual application and save time, energy, frustration, and Know the Score before you apply for a loan. 

https://lendingcapital.net  

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Perils and Pitfalls of getting a loan & growing your business

The perils and pitfalls of getting a loan…& growing your business

Being in business in today’s environment is difficult, especially the last few years. Money very tight, most businesses credit scores are at an all-time low.

Why?

High usage of credit cards because they can’t get a loan.

Business depending on what you do is way off thanks to a very weak market and demand as the consumer has limited funds themselves to purchase any extras over the last few years.

I have noticed a trend in lending the last year in particular where we see a small uptick to merchants looking for larger cash loans, the downside is what they have to pay for it…ouch

First problem is getting a loan. Banks only approve about 10% of loans, general industry with alternative is around 40-60% approvals and have limited industries they serve.

Second problem is most of the sub-prime (alternative market lenders) have run into trouble themselves. Can Capital, OnDeck, Bizfi and others went out of business, came back with investor cash injections, or someone buys the portfolio and services the debt. Problem is now they have all tightened up credit requirements, shortened the term cycle, and raised rates.

Third problem is the cash flow on paybacks to the loans. Almost all require daily or weekly ACH debits from your bank accounts, and terms are from 3 months to usually around 14 months tops and very high interest or factoring rates. Factoring rates range from 1.09 to as high as 1.49-you multiple the factor rate times your loan amount to get your payment.

This really disrupts the small merchant cash flow and they struggle to balance money to make sure they don’t miss a payment every day!

Fourth problem, most of the loans are brokered by another broker. So, you get many layers of fees, delays, lost paperwork, etc.

Fifth problem, when you apply to as an example an OnDeck, it is a single source supplier. If they turn you down then you have to start all over again. This really affects your credit score every time you apply.

Look for multiple loan offers from one source. You usually get the same group of short term, high rates, but at least it gives you an idea of what your options are without affecting your score each time.

NOW for my pitch (sorry you knew it was coming) but I think you will like it.

It really is time to re-evaluate the alternative lending market for small and mid-size businesses. I want to introduce you to two products that can change your business.

INTRODUCING: Next Generation Merchant Cash Loan:

    NO MORE: DAILY-WEEKJLY ACH-HIGH FACTORING RATES-SHORT TERM CASH ADVANCES

  • We do not have a restricted merchant list. From traditional retail stores to online and home-based businesses, Next-Financing can fund them all*. The business must be opened for 3+ months with an active business bank account and the owner must have a 500+ FICO.
  • We fund businesses up to 4x their gross monthly business income with loan sizes ranging from $3,500 to $75,000. We count all business income from credit card transactions, cash and check transactions.
  • Affordable Payments:Loan terms from 24 to 120 months make the monthly payment affordable. With fixed monthly ACH payments, borrowers no longer have to worry about daily re-payment schedules.  Annual Interest Rates from 14.9%.
  • No Pre-Payment Penalties:Businesses can pay off as soon as they’d like, allowing them to save on interest and renew faster.
  • Same Day Funding:Best of all, these loans can be funded same day.

CONSUMER Financing:

Why Financing?

It’s simple……More approvals, ease of use platform, low discount rates, one application, full reporting, analytics, etc.  we have multiple lending partners integrated into one platform, obtaining financing for customers with great credit to no credit has never been easier.

Seamless Technology Providing Seamless Approvals:

  • One fast, easy application for all borrowers
  • Instant approvals – 5 seconds or less
  • Approvals down to a 600-credit score
  • Funding within 24 hours
  • No monthly fees or minimums
  • No Set-up fees or application fees
  • No equipment to buy or lease
  • 100% paperless
  • Detailed reporting back office with analytics and customized to your business (User Access/Multi-location Management/logos/Colors/Customer Applications, etc.)
  • Works on any device
  • Customers can apply privately from their phone
  • Email our application for pre-approval before customer leaves their house
  • Extremely Competitive Discount Rates as low as 1%
  • We offer no interest (if paid in full) promotions for 6, 12, and 24 months.
  • Loan amounts currently range from $1,000 – $35,000. If you sell a product or service that costs under $1,000 or over $35,000 we’d encourage you to check back soon because we’re always adding new lenders to the platform
  • Businesses are funded directly via ACH within 48 hours
  • Business Owners have zero risk on customer defaults. If something happens and your customer can no longer pay their bill, it’s not your problem

Check out all our loan products & Read our Blog at https://lendingcapital.net

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The Business of Budgeting your Business

The Business of Budgeting your Business

A budget? So, who needs a budget? You do-that’s who.

Unlike the government we actually need to balance our checkbooks. A budget allows you to identify spending habits, and allows your business (or personal) to make necessary adjustments and changes.

       Don’t just be in business to stay in business-be in business to grow your business

There are many areas to delve into for a complete business plan, for practical purposes we will stick to budgeting and a few essentials.

Check list: All of this and more inside my 16-award winning book:

“the sexy little book of finance III” 2 books in one-Personal & Business

  • Your budget should be on a spreadsheet in excel or another format so you can update.
  • Personal budget and Business information should be part of your routine.
  • Make copies of all serial numbers of vehicles, laptops, cell phones, or any other important information of equipment.
  • Copies of any operators or employees who have access to any equipment, vehicles, should have their drivers license and insurance so you have the information and can check any expiration dates.
  • Credit card numbers, expiration dates, and all employees who assigned a card
  • Record of all policies or contracts
  • Starting inventory and ending inventories (daily, weekly, monthly, and annually) or as deemed appropriate for your business model
  • Bank loans, all financial information stored & backed up daily on a private server or encrypted cloud program
  • ADD your own categories.

You should have a full marketing plan (in writing), websites with SEO search, game plan how are you going to market your product or services – internet-seminars-mailers-email campaigns-workshops-etc. If you are looking for money from a bank or lending institution all this will be necessary. Everybody thinks they can apply and get approved in 15 seconds with 3 little questions and nothing else to provide…SORRY, little things like bank statements, tax returns, personal financial statements (free on our website) just to mention a few things. You can see what else may be required on our website.

Now back to budgeting…

 

Month _________________                          Beginning Cash Balance $ ___________________________

Category                                 Estimated Budget                        Actual                       Difference

Revenue/1099                         _______________                  _______________      _______________

Accounts Receivable               _______________                  _______________      _______________

Investment Income                 _______________                  _______________      _______________

Interest Income                       _______________                  _______________      _______________

Other                                       _______________                  _______________      _______________

Total Actual Income:              _______________                                                      _______________

EXPENSES

Rent/Lease                              _______________                  _______________      _______________

Loans                                       _______________                  _______________      _______________

Accounts Payable                    _______________                  _______________      _______________

Inventory Purchase                 _______________                  _______________      _______________

Equipment Purchases             _______________                  _______________      _______________

Office Supplies                        _______________                  _______________      _______________

Cell Phones                              _______________                  _______________      _______________

Phone/Internet/Fax                 _______________                  _______________      _______________

Advertising                              _______________                  _______________      _______________

Printing                                   _______________                  _______________      _______________

Postage                                   _______________                  _______________      _______________

Payroll                                     _______________                  _______________      _______________

Payroll Taxes                           _______________                  _______________      _______________

Health Insurance                     _______________                  _______________      _______________

Repairs/Maintenance             _______________                  _______________      _______________

Automobile Expense               _______________                  _______________      _______________

Gas/maintenance                   _______________                  _______________      _______________

Auto Insurance                        _______________                  _______________      _______________

Business Insurance                 _______________                  _______________      _______________

Accounting fees                      _______________                  _______________      _______________

Retirement contributions        _______________                  _______________      _______________

Web hosting                            _______________                  _______________      _______________

Other                                       _______________                  _______________      _______________

Total Actual Expenses $ _________________________

Total Income________________ minus Total Expenses______________ = Ending Balance_______________

Be Prepared-Be Informed-Be Successful

The last time I got instant gratification – I got food poisoning

https://lendingcapital.net

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You Have the Right to Bear bridge Loans…

The right to bear bridge loans…

What?

bridge loan is a type of short-term loan, typically taken out for a period of 2 weeks to 3 years pending the arrangement of larger or longer-term financing.

Bridge loans are interim financing (short term) for an individual or business until permanent financing obtained. Money from the new financing is generally used to “take out” (i.e. to pay back) the bridge loan, as well as other capital needs.

The problem for businesses in particular is the length of time it takes to obtain permanent financing like term loans, credit lines, mortgages and so on. Banks can take up to 6 months or longer to approve certain types of loans. That does not help anyone who needs to move quickly for cash. They generally turn to the secondary market-quick cash, factoring loans, etc. The cost of money there is very high and generally creates cash flow problems on paying back daily or weekly ACH payments from their bank accounts.

Bridge loans are typically more expensive than conventional financing, to compensate for the additional risk. Bridge loans typically have a higher interest rate, points, origination fees, and other costs that are amortized over a shorter period, and various fees and other “sweeteners” (such as equity participation by the lender in some loans)  the good news is they are typically arranged quickly with relatively little documentation or lower credit requirements, and longer term more effective financing for the business or individual.

Bridge loans are often used for commercial real estate purchases to quickly close on a property, retrieve real estate from foreclosure, or take advantage of a short-term opportunity in order to secure long-term financing. Bridge loans on a property are typically paid back when the property is sold, refinanced with a traditional lender, the borrower’s creditworthiness improves, the property is improved or completed, or there is a specific improvement or change that allows a permanent or subsequent round of mortgage financing to occur. The timing issue may arise from project phases with different cash needs and risk profiles as much as ability to secure funding.

A bridge loan is similar to and overlaps with a hard money loan. Both are non-standard loans obtained due to short-term or unusual circumstances. The difference is that hard money refers to the lending source, usually an individual, investment pool, or private company that is not a bank in the business of making high risk, high interest loans, whereas a bridge loan is a short-term loan that “bridges the gap” between longer term loans that can take 6 months or more to finalize.

Typical terms of up to 12 months 2–4 points or more may be charged plus origination fees- probably 2 points or more. A bridge loan may be closed, meaning it is available for a predetermined time frame, or open in that there is no fixed payoff date (although there may be a required payoff after a certain time). An average is around a total of 6 points (6%). Which is usually much less than factoring and other secondary market loans with lower interest rates.

A bridge loan is often obtained by developers to carry a project while permit approval is sought. Because there is no guarantee the project will happen, the loan might be at a high interest rate and from a specialized lending source that will accept the risk. Once the project is fully entitled, it becomes eligible for loans from more conventional sources that are at lower-interest, for a longer term, and in a greater amount. A construction loan would then be obtained to take out the bridge loan and fund completion of the project.

A consumer is purchasing a new residence and plans to make a down payment with the proceeds from the sale of a currently owned home. The currently owned home will not close until after the close of the new residence. A bridge loan allows the buyer to take equity out of the current home and use it as down payment on the new residence, with the expectation that the current home will close within a short time frame and the bridge loan will be repaid.

A bridging loan can be used by a business to ensure continued smooth operation during a time when for example one senior partner wishes to leave while another wishes to continue the business. The bridging loan could be made based on the value of the company premises allowing funds to be raised via other sources for example a management buy in.

A property may be offered at a discount if the purchaser can complete quickly with the discount offsetting the costs of the short-term bridging loan used to complete. In auction property purchases where the purchaser has only 14–28 days to complete long term lending such as a buy to let mortgage may not be viable in that time frame whereas a bridging loan would be.

Bridge loans have many advantages, the risk is generally on the lender. One big advantage even though the interest rate is higher for a bridge loan the payments are usually interest only and the payments are very low. Most will require up to 6 months interest in escrow in advance-but you won’t have payments for 6 months plus they give you an option of rolling in the fees into the loan or deducting from the proceeds.

An example of how it works:

You apply for a 5-15-year term fully amortized with reasonable rates (based on your credit worthiness) once the bridge loan is in place. It will take about 90-120 days or more to get that in place.

You might get an offer that looks like this: offer is 11% interest only for 12 months with a monthly payment of about $3,000. They’ll want 6 months of interest held by lender to apply to monthly payments (around $3k per month – so $18k total.  We can add it onto the loan for a $318k loan amount or they will fund $282k in proceeds out of the 300k.  You won’t have to make any payments for 6 months.)

Understanding your finances gives you the power to obtain the best terms, rates, and options available. Do your homework, check your credit and correct BEFORE you apply for a loan. Going to the bank directly is not a very good option for a business, almost 90% of all small business loans from banks are declined. That is why they make companies like ours-we find them for you – you will never find yourself.

Read our blog on all the good things you need to do to get a loan…Be informed

Frank

https://lendingcapital.net