Financing Archives

Farm Equipment Financing: Loans, USDA Programs and Costs

October 15, 2026 by Maria Khatiashvili

Tractor chiseling soil in a farm field in Southwest Michigan.

A tractor that breaks down before planting can’t always wait until harvest to be replaced. Farm equipment financing lets you buy the machinery you need and pay for it over time, while keeping cash available for the season ahead. Farm equipment loans, dealer plans, leases, Farm Credit and USDA programs offer several ways to pay.

The right choice depends on what you’re buying, how long you’ll use it and when your farm gets paid. Here’s how the main programs compare, where USDA and SBA financing can fit, and what the numbers look like on a $100,000 purchase.

Why farms use equipment financing

If your tractor is spending more time in the shop, another repair bill may only buy a little time. A planter that’s too small for your acreage can leave you racing the weather. And without enough cooling or storage capacity, you may have to sell sooner than you’d like. Financing gives you a way to address those problems without paying the entire equipment bill at once.

Start with the work the machine will do. How many acres will it cover? How many hours will you use it? What are you spending on repairs, hired labor or custom work now? Those numbers help you decide whether a replacement will earn its keep.

Three reasons farms finance equipment: preserve operating cash, prepare for busy seasons and invest in productive capacity. — Keep the equipment purchase in the same budget as seed, feed, fuel and payroll.

For a machine you’ll only use a few days a year, renting or hiring a custom operator may cost less. Iowa State University Extension’s guide to acquiring farm machinery services walks through those choices. For a closer look at loans and leases, see our equipment financing guide.

Farm equipment financing programs compared

Have a machine in mind before you start comparing lenders. A new tractor from a dealer and an older combine from a neighbor can qualify for very different terms. The lender will want the model, age, hours, seller and price.

Option	When to consider it	What to check
Equipment loan or equipment finance agreement	Buying machinery the farm expects to keep	Down payment, collateral, personal guarantee, term and early-payoff rules
Dealer or manufacturer financing	Purchasing an eligible machine through a dealer	Financed price versus cash price, lost rebates, promotional conditions and final payment
Equipment lease	Using machinery with a defined replacement or return plan	Hour limits, wear charges, maintenance, purchase option and return costs
Bank, credit union or Farm Credit equipment loan	Comparing an agricultural lender’s terms and farm cash-flow approach	Eligible assets, seasonal schedules, existing liens and required financial records
USDA FSA operating loan	Eligible farm equipment and operating needs	Direct versus guaranteed lending, farm eligibility and repayment capacity
Equipment refinancing or sale-leaseback	Reviewing an existing equipment obligation or accessing equity	Payoff, appraisal, fees, ownership changes and total new repayment

Farm equipment loans and dealer financing

With an equipment loan, you generally own the machine while the lender holds a lien on it. An equipment finance agreement works much the same way. Check which assets secure the debt, especially if your operating lender already has a lien on the farm’s equipment.

Ask the dealer for both the cash price and the financed price. A low promotional rate may mean giving up a rebate, and a shorter repayment term can push up the payment. Find out whether the loan includes attachments, delivery, installation and taxes so you know how much cash you’ll need at closing.

Tractor financing for new and used farm machinery

Start with the work the tractor needs to do. A compact tractor for feeding livestock has a different job from a larger machine used for fieldwork. Get a quote that lists the tractor, loader and other attachments separately. Ask which items the lender will finance together and whether delivery is included.

For a new tractor, compare the dealer’s financing plan with an agricultural lender’s offer. For a used machine, gather its hours and service records and budget for repairs it may need before the next season. The used farm equipment checklist below covers what to collect before applying.

Farm equipment leasing

Leasing can make sense if you replace machinery regularly or want to use it for a set number of years. Read the end-of-lease terms closely. You might have a fixed buyout, an option to buy at market value, or a requirement to return the machine. That difference matters when you compare payments.

Hour limits and return charges deserve a close look on farm machinery. Find out who covers repairs, insurance and transport, too. Iowa State’s farm machinery leasing guide has a useful list of questions to take to the lessor.

Farm Credit and local agricultural lenders

An agricultural lender may be more familiar with the gap between paying for inputs and getting paid for a crop. The Farm Credit System’s cooperative lenders offer agricultural equipment financing, and many local banks and credit unions have farm lending teams. You can find a nearby association through the Farm Credit lender locator. Farm Credit and USDA are separate sources of financing.

Refinancing and sale-leasebacks

If you already own equipment, refinancing may let you replace its current loan with different terms. A sale-leaseback works differently: you sell the machine to a financing company, receive cash and lease it back to keep using it. Compare the cash you’d receive after paying off liens and fees, then look at the full repayment and any final buyout. A lower monthly payment can cost more over a longer term.

USDA loans that can help finance farm equipment

USDA’s Farm Service Agency offers both equipment and operating credit. You can apply to FSA for a direct loan or work with a participating lender on an FSA-guaranteed loan.

FSA Direct and Guaranteed Operating Loans

FSA Farm Operating Loans can fund machinery and equipment as well as eligible farm operating expenses. FSA lists a $400,000 maximum for Direct Operating Loans. Equipment repayment terms depend on purpose and ability to repay and can extend up to seven years. Guaranteed limits are adjusted, so confirm the current ceiling with the participating lender.

For a direct loan, FSA reviews your farm plan, finances and ability to repay. It also considers whether you can obtain suitable credit elsewhere. Bring your records to the local FSA office and explain how the equipment fits into the operation.

FSA Operating Microloans

If you’re financing a smaller purchase, the FSA Operating Microloan is worth a look. It offers up to $50,000 for equipment and other eligible operating needs, making it relevant to smaller farms, new operators and specialty growers. Your loan officer can explain how your experience and any existing FSA debt affect the application.

Farm Storage Facility Loans

A grain storage or produce-handling project may fit the Farm Storage Facility Loan program. It covers eligible storage facilities and handling equipment for commodities you produce. For a tractor purchase, look at the operating-loan programs instead.

FSA lists limits of $500,000 for storage facilities and $100,000 for storage and handling trucks, with terms ranging from three to 12 years. Its storage microloan category has different down-payment and documentation provisions. Confirm that your commodity, proposed equipment and project timing qualify before ordering.

Farm Ownership Loans and beginning-farmer assistance

Farm Ownership Loans address purchasing or enlarging farms and eligible real-estate improvements. Separate the land purchase from the movable-equipment budget so each expense is considered under the appropriate program. Beginning farmers can ask FSA about targeted assistance and which loan structure fits their operating history.

SBA loans and other programs available to farms

Where SBA 7(a) and 504 financing may fit

SBA financing is worth discussing with a lender, particularly if your business includes processing or agricultural services. A production farm and a farm-related business can face different eligibility rules, so describe what the business does and exactly how you’d spend the loan. For production needs, compare USDA options as well.

For qualifying businesses, SBA 7(a) loans can cover machinery, equipment installation and working capital. The maximum loan amount is $5 million, subject to eligibility and underwriting. Read our SBA loan overview for the general application process.

SBA 504 financing supports eligible major fixed-asset projects. Machinery must have at least 10 years of remaining useful life. The program cannot fund working capital or inventory. A Certified Development Company and participating lender can determine whether a proposed facility or equipment project fits. Use our SBA loan calculator for an initial payment estimate after confirming the appropriate structure and terms.

USDA Rural Energy for America Program

If you’re planning an energy upgrade, look into USDA’s Rural Energy for America Program, or REAP. It provides grants and loan guarantees for eligible energy systems and efficiency improvements.

The rules recently changed. USDA’s October 2, 2026 REAP announcement describes new requirements, including having projects built, operating and demonstrating performance before applying under the revised rules. Application dates will be announced in annual notices. Your State Energy Coordinator can explain which rules and deadlines apply to your project.

NRCS conservation assistance and state programs

The Environmental Quality Incentives Program, or EQIP, offers financial and technical assistance for approved conservation practices. Payments depend on the approved practice and contract. Do not assume it will reimburse a general equipment purchase. Discuss the practice, schedule and approval requirements with NRCS before starting work.

Your state agriculture department or local Extension office may know of additional beginning-farmer loans and cost-share programs. For seasonal expenses, you can also compare an agricultural operating line with a business line of credit from a provider that finances farms.

Farm equipment financing rates and a payment example

Farm equipment financing rates vary with your credit, the farm’s finances, the machine, the down payment and the repayment term. To make the comparison useful, give each lender the same purchase price, loan amount and preferred schedule.

FSA’s published interest-rate table lists 5.375% for Direct Operating Loans and Operating Microloans, effective October 1, 2026. Check the table for the latest rate when you’re ready to apply.

Put the fees and total repayment beside the interest rate when you compare quotes. Also ask what you’d owe if you paid the loan off early. If an offer uses a factor rate, our APR and factor-rate guide explains how to compare the cost.

Illustration: financing a $100,000 equipment purchase

Say you’re buying a $100,000 tractor and putting $20,000 down. Here’s what an $80,000 loan would cost over five years at a fixed 8% annual interest rate, with monthly payments. This example leaves out fees, taxes and insurance and assumes no balloon payment.

Equipment price	$100,000
Down payment	$20,000
Amount financed	$80,000
Monthly payment	About $1,622
Total interest over 60 months	About $17,327
Total down payment plus loan payments	About $117,327

Illustrative $100,000 equipment purchase: a $20,000 down payment leaves $80,000 financed and retains $80,000 upfront compared with paying cash. — Putting $20,000 down leaves $80,000 available for other farm expenses at the time of purchase.

Use the equipment financing calculator to estimate monthly payments with your own purchase price and down payment. Add fuel, maintenance, insurance and repairs to your budget, too. If you need annual or seasonal payments, ask the lender to work out that schedule.

Seasonal payments for farm equipment loans

If most of your income arrives after harvest, monthly equipment payments can be awkward. Some agricultural lenders offer annual, semiannual or other seasonal schedules. Ask whether the due dates can follow your expected receipts, how interest builds between payments and when the first payment comes due.

Map out the year month by month, including inputs, repairs, existing debt and household withdrawals. Then try the budget with a lower crop price or a delayed buyer payment. You’ll see how much breathing room you have before signing for another machine.

Farm cash-flow planning sequence: forecast expenses, protect input cash, allow for delayed harvest receipts and request payment dates aligned with receipts. — Plan payment dates around when crop or livestock sales actually reach your bank account.

Iowa State Extension’s cash-flow budgeting guidance explains how to account for the down payment and ongoing loan payments. Our guide to positive cash flow can help you think through the rest of the budget.

An operating line and an equipment loan do different jobs. The line can cover inputs as you need them; the equipment loan spreads a specific purchase over several years. Our revolving versus installment credit guide explains the difference. The line-of-credit calculator can help you budget interest on seasonal borrowing.

Used farm equipment financing and credit requirements

A used tractor or combine can cost less upfront, but the price tag only tells part of the story. Lenders may limit the age or hours they’ll accept. Before buying privately or bidding at auction, check what the lender needs and how quickly the seller expects payment.

Green farm tractor with a mower attachment parked on grass. — Photo by Heber Davis on Unsplash.

Used tractor financing: hours, repairs and seller records

Gather the machine’s details: make, model, year, serial number, hours, attachments and purchase price.
Check the condition: have a mechanic inspect the machine and price any repairs it needs before the next season.
Check ownership and liens: confirm who owns the machine and how any existing equipment loan will be paid off.
Confirm useful life: consider whether the machine can reliably work through the repayment period.
Budget delivery and setup: include transport, installation, compatibility and operator training where relevant.

Can you get farm equipment financing with bad credit?

A lower credit score can mean fewer lenders to choose from or a larger down payment. Your farm’s cash flow, existing debt, experience and the machine’s value also matter. Be ready to explain past credit problems and show how the payments fit your farm’s budget.

Buying equipment when you’re new to farming

For a new farm, show how you worked out your production and sales estimates. Include your farming experience, the work the machine will do and the cash you’ll have left after the down payment. Ask your local FSA office whether beginning-farmer assistance or an operating microloan fits your plans.

How to apply for farm equipment financing

Get a written quote. Ask the seller to list the machine, attachments, price and delivery date.
Gather your financial records. Have your tax returns, bank statements, current income and expense records, a balance sheet and debt schedule. Review our business loan documentation guide as a starting checklist.
Explain repayment. Provide a seasonal cash-flow forecast and show how the equipment improves the operation. Include existing loan payments.
Compare suitable programs. Request commercial and agricultural offers, and contact FSA where relevant. Have an SBA lender assess eligibility before spending time on an SBA application.
Compare complete written terms. Review cash due, payment dates, fees, collateral, guarantees, balloon or buyout amounts, and early-payoff provisions.
Coordinate closing. Confirm insurance, seller payment, lien releases and delivery. An initial approval does not mean the seller has been paid.

Farm equipment financing FAQs

What equipment can a farm finance?

Depending on the lender and program, you may be able to finance tractors, combines, planters, balers, loaders and irrigation equipment. Give the lender the details of the machine you want to buy. Grain storage and produce-handling projects may fit programs designed for those purchases.

How long can you finance a tractor or other farm equipment?

The lender will consider the type of loan and how much useful life the machine has left. Ask for quotes on the terms available for your tractor. Compare total interest as well as the payment, especially if you expect major repairs before the loan is paid off.

Can you finance equipment bought at auction?

Yes, some lenders finance auction purchases. Talk to the lender before bidding so you know what paperwork it needs and whether it can meet the auction’s payment deadline. Confirm that it will accept the machine you plan to buy.

Can a new farmer get equipment financing?

A new farmer may qualify through a commercial lender or a USDA program. Expect to discuss your farming experience, farm plan, repayment budget and down payment. Ask what records the lender accepts when you don’t yet have several years of farm income.

Are USDA farm equipment loans grants?

No. FSA equipment loans must be repaid. REAP grants and NRCS assistance cover specific energy or conservation projects, with their own requirements. Check whether your planned purchase qualifies before including that money in your budget.

Is buying better than leasing?

Compare the same equipment over the same period, including fees, repairs, resale value, buyout costs and return requirements. Ownership may suit long-term use, while a lease may suit a defined replacement cycle. The payment alone does not settle the comparison.

Where can I find farm equipment financing near me?

Start with agricultural banks and credit unions, a Farm Credit association, equipment dealers and your local USDA Service Center. Ask each provider about the machine you want to buy and whether its payment schedule can fit your farm’s income.

Plan the equipment purchase before choosing the loan

Bring your equipment quote, repair budget and expected payment dates to the lender. A useful offer should tell you how much cash you need upfront, when each payment is due and what you’ll pay in total.

Explore Excel Capital’s equipment financing options with your equipment quote and preferred payment schedule in hand. If a USDA program looks like a better fit, your local FSA office can help you get started.

Dealer Floor Plan Financing: Rates, Fees and Calculator

October 17, 2026October 8, 2026 by Nathan Abadi

Excel Capital Management dealer floor plan financing banner with dealership vehicles, a calculator, and the text Rates, Fees & Calculator.

Written by Nathan Abadi, Founder and CEO of Excel Capital Management
Sources checked October 7, 2026 · Updated October 8, 2026

Dealer floor plan financing helps a dealership purchase vehicles for resale while keeping more cash available for the rest of the business. The useful comparison is the total cost of stocking a vehicle, how long you expect to hold it, and when each payment becomes due.

Use the calculator below to test an inventory purchase, then compare the published rates, fees and restrictions of ten floor plan providers. Ask Excel which inventory programs are currently available for your established dealership. The lender’s written offer determines approval, pricing and final terms.

Planning for payroll, reconditioning, equipment or a broader cash need? Our car dealership business loans and funding guide explains term loans, merchant cash advances, unsecured loans and how inventory financing fits alongside them.

Use the floor plan calculator Compare rates and fees

How dealer floor plan financing works

A floor plan is a revolving inventory line. A lender advances money against vehicles stocked for resale. When a vehicle sells, its advance is repaid under the agreement, making credit available for another purchase. Kinetic’s floorplanning overview explains this inventory-financing model.

Purchase inventory: confirm that the vehicle and purchase source qualify, then record the advance and applicable fees.
Hold and prepare the vehicle: allow for reconditioning and operating costs alongside financing charges. Scheduled principal reductions may become due before a sale.
Sell and settle the advance: check the agreement’s payoff timing and the amount due, including accrued interest and fees.
Plan the next purchase: consider both the credit available to reuse and the cash the dealership needs to keep operating.

A curtailment is a required principal reduction. It takes cash out of the business and reduces the remaining balance. A separately charged curtailment or extension fee is a financing charge. Ask a provider to identify each amount clearly.

Floor plan financing calculator

Change the amount financed, interest rate, holding period and fees to see your costs. Add sale proceeds and other vehicle costs to see the effect on cash flow.

Change the numbers to update the example.

The interactive calculator requires JavaScript. The original worked example is available below.

Floor plan financing and sale assumptions

Amount financed ($)

Annual simple interest rate (%)

Days held before sale

Flooring fee ($)

Administration fee ($)

How it affects your cash flow

Add the sale proceeds and other costs for the same vehicle or inventory batch. Exclude sales tax and other amounts collected for others.

Expected sale proceeds ($)

Other vehicle costs ($)

Other costs can include reconditioning, transport, insurance and allocated operating costs. Exclude the inventory purchase price, interest, and the two fees already entered.

Illustration only. The advance covers the full inventory purchase price; fees and other costs are paid upfront; principal and all interest are paid at sale. Uses a 365-day year with no compounding, curtailments, interim payments, taxes or unlisted charges. Net after listed costs is not total dealership profit.

Compare a faster or slower sale

Days held	Financing cost	Net after listed costs

Only the holding period changes. Sale proceeds and entered fees stay the same. Any additional extension charges or vehicle markdowns need to be added separately.

See the original $20,000 illustration

Use an expected sale date, then test a slower sale. This hypothetical example uses a $20,000 advance, 12% annual simple interest, 60 days outstanding and a 365-day year. The fees are illustrative. It is not a lender quote.

Illustrative floor plan: $20,000 at 12% annual simple interest for 60 days costs $394.52 interest and $594.52 including two example fees. — Illustrative financing cost, with principal payoff shown separately. These are example terms, not a lender quote.

Example item	Amount
Interest: $20,000 × 12% × 60 ÷ 365	$394.52
Illustrative flooring fee	$150.00
Illustrative administration fee	$50.00
Total financing charges	$594.52

The $20,000 principal is separate. A curtailment reduces that principal; it is not another financing fee. It still takes cash out before the car sells. Reconditioning, transportation, insurance and any markdown also affect the vehicle’s profit.

Floor plan rates and fees: what lenders publish

Public information reviewed for this guide on October 7, 2026. Most providers require a quote for their standard rate and complete fee schedule. A daily charge, a promotional interest rate and an annual percentage rate measure different things. Compare the total dollars due for your expected holding period.

Provider	Dealer fit	Public pricing	Fees and limitations
AFC Daily Tab	Independent dealers with fast-turn inventory	$4–$12 per day, based on the floored amount	Standard charges are bundled; other agreement fees apply. Unavailable in New York and South Dakota.
NextGear Capital / Flex	Independent retail and wholesale dealers	Quote required	Flex defers interest, advance-related fees and principal paydowns. The amounts remain payable.
Kinetic Advantage	Independent dealers	Standard rate requires a quote; eligible deferments cost $95 each	Deferment limits apply. Standard fees and interest continue.
Westlake Flooring	Licensed dealers nationwide	Advertised 0% introductory interest for up to six months	Restricted promotion can end early. Ongoing rate and complete fees require a quote.
ACV Capital	Dealers making eligible ACV purchases	60 Day Offer: no interest for up to 60 days, plus a checkout-disclosed fee	Vehicle purchase price must be below $40,000 before fees. Agreement interest applies afterward.
CarBucks	Independent used-car dealers	Quote required for complete pricing	Advertises no curtailments or audit fees. Ask for written Quick Turn conditions and remaining charges.
FlexPlus	Independent dealers, wholesalers and buy-here-pay-here lots	30-day flat-fee plans starting at $65, with no interest	Fees increase by vehicle-value tier. Full tiers and longer-term costs require a quote.
First Business Bank	Established independent dealers needing $1 million or more	Prime-based pricing; spread requires a quote	Inventory equity, operating history, financial strength and turnover requirements apply.
Ally	Qualified new- and used-vehicle dealers	Rate and fee schedule require a quote	Ask how inventory insurance, eligible rewards and cash-management arrangements affect net cost.
Ford Credit	Qualified franchised dealers	May 2026 filing: floating reference rate, then Prime, plus recent spreads of 0–0.50 percentage points	Additional per-vehicle flat charges, amounts undisclosed. This dated structure is not an all-in APR or a current quote.

AFC Daily Tab: the daily tiers and extension question

AFC publishes these exact tiers:

Floored amount	Daily standard charge
< $5,000	$4
$5,001–$10,000	$6
$10,001–$15,000	$10
> $15,000	$12

The exact $5,000 boundary is unclear in the published table; ask AFC which tier applies. Standard charges include interest, the floorplan fee and document processing. Eligibility is limited to qualifying licensed, non-rental dealers without a standard AFC line, using approved inventory sources.

An August 19, 2024 AFC article describes a 45-day term, one extension to 90 days and a 1% curtailment fee. AFC uses the term “curtailment fee.” Ask whether today’s extension requires a fee, a principal reduction, or both, and how the amount is calculated.

NextGear and Kinetic: what payment flexibility actually changes

For NextGear Flex, ask for the payoff amount at 30, 60 and 90 days. Its current terms make deferred amounts payable at the earliest applicable final-period date, maturity event or vehicle sale. A later payment date can help cash flow, but the eventual bill must fit the expected sales proceeds.

Kinetic’s deferment program applies to eligible curtailment payments, not a required final payoff. The total deferred cannot exceed 1.5% of the dealer’s credit line, and the dealer must be in good standing. Ask whether deferral merely moves a cash shortage to the following payment date.

Westlake: get the post-promotion price before signing

The advertised interest promotion can be withdrawn before six months. It excludes existing dealers who close and reactivate their floorplan, and dealers who closed within 90 days of the promotion’s start. Request the standard rate and every applicable fee alongside the promotional quote.

Westlake also advertises terms up to 200 days. That maximum does not establish your curtailment schedule. Its FAQ directs dealers without an existing Westlake Financial relationship to apply there before applying for flooring.

ACV’s 2026 programs: 60 interest-free days versus a 10-day cash window

The 60 Day Offer, effective February 16, 2026, charges a fee displayed at checkout. Interest starts under the loan agreement if the advance remains unpaid after the offer period. Ask whether the fee still makes sense if you expect to sell quickly. Returned-payment and reprocessing charges may also apply.

The separate Float to Floor terms, effective February 4, 2026, extend the first floorplan period to 70 days but provide only a 10-day cash-payment window. If unpaid when that window ends, loan-agreement interest and fees begin the following day. A separate checkout fee applies, and the vehicle price must be below $40,000 before fees. It is not 70 interest-free days.

CarBucks and FlexPlus: compare flat charges at your actual turn time

CarBucks advertises Quick Turn and longer plans, but complete Quick Turn conditions were not available in the public material reviewed. Request the cost for your vehicle value and expected sale date.

FlexPlus offers movement from a short-term plan into a longer arrangement, with long-term plans up to 120 days. Ask what the switch costs before assuming a low starting fee will cover a slow-selling vehicle.

Bank and captive programs: qualifications matter as much as the rate

First Business Bank lists at least five years of active ownership, 20% inventory equity, strong financials and inventory turning at least four times annually or averaging 90 days or less. Prepare an aging report before requesting a comparison.

Ally supports multiple approved inventory sources. Ask which purchases qualify and whether rewards depend on other products or transaction volume.

In Ford Credit’s May 2026 disclosure, higher-risk dealers may face principal curtailments, while rebates are paid separately from interest charges. Request an actual dealer schedule covering rate changes, flat charges, insurance and repayment timing.

Which dealerships can apply for inventory financing?

Floor plan providers serve different dealership models. Some focus on independent used-car dealers, while bank and manufacturer programs may have different operating-history, equity or franchise requirements. The comparison above identifies each provider's stated fit.

For example, First Business Bank lists specific ownership-history, inventory-equity and turnover requirements. Those are that provider's criteria, not a universal floor plan standard.

Excel's funding review is for established operating dealerships. Prepare your dealer license and ownership information, recent bank statements, financial statements, inventory aging and title records, and existing financing agreements. Include current floorplan balances, payoff obligations and curtailment schedules. If you provide buy here, pay here financing, have receivables and collection records available as well.

Franchise status describes the manufacturer's relationship with the dealership; new versus used describes the inventory sold. A new-car dealership can be a long-established business. Read more about franchised, independent and buy here, pay here dealerships in the funding guide.

Keep inventory, title and sale records consistent with the lender's statements. A sold-out-of-trust sale occurs when a financed vehicle sells without the required lender payoff. The OCC's floorplan lending handbook explains why inventory checks and payoff controls matter.

What to compare in a floor plan quote

Ask each provider to price the same inventory amount and expected sale date, then request a slower-sale example. Keep financing charges and principal payments separate so you can compare both cost and cash requirements.

Interest: the annual rate, any variable-rate reference, when interest starts, the day-count basis and how changes are calculated.
Fees: which amounts are charged once, by vehicle, by day or at an extension, and whether an introductory offer changes them.
Principal: the advance amount, any dealer equity required and the dates and amounts of curtailments.
Payoff: what becomes due when the vehicle sells, when the line matures or when a promotional period ends.
Fit: eligible vehicles and purchase sources, title requirements, and compatibility with existing financing agreements.

Before signing, ask which additional charges are possible: extensions, audits, titles, administration, required insurance, line opening or renewal, unused credit, late payments and insufficient funds. These are questions to check, not fees every provider charges. Confirm when interest starts, the calculation basis and what becomes due after a sale. Request a sample payoff statement so you can see how those charges appear together. Keep a copy of the agreed fee schedule with your inventory records.

Dealer floor plan financing questions

What is a good dealer floor plan financing rate?

There is no single published rate that applies to every dealership. Compare interest and fees in dollars at your expected inventory turn time, then test a slower sale. Review required principal payments separately because they affect cash flow without being an additional financing charge. Compare a regular quote separately from any introductory offer.

Does an interest-free floor plan offer mean there are no costs?

No. For example, ACV's 60 Day Offer includes a separately disclosed fee. Request the complete fee schedule and the price after the interest-free period before making a decision.

What happens if a vehicle takes longer to sell?

Check the agreement for continuing interest, scheduled principal reductions, extension charges and final payoff dates. A program that postpones a payment may still require the accrued amount later. The calculator compares different holding periods under its stated simple-interest assumptions; it does not reproduce every lender's repayment schedule.

Can an independent used-car dealership apply?

An established independent used-car dealership can request a review. Show vehicle acquisition costs, inventory age, reconditioning costs and the operating cash available after current obligations. The provider table identifies programs that serve independent dealers; final eligibility depends on the written offer and the provider's requirements.

Can I seek working capital if I already have a floor plan?

Bring the floorplan agreement and current statements to the review. A provider needs to assess existing payments, lien priority, restrictions on additional debt and any required consent. Our car dealership funding guide explains the other funding products to discuss alongside inventory financing.

Does this floor plan calculator show a lender quote?

No. It estimates annual simple interest on a 365-day basis using the amount, rate, days and fees you enter. Its cash-flow example assumes the full vehicle purchase is financed, fees and other vehicle costs are paid before sale, and principal plus interest are paid at sale. It does not model interim principal payments or curtailments. Use a lender's actual quote and payoff schedule to review the agreement.

Review your dealership inventory funding needs

Tell Excel how much inventory financing you need, which vehicles you plan to buy and how quickly they typically sell. Bring your current inventory and debt information so the review can account for cash needed before each sale.

Start my dealership funding review

Need to fund payroll, equipment, reconditioning or another business expense? Compare the four dealership funding options before choosing a structure.

Research notes: Provider pricing and eligibility are drawn from the linked official program pages and disclosures, checked October 7, 2026. Dated offers are identified where relevant. The lender comparison describes researched programs; ask Excel which options are available for your dealership. Examples are hypothetical, and final terms depend on a written offer.

Semi Truck Financing for New & Used Trucks

October 3, 2026September 28, 2026 by Nathan Abadi

Blue semi truck on highway for trucking business loans

What is semi truck financing?

Semi truck financing is a type of equipment financing for buying a tractor or trailer. The truck usually serves as collateral, so the lender looks at both your ability to repay and the truck’s value.

Expect questions about your credit, business history, income and down payment. The lender will also want the truck’s price, age, mileage and seller details.

Need help paying for fuel, payroll, repairs or the wait between invoices? Visit our trucking business loans guide for funding options that cover those operating expenses.

Semi truck financing is best suited for:

Buying a first truck
Replacing an aging tractor
Adding trucks for a new contract
Purchasing a used semi truck
Expanding an established fleet
Financing trailers or specialized commercial equipment

01 / Financing products

Three ways to fund your next truck

Each option below can serve a truck purchase. What matters is whether the lender accepts the equipment and offers payments that fit your business.

Equipment financing

For a specific truck or trailer. Equipment loans and finance agreements typically use the purchased vehicle as collateral; some partners may offer leases. Startup eligibility depends on the program, owner credit and the truck.

Choose eligible equipmentLender funds the purchaseRepay on an agreed schedule

Compare the down payment, truck age and mileage limits, lien, and any final balloon payment.

Explore equipment financing

Term loans

For a planned truck purchase. A lump sum may finance an eligible semi or trailer when the lender permits equipment purchases.

Define the funding needReceive an approved lump sumMake scheduled payments

Compare payment frequency, repayment period, total cost, collateral and personal guarantees.

Explore term loans

SBA financing

For a qualifying equipment purchase or fleet expansion. SBA 7(a) loans are made by participating lenders with an SBA guarantee.

Confirm business eligibilityComplete lender underwritingFund approved uses and repay

Ask whether the proposed truck purchase qualifies, what cash contribution is required and how long closing may take.

Explore SBA financing

These categories can overlap: an SBA loan is often a term loan, and an equipment loan also has a repayment term. Product availability and approval depend on the business, equipment and lender. SBA 7(a) program details.

Semi truck payment calculator

Enter the truck price, your down payment, an interest rate and a repayment term to estimate the monthly payment. This is a planning tool, not a financing quote or approval.

Truck purchase price

Down payment

Illustrative annual interest rate (%)

Term in months

Estimated amount financed$130,000

Estimated monthly payment$2,699

Estimated total payments$161,915

This estimate assumes monthly payments that pay off the loan in full by the end of the term. It excludes taxes, fees, documentation costs and balloon payments. Your actual offer may work differently.

Excel Capital Management

Finance the truck.
Plan for the miles ahead.

Buying your first semi, replacing an older truck or adding another rig? Start with the truck’s price and a payment your business can afford, then compare your financing options.

Explore my financing options

New and used trucks · Trailers · Fleet purchases
Financing is subject to lender approval.

Blue semi truck traveling on a highway

Semi truck financing helps you buy a truck and spread the purchase cost over time. Before you commit, work out what you can put down and how much cash you’ll need left over once the truck is yours.

You may be able to finance a new or used semi rather than pay the full price upfront. The options depend on your business, the truck you choose and the lender’s requirements.

Excel Capital’s approach

How Excel reviews a truck purchase

We review the buyer and the specific truck, then compare equipment-financing sources based on the business’s stage. Lenders set their own credit, equipment and closing rules, so there is no single score, time-in-business or down-payment cutoff.

Startup or first-time owner-operator

Owner credit, trucking experience, available down payment and reserves, and the chosen truck carry weight. Existing revenue can help, but some equipment programs consider newer businesses without it.

Programs Excel may compare: commercial truck or equipment loans, equipment finance agreements and leases where a source accepts startups. Availability and terms vary by lender.

Public market example: a truck-finance specialist advertises first-time buyer programs.

See the startup and first-truck checklist.

Existing trucking business

Lenders can review owner and business credit, bank activity, revenue, operating history, current debt and whether another truck payment fits the business.

Programs Excel may compare: truck or equipment loans, equipment finance agreements and leases where available. A business term loan or SBA 7(a) loan may also fund an eligible purchase for a business that meets separate program requirements.

Public market example: an established-business equipment lender says it generally looks for two or more years under current ownership and good credit.

See established carrier requirements.

These linked lender guidelines illustrate different market criteria. They do not identify Excel Capital partners or promise approval. The financing source determines the actual down payment, credit conditions, term and final offer.

02 / Plan the purchase

The truck price is only part of the budget

A hypothetical $100,000 purchase with $20,000 down. This is an example, not a required down payment or an offer.

20%80%

$20,000Cash toward the purchase

$80,000Truck balance to finance

Budget separately for getting on the road

Taxes and title • Registration and permits • Insurance • Inspection and initial repairs • Fuel and operating reserves

Confirm which charges can be financed and which must be paid at closing. Keep a reserve for downtime and the wait between delivering a load and getting paid.

New vs. used semi truck financing

Factor	New semi truck	Used semi truck
Purchase price	Typically higher because the truck is new and fully spec’d.	Can reduce the upfront purchase price, depending on age, mileage and condition.
Equipment risk	Newer equipment generally has less age-related mechanical history.	Lenders may look more closely at mileage, age, condition and remaining useful life.
Down payment	Depends on the borrower and lender.	May vary more based on equipment age, value and lender guidelines.
Documentation	Dealer invoice, equipment specs and purchase agreement are commonly relevant.	Seller information, title history, mileage, condition and valuation can receive additional attention.
Best fit	Businesses prioritizing newer equipment, warranties and longer expected service life.	Businesses seeking a lower purchase price or a specific used unit that fits their operation.

03 / Lender requirements

Semi truck financing requirements for established carriers

For a trucking business with operating history, Excel compares the company’s financial record, owner credit and the truck against participating lenders’ requirements. Criteria vary by program; there is no universal score or down-payment minimum. Starting a new business or buying your first truck? See the startup checklist below.

Operating history

Time in business, ownership, fleet size, current truck payments and prior equipment financing.

Business cash flow

Recent bank statements, revenue and existing debt payments help show whether an additional truck payment fits.

Credit profile

Owner and business credit, existing debt and payment history.

Cash contribution

Down payment, closing costs and reserves after the purchase.

Equipment details

Year, make, model, VIN, mileage, price and condition.

Closing documents

Seller invoice, title information and insurance required by the lender.

For a used truck, gather maintenance records and consider an independent inspection before committing to the purchase.

Startups & first-time owner-operators

Can a startup or first-time owner-operator qualify?

Yes. Excel Capital can review startup and first-truck applications through equipment-financing sources that consider newer businesses. The right option depends on the owner’s credit, cash available for a down payment, trucking experience and the truck being purchased. A new business may have fewer program choices or need more cash at closing than an established carrier.

Owner and business plan

Be ready to discuss personal credit, relevant driving or industry experience, and how the truck will earn revenue. Loads or contracts already lined up can help explain the plan, but they are not required by every equipment program.

Down payment and reserves

Know what you can put down and what will remain for insurance, fuel, maintenance and early payments. Some startup programs may require more cash at closing than programs for established carriers.

The truck and seller

Bring the purchase quote, VIN, year, mileage, condition and seller details. A lender may limit older or high-mileage trucks or require extra checks for a private sale.

Trucker reviewing business and freight paperwork

Prepare before you apply

Bring the truck details. Know your budget.

Have a truck quote ready and know what you spend each month. Include existing loan payments, insurance, maintenance and fuel. The new truck payment needs to fit alongside those bills.

Explore my financing options

How much down payment do you need for a semi truck?

The down payment on a semi truck loan depends on your credit, business or driving history, the truck and the financing source. As a market example, one specialty truck-finance provider advertises programs starting at 10% down; that is not an Excel Capital minimum or a promise that any applicant will receive that offer. Another provider notes that startups may be asked for more cash down or face narrower equipment choices. Zero-down options, when available, are conditional.

Ask for the full cash due at closing, including down payment, taxes, fees and insurance. An established carrier buying a newer truck may receive a different offer from a first-time owner buying a high-mileage rig. Compare that upfront amount with the payments and operating cash you will need afterward.

Used semi truck financing

A used truck may cost less to buy, but the purchase price doesn’t tell you what it will cost to keep running. With used semi truck financing, the lender will also consider the truck’s age, mileage, condition and value.

Get the VIN, year, make, model, mileage, price and seller details before applying. Ask about equipment limits early, especially if you’re looking at an older truck. You don’t want to pay a deposit before learning that the lender won’t finance it.

Owner-operator truck financing

Buying your first truck is a different step from adding another one to an established business. For owner-operator truck financing, be ready to explain your driving experience, business history and how you expect the truck to earn revenue.

A new owner-operator can be considered through equipment programs that accept first-time buyers. Personal credit, prior driving experience, planned operations, the truck and the available down payment may carry more weight before the business builds a revenue history. Leave room in your budget for insurance, fuel and maintenance before the first load pays.

Truck and trailer financing

Plan for the full setup

Buying a tractor and trailer together? Get a separate price and description for each. A dry van and a refrigerated trailer can have different values and financing requirements.

Ask whether both can go into one financing agreement. Confirm the down payment, insurance and lien requirements for each asset.

Explore my financing options

Financing a semi within a commercial truck program

A lender’s commercial truck financing program may cover semis along with box trucks, dump trucks, tow trucks and other work vehicles. Check that the specific truck you want qualifies.

Ask about age and mileage limits, acceptable sellers and how the lender values the truck. Those details can affect both approval and the amount you need to put down.

Financing multiple semi trucks

If you’re buying several trucks, the lender may review the purchase as a fleet financing request. Have your business financials, current debt payments and details of the trucks you’re buying ready.

Work through what the additional trucks will earn and cost to run. A new contract can help explain the purchase, but you still need to cover payments, drivers, insurance and downtime if the work slows.

Semi truck loan vs. equipment financing vs. leasing

Option	How it works	When it may fit
Semi truck loan / equipment financing	The business finances the purchase of the truck and repays the obligation over an agreed term.	Businesses that want to own the vehicle and spread the purchase cost over time.
Equipment lease	The business pays to use the truck under a lease agreement, with end-of-term options depending on the contract.	Businesses prioritizing use of the equipment over immediate ownership.
General business loan	A lump-sum loan is not necessarily tied specifically to the vehicle.	Can fit broader business needs, but may not match a truck purchase as closely as equipment-specific financing.

04 / From truck selection to closing

How to finance a semi truck

Get the purchase details ready before comparing offers.

Choose the truckConfirm price, VIN, mileage, condition and seller details.
Prepare your fileGather business information, financial documents and your planned cash contribution.
Compare offersReview rate, fees, payment schedule, total repayment and early-payoff terms.
Complete closingSatisfy lender requirements for title, insurance, documents and seller payment.

An initial response is not final approval. Funding timing depends on underwriting, equipment review and completed closing requirements.

Do not finance the truck in isolation. A payment that looks affordable can still strain the business if it leaves too little working capital for fuel, insurance, maintenance and the time between completing a load and collecting the invoice.

Semi truck financing with bad credit

A lower credit score can narrow your choices or lead to a larger down payment and higher cost. Lenders may also look at your business history, cash flow, trucking experience and the truck’s value. Approval still depends on the full application.

Before accepting an offer, check what will be left in the bank after the down payment and closing costs. Getting approved won’t help much if the payments leave too little for running the truck.

Semi truck financing FAQs

Can I finance a used semi truck?

Yes, if the truck meets the lender’s guidelines. Ask about age, mileage, condition and seller requirements before paying a deposit.

What credit score is needed for semi truck financing?

Credit matters, but Excel’s equipment sources do not share one score cutoff. Published established-business programs often favor stronger credit and operating history; specialty truck programs can consider first-time buyers and lower scores, usually with different down-payment or truck requirements. Ask which actual program fits your credit, cash contribution and chosen truck.

Can an owner-operator finance a first truck?

Yes. Excel can review a first-truck request, including from a new owner-operator, with equipment sources that accept newer businesses. Owner credit, relevant trucking experience, cash available at closing, insurance and the truck’s details will shape the programs available and the offer, if approved.

Is semi truck financing the same as a business loan?

It’s business financing specifically for an equipment purchase. The truck usually serves as collateral. General business loans can cover a wider range of expenses, depending on the agreement.

Can I finance more than one truck?

Yes, subject to approval. Lenders may offer equipment or fleet financing for several trucks, but they’ll need to see that your business can handle the combined payments.

How fast can I get semi truck financing?

Ask the lender for two timelines: when you can expect a decision and when the seller can expect payment. Missing documents, title issues, insurance or equipment checks can delay closing.

How long can you finance a semi truck?

That depends on the lender, your application and the truck’s remaining useful life. Ask which terms are available for your specific truck, then compare the monthly payment and total repayment. Check for a final balloon payment too.

Is zero down semi truck financing available?

Some lenders may offer zero down financing to qualifying borrowers. Ask whether there are still fees, taxes or insurance costs to pay upfront. Get the total cash due at closing in writing.

Can I finance a semi truck without a CDL?

Requirements vary by lender. Ask whether you must hold a CDL yourself or whether the lender will consider a business that hires a qualified driver. Financing doesn’t replace the licensing, insurance or operating requirements for putting the truck on the road.

Is guaranteed or no-credit-check financing really guaranteed?

An ad is not an approval. Ask what credit, business and equipment checks the lender performs. Before paying a deposit, get the approval conditions, fees and repayment terms in writing.

How should I compare semi truck financing rates?

Put offers side by side using the same loan amount and term. Compare the interest rate, any APR disclosure, fees, payment frequency and total repayment. Also check balloon payments and early-payoff terms. A factor rate is not an annual interest rate.

Buying a semi truck or commercial vehicle?
Compare equipment-financing options based on the truck, your business and the amount you want to finance.

Check financing options Learn about equipment financing

Recourse vs. Non-Recourse Factoring: What’s the Difference?

October 3, 2026September 21, 2026 by Maria Khatiashvili

Two business professionals reviewing folders labeled Recourse and Non-Recourse beside invoice paperwork.

Understand the costs, the protection, and what happens when a customer does not pay.

The key difference

Who is responsible when your customer does not pay?

Recourse factoring lets the factoring company look back to your business for payment under the agreement. Non-recourse factoring transfers specified customer credit risk to the factor. It does not automatically transfer every risk attached to an invoice. ^[1][2]

Start with three questions: What will you receive now? What will it cost? What happens if the customer does not pay?

01 / Understand the tradeoff

Recourse vs. non-recourse factoring at a glance

Waiting on an invoice and worrying that it will never be paid are two different problems. A factoring offer can address the first without fully protecting you from the second.

With invoice factoring, a business sells a receivable to a factoring company. The customer that owes the invoice is often called the account debtor. The factor may handle collection as part of the arrangement. ^[2][3]

Same invoices. Different risk.

Compare the contract, not just the label.

What changes?	Recourse	Non-recourse
Unpaid invoice	The business may face a chargeback.	The factor takes the credit risk specified in the agreement.
Price	Often less expensive.	May cost more for defined protection.
Advance	Depends on the offer.	Depends on the offer.
Disputes	Check seller obligations.	Not automatically covered.
Before signing	When can an invoice be charged back?	What exact event triggers protection?

Read both offers side by side. A bigger advance and broader credit protection are different benefits. One does not establish the other. ^[1][3]

The comparison is a reading guide, not a statement that every factor offers identical terms.

What is recourse factoring?

With factoring with recourse, your business retains responsibility for an unpaid receivable under the agreed terms. A contract may require repayment, an eligible replacement invoice, or an adjustment to reserves or future funding. The label alone does not tell you the deadline or the dollar amount. ^[1]

That deadline matters. When reviewing an offer, write down whether it is measured from the invoice date, the due date, or another event. Then ask what notice you receive and how a later customer payment is handled. Keep an accounts receivable aging report beside the quote so you can compare outstanding invoices with its chargeback deadlines.

Follow the invoice and the money

A simplified recourse factoring arrangement.

1Invoice your customer

Goods or services are delivered.

2Submit for approval

The factor reviews the receivable.

3Receive the advance

The offer sets any reserve.

What happens at collection?

Customer pays the factor

The remaining reserve is settled after fees and other agreed adjustments.

Invoice stays unpaid

The agreement determines any repayment, replacement, or reserve deduction.

These are alternative outcomes, not consecutive steps. Check the agreement for the timing and amount of a chargeback. ^[1][2]

What does a factoring chargeback mean?

A chargeback in this context returns responsibility for a receivable to the seller under the factoring agreement. It is not a cardholder disputing a credit-card purchase. Ask the factor to show how the adjustment would appear on your account statement. ^[1]

For planning purposes, do not assume the withheld reserve is the most you could owe. Request a worked example using one of your own invoices, including any fees and the treatment of money collected afterward.

02 / Read the protection

What is non-recourse factoring?

Non-recourse factoring, also called factoring without recourse, shifts defined customer credit risk to the factor. Protection may depend on an approved customer, an eligible receivable, and a qualifying reason for nonpayment. Some agreements cover insolvency but not an ordinary overdue invoice. ^[1][2]

The practical question is not “Is this non-recourse?” It is “What would make this invoice protected, and what would leave it outside the protection?”

Non-recourse is not all-risk protection

Use this checklist to read the actual coverage clause.

Confirm what is included

Defined insolvency eventsWhich customer credit events qualify?

Approved invoices and limitsDoes this invoice fall inside the protection?

Waiting periods and deadlinesWhat must happen before a loss is covered?

Do not assume these are covered

Service or invoice disputesDisagreement is not the same as inability to pay.

Returns, credits, or deductionsCheck responsibility for a reduced invoice.

Fraud or documentation problemsReview the seller’s promises and exclusions.

Ask for a written answer: “Would this specific invoice and this specific reason for nonpayment qualify?” ^[1][2]

Compare the reason for nonpayment

Imagine two customers owe the same amount. One cannot pay because its business has failed. The other says the goods were defective and refuses to accept the invoice. Those situations need separate answers in your contract review.

Use the same approach for a missing purchase order, a credit memo, or a partially disputed invoice. Ask whether the problem makes the entire receivable ineligible or only affects the disputed amount. Do not rely on a sales summary to answer that question.

A useful protection clause should tell you which customer, which invoice, which event, and which amount it covers.

03 / See the numbers

Recourse and non-recourse factoring: a $20,000 example

Suppose a staffing business has a $20,000 invoice for completed work. It wants cash before the customer pays and is comparing two offers.

Teaching assumptions: Both offers advance 90%. The customer pays in full on day 30. The recourse fee is 2% of the invoice and the non-recourse fee is 3% for that same period. There are no additional fees, credits, deductions, or other reserve holds. These figures are invented for illustration.

One $20,000 invoice. Two hypothetical offers.

Same advance and payment date, different assumed fees.

Recourse example

Initial advance90% of $20,000$18,000

Reserve withheldNot a fee$2,000

Assumed fee2% of the invoice, paid on day 30$400

Reserve released$2,000 less the fee$1,600

Total receivedAdvance + reserve released$19,600

Non-recourse example

Initial advance90% of $20,000$18,000

Reserve withheldNot a fee$2,000

Assumed fee3% of the invoice, paid on day 30$600

Reserve released$2,000 less the fee$1,400

Total receivedAdvance + reserve released$19,400

$200 difference in this example. The figures show the cost when the customer pays, not the result of a default claim. Invented teaching assumptions, not Excel pricing or market averages.

Arithmetic: $18,000 + $1,600 = $19,600; $18,000 + $1,400 = $19,400. The reserve is money withheld initially, not an additional charge.

Now change the outcome, not the invoice

Customer pays

The example settles as shown

The business receives $18,000 first, followed by the reserve release. The non-recourse offer costs an extra $200 under these assumptions. No default protection has been used.

Customer pays late

Recalculate the fee and timing

The day-30 figures no longer tell the whole story. Ask whether fees continue, whether a chargeback deadline applies, and what happens to a payment received after that deadline.

Customer becomes insolvent

Check whether the event qualifies

For a non-recourse offer, confirm that this customer and invoice were covered, the event meets the definition, and all conditions were satisfied. Do not assume the example guarantees payment of the full $20,000.

Customer disputes the work

Review the seller’s obligations

Ask each provider to explain how an invoice dispute changes the result. A protection clause for customer credit failure should not be treated as an automatic answer to a service complaint.

Compare factoring fees over the same payment period

Factoring costs can depend on how long an invoice remains outstanding. Comparing two headline percentages without their fee periods can give you the wrong answer. ^[3]

For a second hypothetical example, suppose an offer charges 2% for the first 30 days and another 1% for the next 15 days. On a $20,000 invoice paid on day 45, those assumed charges total $600, not $400. An offer charging a flat 3% through day 45 would also cost $600 before other charges.

For each quote, request a dollar-cost example at your customers’ expected payment dates. Include any minimum charges, setup or transfer fees, reserve rules, and termination costs that appear in the agreement. Mark anything not specified as an open question rather than treating it as zero. To put those payment dates in context, review how to calculate your accounts receivable turnover.

Keep the two comparisons separate: compare cash and fees when the customer pays, then compare contractual responsibility when it does not. A lower price does not make an exclusion disappear.

Business team reviewing an invoice and a checklist covering customer approval, payment terms, coverage, fees, and reserves. — Compare customer approval, coverage, payment timing, and fees in the same review. Illustrative business scene, not a photograph of Excel staff or customers.

04 / Make the decision

Which option makes sense for your business?

Use the following questions to organize the decision. They are not a substitute for reading the offer, and they do not make either structure the automatic winner.

How much could you absorb?

Take the largest invoice you expect to factor and place a potential chargeback next to the same week’s payroll and supplier obligations. Would the business still have room to operate? Run the exercise for more than one unpaid customer, not only your average invoice.

Is the protection relevant?

Write down the nonpayment scenario you are trying to protect against. Then find the clause that addresses it. Paying more for insolvency protection may not solve a problem caused mainly by customer disputes or missing paperwork.

How concentrated are your invoices?

Consider a business with ten similar customers and another with one customer representing half its receivables. They may view the same offer differently. Ask how customer-level limits would affect the invoices that matter most to your cash flow.

What is the cost of the restriction?

Look beyond the quoted fee. Consider an invoice that cannot be funded, a reserve released later than expected, or a contract that is difficult to leave. Put those terms beside the protection, rather than evaluating each in isolation.

A sensible comparison ends with a written explanation of the cash you receive, the cost over your payment cycle, and the obligations you keep.

What to ask recourse and non-recourse factoring companies

Send the same questions to each provider. Ask them to reference the relevant contract clause and use the same sample invoice.

What exactly triggers a chargeback?Request the deadline, notice process, calculation, and permitted ways to resolve it.
What does “non-recourse” cover here?Ask for the precise credit event, eligibility conditions, exclusions, and any waiting period.
Is approval also confirmation of protection?Ask whether an approved invoice is covered and what amount or customer limit applies.
When is the reserve available?Have the provider explain fees, adjustments, and any circumstances that delay release.
What happens if the customer pays afterward?Confirm how later collections, prior chargebacks, and additional fees are reconciled.
What do the other contract terms require?Review minimum volume, exclusivity, renewals, notice periods, and exit charges.
What security or guarantees are required?Ask your attorney to explain any UCC filing or lien, guarantee, or seller representation before signing.
What will my customer experience?Confirm payment instructions, collection communications, and who handles disputes.

This is an educational comparison checklist, not legal or accounting advice. Have your attorney and accountant review the actual agreement and its treatment for your business.

How the comparison applies across industries

The same questions can be applied to a staffing invoice for completed shifts, a wholesaler’s accepted shipment, a manufacturer’s delivery, or a professional-service invoice. A freight invoice is another application, not the definition of the product.

Choose examples that resemble your own receivables. In each case, ask what evidence establishes that the customer owes the amount and what the factor needs before purchasing it. For the broader product overview, read Excel’s invoice factoring guide.

Frequently asked questions

Is factoring without recourse the same as non-recourse factoring?

Those labels commonly describe the same broad structure. The wording is not enough to compare offers. Read the coverage definition and the seller obligations in each agreement. ^[2]

Does non-recourse factoring mean I receive the entire invoice upfront?

No. The advance and any withheld reserve are separate from the allocation of credit risk. The example above deliberately uses the same 90% advance for both offers so you can compare the assumed fees.

How do I decide whether non-recourse protection is worth the extra cost?

Identify the loss you need protection against, confirm it is covered, and compare the additional cost with the obligations and limits that remain. Use an actual invoice and your own cash-flow needs rather than a general “best option” ranking.

Can a small business use this comparison?

Yes. Start with the invoices you actually issue and the customers that pay them. Whether a provider accepts your business is a separate question from whether its proposed coverage addresses your needs.

Is invoice factoring the same as invoice financing?

Not necessarily. Factoring generally involves selling receivables, while invoice financing may involve borrowing against them. Ask what transaction is being offered and how collections, repayment, and costs work. ^[3]

Can I apply this guide to recourse and non-recourse loans?

This guide compares invoice factoring agreements. Do not use its examples to decide the obligations under a mortgage, equipment loan, or other loan agreement. Have the specific financing contract reviewed separately.

Explore the product

How much funding can you use?

Start with the invoices you have, the customers behind them, and the timing of your cash needs. Explore Excel’s invoice factoring information before discussing a specific offer.

Explore invoice factoring →

Sources and further reading

The Department of Commerce guide discusses export factoring; it is background, not a promise that a domestic agreement has the same terms. IFC is broader industry background. Provider explanations do not replace the agreement offered to your business.

Truck Overhaul Financing: How It Can Help Your Business

June 13, 2018June 1, 2017 by Maria Khatiashvili

The trucking industry can be a highly competitive and taxing. Training drivers to operate new equipment and trucks, the length of your payment terms with various vendors, the price of fuel, and maintenance are all expenses that need to be considered. From driving through hilly terrain to hauling heavy loads, a lot of stress is put on your truck’s engine. Despite staying on top of fixing small problems before they become bigger problems you will eventually have to put money towards a major fix. This is where truck overhaul financing can help.

While you should take your truck to a shop for analysis, you can also use your senses (sight, hearing, smell, and touch) to monitor their condition. If your truck is showing any of these signs, it could mean that it’s time for an overhaul:

Increased oil consumption: This is caused if the valve guides are worn, or if there’s too much space between the valve stems and guides, or if the valve guide seals are worn, missing, broken or not installed correctly. The engine may still have good compression, but it will use a lot of oil.

Excessive Exhaust: Since they positioned in the back of the truck, your tailpipes can go unnoticed. However, knowing if it blows excessive smoke, that’s a good indication that it’s time for an engine rebuild. Thick and dark is another clue. Just keep an eye on the tailpipe and take notice of any unusual smoke or a larger amount of it is coming out of your tailpipe.

Black, blue, or white exhaust: See if your truck is emitting exhaust that is blue, black or white in color.

Water in the oil: If there’s water in the oil, it will create a foam or gunk on the fill cap or the dipstick. Water that has formed on the dipstick will also cause rust to develop.

Engine knocking: Listen for changes in the way your trucks sounds when running. Rough running and pinging are both signs. If you ever hear a sound coming from your engine that sounds bad, it would have to be the knocking sound that gets louder when you rev the engine. This can sound like someone is actually knocking on your engine. This sound is not just annoying, but not a good indicator. It is not normal and sometimes it can lead to other auto problems if not addressed properly.

Oil pressure gauge: Even if the gauge isn’t calibrated perfectly, look out for any noticeable change in its reading.

Sludge: If you notice oil sludge on your oil pin when you clean and replace your oil, then you know your engine is not working well. Oil or coolant sludge is not just gross, it’s also a sure sign that you will need an engine overhaul in the immediate future. Sludge is wasted oil or coolant that is not going to be used. Plus it can cause issues that may make your engine not run very well.

Overheating oil: Oil that’s overheating smells like burning oil.

Reduction in acceleration: This is a sign of loss of cylinder compression.

Low fuel economy: Fuel is be pricey and can be a nuisance if you constant have to refill our tank, especially during long distance hauls. When the engine is slow or not working well, it can uses a lot more gas just to run.

Low oil pressure: This happens when the oil pump does not create pressure, and as a result, oil doesn’t all of the components. It’s often due to worn rod bearings or a broken oil pump.

Truck Overhaul Financing Options

Overhauling an engine can be costly and you may need additional working capital to help. The following are some of the trucking overhaul financing options available:

Equipment Financing: Used to help business owners purchase any type of equipment needed to run the business. The loan amount is dependent upon the type of equipment needed, as the repayment term is usually as long as the expected life of the piece of equipment and if it is used or new.
Merchant Cash Advance (Split Funding): Transactions that are collected through a set percentage of your Visa and MasterCard sales that are accepted at your place of business. Probably the most common term used in the industry. These do not have a set repayment schedule and are based on the volume of your businesses credit card processing sales. These are usually only guaranteed by the future sales of your business.
Term Loans: A loan that is backed by a bank for an exact amount that has a specified repayment timetable and interest rate that are adjusted accordingly. Terms mature between 1 and 10 years.
ACH Loan: These loans may need personal guarantees, and have a fixed repayment schedule that is paid either daily, weekly or monthly. These products are catered to industries that do not accept credit cards and need a fixed payment.
Business Lines of Credit: A rotating loan that gives business owners access to a fixed amount of money, which they can use day-to-day according to their need for cash. Interest is only paid on the amount of the advance actually used.
Emergency Business Loans: Loans that are funded quickly to help your business get out of a jam quick. Generally funded within 24 hours.

Application Process

Once a business has been approved, they can be funded in a little as a week. Usually, the documentation that is initially submitted is enough for this to happen in most cases, but there are instances when additional documentation may be requested depending on the lender. The following is the standard business documentation you should have prepared when starting the application process:

Business license
Voided check for the business account
Clear copies of identification for all owners
Proof of ownership
Trade references
Four months of bank statements
Four months of credit card statements (if applicable)

If it’s time to get some work done, trucking overhaul financing could be right for your small business. Excel Capital Management’s funding specialists are here to help and guide you every step of the way. Excel Capital Management will work to match your business capital needs. Give us a call at 877-880-8086 or APPLY NOW!

What are the 4 C’s of Credit For Getting a Business Loan?

February 10, 2020March 8, 2017 by Simon Reed

The 4 Cs of Getting a Business Loan | Excel Capital Management

You’re probably already aware that your credit score plays an important role in determining your eligibility to obtain a business loan or line of credit and that’s why it’s more important than ever to know what the 4 C’s of credit are.

However, what most don’t know about the 4 c’s of credit is what specific factors lenders look for within that overarching category.

When determining your eligibility for a loan, lenders look for what are called the ‘4 C’s of credit’ and, in fact, they stretch beyond just your credit score.

The number and type of factors vary somewhat depending on the lender, however, the four C’s of credit were created to help simplify and clarify the loan process for small business owners looking to obtain a loan.

It can be looked at like a guiding light to help understand what lenders and other funding companies look for when evaluating a business for credit

What are the 4 C’s of Credit?

The 4 C’s of credit are as follows –

Collateral

Typically appearing in the form of property or other physical assets, collateral is any asset a borrower can offer to secure a loan.

If the borrower defaults on the loan, the assets they used as collateral can be seized. Many small business owners are wary of secured business loans because of this reason as they require hard collateral that is tied to your personal assets. Many business owners are and have the right to worry about crossing the line between business and personal. Making a business mistake shouldn’t have to affect your personal assets.

Fortunately, unsecured business loans often don’t require collateral, and if they do, it’s a form of ‘limited’ collateral such as a portion of business sales which isn’t required to be paid back if you go out of business, meaning the risks are much lower.

Capital

Capital refers to any business asset that can be sold to make loan payments. This includes available money and cash savings, investments, properties with equity, and other assets that you could sell or use to quickly obtain cash.

If business drops off and you’re unable to pay your loan payments for a time, lenders want to see that you have liquidity to cash out on so you can continue to make payments on time.

Capacity

Capacity refers to your business’ ability to make the revenue needed to pay back a loan.

Lenders don’t just want to see that you have assets you can use to pay off a loan (or which they can secure to do so), they want to see a history of being able to make regular payments regardless of those assets.

Character

The final ‘C’ in the 4 C’s of credit, lenders determine character by reviewing the borrower’s personal credit history and calculating several factors together.

Factors taken into account include:

Your total amount of debt
Delinquent accounts
Available credit
And whether you make payments on time

If you’re in need of a small business loan but don’t believe you can satisfy all four C’s of credit, don’t worry, there are several other options available. Now that you know what the four C’s of credit are you can easily understand how to prepare yourself and your business when you try to pursue a lender for any sorts of funds.

At Excel Capital, we provide a variety of financial solutions which we can offer even if you have bad credit.

Click here to complete our short application to get in touch with one of our financial specialists to see how we can help.

TrakLoans: How They Can Help Your Small Business

March 13, 2020December 15, 2016 by Simon Reed

As a business owner, you understand the importance of having the working capital necessary to grow your business and achieve success. Whether business is booming and you need capital for inventory purchases, expansion, new hires, and training, or you run into some cash flow issues over time and need it to these problems, most businesses will apply for funding at some point. You’re probably a little familiar with many of the alternative funding solutions we offer such as Merchant Cash Advances, Business Lines of Credit, Term Loans, and more, but now, we’d like to introduce to you the TrakLoan.

TrakLoans are a flexible, cash-flow friendly way to access small business capital fast. These loans work particularly well for businesses whose owners value having the amount they remit fluctuate with their daily payment card receivables. TrakLoans are also a stress-free funding solutions because instead of sending a large payment amount once a month, a flat percentage of your business’ credit and debit card sales are automatically remitted on a daily basis. That being said, a larger payment amount is only sent on busy sales days rather than slower days. Additionally, these types of loans have no maturity date and no fixed payment amounts. Thanks to this process, business owners can stay 100% focused on growing their business rather than repaying a loan. There are no checks to write or harassing phone calls coming to your business. The payment process stops automatically once the TrakLoan is repaid in full.

To add to the benefits, unlike traditional banks and lenders, alternative financing companies, such as Excel Capital Management, that offer TrakLoans have minimum qualification requirements. All that is required to get started is a completed one-page application form. No personal collateral is needed to qualify, and poor credit is not a deal breaker. For more information on TrakLoans, APPLY NOW!

An ACH Loan Could Be The Perfect Funding Solution for Your Business

March 19, 2024September 6, 2016 by Maria Khatiashvili

ACH Cash Advance or ACH Loan for Your Bar or Restaurant

Deciding if an ACH Business Loan is right for your business:

Applying for funding for your business can be quite daunting. Do you go the traditional bank loan route or work with an alternative lender? ACH Loans make Funding Quick and Easy

Well, traditional bank financing can be quite tedious, tiresome, and unfortunately, not always the best solution.

Alternative lenders like Excel Capital Management can offer better funding products depending on your business’ needs such as an ACH Business Loan. Let’s take a closer look at how ACH Loans work and how one could benefit your business.

What Are ACH Loans?

money exchange | Excel Capital Management

To start, the primary purpose of an ACH Business Loan is to service the working capital needs of small to medium-sized business owners. They are a popular funding solution for businesses that do not accept credit cards or want a set repayment schedule.

Whether you need the working capital obtained through an ACH Business Loan for inventory purchases, new hires, employee training, additional office space, or almost anything else for your business, this funding solution can be extremely beneficial.

Unlike traditional business loans, funds from ACH Business Loans are disbursed in as little as one business day after being approved for funding.

Additionally, this funding product does not require a minimum credit score to qualify, which means many up and coming businesses or businesses experiencing a rough financial period. Having collateral is not necessary to qualify, so business owners who have poor credit or lack business history can still apply for this great funding solution.

Lenders use the ACH (automated clearing house) system provided by many banks to set up automatic recurring payments to collect payments. This is the main set up for Unsecured Business Loans.

Payments are usually remitted via daily or weekly ACH’s and provide micropayments instead of one large payment due at the end of every month. This ACH loan process reduces the risk for many higher-risk industries such as restaurants, car dealerships and trucking. Allowing alternative lenders to provide restaurant business loans, Cardealer funding and truck financing when most other traditional banks would not consider funding.

What Can an ACH Loan Be Used For?

The great thing about ACH Loans is that they are a funding solution that can be used for businesses in all industries and for virtually anything as long as it pertains to the business itself. Here are some common uses of working capital acquired through an ACH Business Loan:

Business Permits & Licenses – Depending on your industry and state of operation, your business may be obligated to obtain and display certain permits and licenses. Renewing these documents can be costly, but are necessary since not having the proper documentation at any point of operation can cause major legal issues in the future.

Office Space & Business Locations – Maybe you need an office space or facility in order to properly operate. Business capital can be used to acquire new space or to improve and expand an existing location.

Inventory Purchases – Business capital acquired through an ACH Business Loan can be used for bulk inventory purchases so there is never a shortage of goods and products. Often times, purchasing inventory in bulk has it’s benefits and is much cheaper than individual purchases.

Marketing & Advertising – Website development, paid ads, and social media marketing is a big job, and hiring a team of professionals can be pricey. Having enough business capital in order to cover these expenses can help tremendously.

Research & Development – Constantly developing your products, goods, and services is essential for staying ahead of the competition in your industry. Additionally, doing the proper market research and analyzing your target audience and consumers is key to knowing what your customers want. Business capital can certainly be used to help fund this process.

Product Manufacturing – Similar to research and development, product manufacturing may be a constant need depending on your industry and business capital may be needed during slow periods or when business is so great, that you must quickly meet the demand.

Employee Hiring & Training – Consider using the capital obtained through an ACH Business Loan to hire additional employees or to train existing staff on new business operations.

How are ACH Business Loans Paid Back?

The process of collecting payments on an ACH Business Loan is typically done through the Automated Clearing House (ACH) withholding method with fixed daily, weekly, or monthly payments. Lenders are able to withdraw a predetermined amount from you business’ bank account. The less common, but just as efficient, method is through a lockbox agreement. This process is a little more involved as all of a business’ daily credit and debit sales are deposited into a lockbox account with the lender withdrawing a predetermined repayment amount.

Deciding if an ACH Business Loan is Right for You

Many business owners feel ashamed when it comes to applying for some sort of financing, but not to worry. Almost all successful businesses have reached out for additional working capital at one point or another. In fact, many businesses that are doing incredibly well obtain additional working capital through a business loan for continued growth and expansion. Here are a few steps to take in order to decide if an ACH Business Loan is right for you.

Identify Your Business’ Needs – First things first, why does your business need a loan in the first place? Sit down with your core staff members, financial advisors, or simply yourself to determine your business’ needs and how a quick business loan could help. Do you need to purchase inventory, hire additional staff, catch up on bills? Having a plan of execution once the loan is acquired is essential for success, as well as a plan for paying the loan back.

Do the Due Diligence – You may hear the phrase, “do the due diligence” a lot when researching quick business loans. In simpler terms, this means doing the necessary research before applying and accepting an offer with a lender. There are thousands of lenders and brokers out there – traditional and alternative. Don’t take everything at face value. Learn as much as you can about each lender you are interested in, compare pricing, read reviews, ask questions, and follow your gut if something just doesn’t seem right. You have the right to protect yourself and your business. The last thing you want to do is put your business in more of a financial bind or have setbacks. Research and knowledge is key. Do your due diligence.

Choose the Best Quick Business Loan Option – Maybe you did this when identifying why your business needs a quick business loan, but it’s a good idea to confirm again the type of loan product your business truly needs. Could your business benefit from an SBA Loan, Term Loan, Startup Loan, or something else? Speak with your chosen lender to go over all of your options and get a better understanding of how everything works.

Find Out What’s Needed To Qualify and Apply – All lenders have different business loan qualification guidelines. Depending on your business’ financial standing the amount of money you are looking to obtain, the documentation needed to be presented with an approval will vary. It is a good idea to at least have your last six months of business bank and credit card processing statements available, as well as additional financial documents like P&L and Balance Sheets and tax returns easily accessible.

What is the Application Process for an Ach Loan Like?

loan application | Excel Capital Management

Typically, most lenders that offer ACH Loans require minimal paperwork in order to present your business with an offer and approval. As mentioned, your business’ bank account can even be funded in as little as three business days! Here is a list of items to have ready when applying:

Completed application provided by your chosen lender

Four months of recent business bank statements

Four months of recent credit card processing statements (if your business accepts credit cards)

Clear copies of identification for all business owners
Voided check for the business bank account that is to be funded

*additional documentation may be requested prior to funding*

How An ACH Loan Can Help Your Restaurant or Bar:

While it is a trendy and thriving industry, owning and operating a bar or restaurant isn’t so simple. The business is constantly growing, changing, and will forever be one of the most competitive. These issues on top of the fact that business owners of all kinds will inevitably run into some financial hurdles overtime can be overwhelming to think about. So what do you do when your bar or restaurant is in need of working capital to fix cash flow issues? What do you do when the traditional big banks decline your business loan application? There are options. Introducing the ACH Cash Advance and ACH Loan or Unsecured Business loan.

As mentioned, all business owners will be in need of working capital at some point over their business’ lifetime. Whether additional funds are needed to fix your bar or restaurant’s cash flow issues during a slow period, train new wait staff, hire more bartenders, purchase inventory, or repair kitchen appliances, A quick Business loan can help. Two popular reasons many bar and restaurant owners reach out for capital is due to the turnaround of employees and the fact that their business may be cyclical.

For instance, employees in the bar and restaurant industry do not tend to stay at a job very long due to constantly looking for additional or better work opportunities. It’s a fast paced industry that many work in on the side to make extra cash. The causes many issues for business owners who can’t compete with other bars or restaurants that pay better. Additional capital could help you to give deserving employees a raise or promotion. Similarly, many bars and restaurant are cyclical, meaning they are open 2 to 4 days per week. Thus, generating enough revenue to pay rent for the business and cover expenses and payroll can be tough.

To acquire working capital from a traditional bank via a business loan is no easy task. BIg banks require lengthy applications, lots of paperwork, and tend to take a few weeks for processing and an approval or decline. Not to mention, due to the unsteady industry, an approval can be even more difficult to receive. (Check out our recent blog, “Why Business Loans Declined For 3 Reasons” for more on that).

Luckily, alternative financing is available, and the most popular financing solutions tend to be the Merchant Cash Advance or ACH Loan. The primary purpose of a Merchant Cash Advance or ACH Loan is to service the financial needs of small to medium sized business owners. Unlike traditional business loans, funds from a cash advance or ACH Bank Loan disburse in as little as three to four business days. They do not require a minimum credit score to qualify, therefore, many rising businesses or businesses that run into a rough patch over the years opt to use this financing solution.

Another benefit is that Merchant Cash Advances or ACH Bank Loans do not require any collateral to qualify, so business owners who have little to no collateral (or poor credit or limited business history) to offer can rest assured that nothing will be taken from them. Finally, since ACH Cash Advances and ACH Bank Loans do not necessarily have fixed payments, business owners who run into financial troubles over time do not carry the burden of large monthly payments, balloon payments and do not accrue over time (since they are classified as a purchase of future sales at a discount).

When it comes to paying back your ACH Cash Advance or ACH Loan, there are two common collection processes. With a Merchant Cash Advance, payments come from a set percentage of credit and debit sales. With ACH Loans (this financing product is typical for businesses that do not accept credit cards or want a set repayment schedule) the collection process is done through the Automated Clearing House (ACH) process. collection process is through the Automated Clearing House withholding method with fixed daily, weekly or monthly payments. This method allows the lender to withdraw a predetermined amount from your business bank account. Lastly, a lesser common method of collection is through a lockbox agreement. With this method, all of a business’s daily credit and debit sales are deposited into a lockbox account, in which the agreed upon repayment amount is removed by the lender.

Guest Blog presented by Kabbage: How Fintech Has Helped the Small Business Lending Industry Grow

April 19, 2017September 1, 2016 by Nathan Abadi

How Fintech Has Helped the Small Business Lending Industry Grow | Excel Capital Management | Kabbage

It is amusing the way popular art often foreshadows or even predicts the future. Science fiction movies focused on space travel long before the first probes were sent to explore the galaxy, and self-driving automobiles were part of novels on the future long before they even became a possibility. Perhaps the best example of popular culture accurately predicting the future happened in 1984. The movie “Revenge of the Nerds” depicted a ragtag crew of science geeks getting revenge on the jocks and popular kids at their school.

Today, as foreshadowed in the movie, nerds indeed have taken over the world. From one of the wealthiest men in the world, Bill Gates to the domination of the geek and nerd driven internet, the nerd now is in global positions of power. These same nerds, while long in the institutional financial space, have decided to shift their focus to the retail financial sector.

The Emergence of Fintech

Fintech has capitalized on the relationships that can be formed between finance and technology to drive innovation for everyone from businesses to everyday consumers. Whether it is having the capability to access a bank account on a tablet or paying for an in-store product with a mobile phone, these ties formed between finance and technology are the epitome of fintech.

The so-called fintech industry is targeting a treasure chest of over $4.7 trillion once dominated by old school players. Following in the footsteps of the other disruptive nerd driven technology, the fintech sector is on fire in regards to growth. The sector drew $12 billion investor dollars in 2014, an over 40% increase from the previous year.

Within the retail financial sector, small business lending, personal loans and loans for professionals have already been radically improved by the growth of fintech. This is not just speculation about the future – every day, small business owners are taking advantage of the new world of lending powered by the fintech revolution.

Fintech vs. Traditional Lending

The fintech revolution has the traditional institutions very concerned. Jamie Dimon, JPMorgan Chase’s CEO, warned in his investor letter that “Silicon Valley is coming.” Jim Marous wrote in The Financial Brand, The impact of digital technology and the digital consumer is transforming the way consumers access financial products and services. Beyond simple transactions, such as checking balances, the intersection of finance and technology (fintech) is impacting virtually all categories of financial services at an increasing rate, reshaping the industry’s status quo.

Backing up his contention, Marous cited, Results from a PwC survey, ‘Blurred Lines: How FinTech is Shaping Financial Services’, found that the majority of survey participants see consumer banking and fund transfer and payments as the sectors most likely to be affected over the next five years. The report included responses from 544 CEOs, Heads of Innovation, CIOs and top management involved in digital and technological transformation across the financial services industry in 46 countries.

While these projections and warnings remains premature, it is a tell as to what the future holds for the overall financial sector from the fintech revolution. Truth be told, the fintech lending space remains a tiny part of the overall lending industry. One example of the size differential could be considered with $9 billion in loans funded by a fintech firm. While $9 billion is a tremendous amount of money, it is peanuts compared to the total loan volume. Even just compared to the $885 billion in total credit card debt outstanding in America, it is like a flea on an elephant’s back.

An Analysis of the New Lending Industry

Traditional institutions stand to gain from the growth of fintech. Fintech has accelerated the growth of the small business lending sector in multiple ways. First, and perhaps most critically, fintech has lowered the cost of making loans for the lender. These savings can then be passed down to the borrower, creating a less-expensive product. Lending costs have been slashed by cutting out physical branches, legacy IT systems and burdensome regulations, allowing a more direct connection with the borrower.

Also, by moving the application process to the internet, additional costs can be cut from no more physical paper application processing. For example, the standard loan cost for a traditional lending institution is 5-7%. Fintech lenders can cut this number down into the 2% zone.

Next, fintech has opened up an entirely new clientele for business lenders. Due to a lack of pertinent data and ways of processing it, traditional small business lenders are forced to rely on the old fashion ways of approving borrowers. The old style approval process takes into account credit score of the business and owner as well as the collateral to secure the loan.

The new fintech small business lending firms consider hundreds of data points, often in real time, to make credit decisions. This practical use of big data enables the new wave of fintech small business lenders to make loans that were previously impossible by traditional means. Credit-worthy customers may not have the collateral or perfect credit score to qualify at a bank for small business financing. However, the new wave of fintech small business lenders can be secure in making these once impossible loans.

Finally, fintech is in the process of creating a more stable credit environment. The reason for this is the simple fact that banks rely on borrowed money to fund loans whereas fintech small business lenders use investor’s money directly to fund loans. This helps eliminate the inherent risks of borrowing to lend.

Wrapping things up, as you can see, fintech has revolutionized the financial industry and online business lending in particular. Although fintech remains a tiny part of the overall financial sector, it is rapidly growing. Using big data and high-speed processing computers, fintech firms can make loans that were once considered impossible by traditional lending institutions. In the process, fintech is super-charging the small business lending world with growth and new possibilities.

Kabbage is the industry leader in providing working capital online. Kabbage is dedicated to supporting the small business community and has funded more than $1.6 billion to help business grow.

Small business loans for non profit organizations

February 19, 2020July 22, 2016 by Simon Reed

Alternative Funding Options for Nonprofit Organizations | Excel Capital Management

Unlike businesses that strive to make a profit for their owners, nonprofit organizations pride themselves in serving their respective communities and putting all money back into their cause. Although, the end goal may be a little different from regular businesses, nonprofit organizations still face the same financial issues. Like traditional businesses, nonprofit organizations must deal with tracking revenue, expenses, hiring and training personnel, equipment and supply purchases, and ultimately, need some working capital here and there.

While applying for a traditional bank loan may be the obvious solution, it may not be the most feasible one. Traditional bank loans require a hefty amount of paperwork, a tedious application process, and a lengthy wait period when it comes to receiving an approval or unfortunate decline. Alternative lenders offer a faster and easier solution. Typically, all that is needed to receive an offer in as little as three business days is a simple, one-page application, four months of recent business bank statements, and four months of recent credit card processing statements (if applicable). That’s it! Let’s take a look at a few alternative funding solutions for nonprofit organizations and how they can be used to grow and expand your organization.

The beautiful part about acquiring working capital as a source of funding for your nonprofit organization is that the money can virtually be used for anything – as long as it pertains to the business. Here are a few examples:

Hiring & Training Personnel: As with any business, hiring and training the right personnel is essential to running a successful nonprofit organization. Maybe you need to hire a receptionist or accountant to help out with the books. Maybe you need to train existing personnel on new procedures.

Purchases & Expansion: Whether you need to purchase new inventory and supplies, repair equipment, open an additional office or location, or simply take care of a few bills and expenses, working capital acquired through one of the many alternative funding solutions available to nonprofit organizations can make all of these things happen easily.

Cash Flow Issues: Juggling bills, payroll, and unforeseen expenses for a nonprofit organization can cause some cash flow issues. Grants may flow in via uneven lump sums, contracts might not be renewed, and reimbursements for services rendered may take weeks to hit your nonprofit’s business bank account. Additional capital may be the solution needed to get everything back in sync.

Working Capital can cover the costs of all of the above and much more! For more information on funding options for your nonprofit organization, you can also call (877)880-8086 to speak directly to one of our funding specialists or APPLY NOW!

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Farm equipment financing programs compared

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Tractor financing for new and used farm machinery

Farm equipment leasing

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USDA loans that can help finance farm equipment

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FSA Operating Microloans

Farm Storage Facility Loans

Farm Ownership Loans and beginning-farmer assistance

SBA loans and other programs available to farms

Where SBA 7(a) and 504 financing may fit

USDA Rural Energy for America Program

NRCS conservation assistance and state programs

Farm equipment financing rates and a payment example

Illustration: financing a $100,000 equipment purchase

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How to apply for farm equipment financing

Farm equipment financing FAQs

What equipment can a farm finance?

How long can you finance a tractor or other farm equipment?

Can you finance equipment bought at auction?

Can a new farmer get equipment financing?

Are USDA farm equipment loans grants?

Is buying better than leasing?

Where can I find farm equipment financing near me?

Plan the equipment purchase before choosing the loan

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Floor plan financing calculator

Your financing cost

How it affects your cash flow

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Semi truck financing is best suited for:

Three ways to fund your next truck

Equipment financing

Term loans

SBA financing

Semi truck payment calculator

Finance the truck.Plan for the miles ahead.

How Excel reviews a truck purchase

Startup or first-time owner-operator

Existing trucking business

The truck price is only part of the budget

New vs. used semi truck financing

Semi truck financing requirements for established carriers

Operating history

Business cash flow

Credit profile

Cash contribution

Equipment details

Closing documents

Can a startup or first-time owner-operator qualify?

Owner and business plan

Down payment and reserves

The truck and seller

Bring the truck details. Know your budget.

How much down payment do you need for a semi truck?

Used semi truck financing

Owner-operator truck financing

Plan for the full setup

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Financing multiple semi trucks

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Semi truck financing with bad credit

Semi truck financing FAQs

Can I finance a used semi truck?

What credit score is needed for semi truck financing?

Can an owner-operator finance a first truck?

Finance the truck.
Plan for the miles ahead.