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How to Get a Home Based Business Loan: 5 Options

HOME BASED BUSINESS LOANS

Getting the funding you need for a home-based business can be challenging.

In addition to the challenges of starting a home-based business– applying for licenses, filing taxes– acquiring business capital to start, grow, or expand your business is a process all in itself. You may find you self asking your self how to get a loan for a home based business?

Many small companies usually start as home-based businesses. It is at this stage where the owner lays the foundation for their future business. It’s also the stage where owners face their biggest challenges.

Aside from getting clients, one of the biggest challenges for business owners is finding financing. Unfortunately, home-based businesses have few financing options. Many banks look down on this type of funding but we have some options for you.

That’s where home-based business loans comes in.

Fortunately, there are several programs available when it comes to home-based business financing, each with different advantages.  Read on to find out more.

Obtain fast funding for your home-based business. Apply with Excel Capital: Apply Now

5 Home Based Business Loan Options

Home-based business loan options for small business owners.

1. Equipment Financing

Equipment financing helps 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.

2. Split Funding / Merchant Cash Advance

Split funding, also referred to as a merchant cash advance, works on a “pay as you earn” model.

It is important to know that Split Funding is not a loan. Instead, a flat percentage of your business’ credit and debit sales are automatically debited daily and put towards the repayment of your loan.

If your business does a large amount of sales one day, a larger payment is taken out to pay back the advance. If a small amount of sales is done that particular day, you pay less. There is no fixed payment amount or maturity date. This type of funding is available only to businesses that accept credit card payments.

3. Short-term Loan

Short-term loans are used as a way to fill an immediate financial needs and fix cash flow issues.

Most lenders that provide this type of loan do not require a lot of paperwork and they can be used for virtually any business purpose.

Common uses of short-term business loans are inventory purchases, new hires and employee training, equipment repairs, and filling gaps between accounts payable and receivable. This financing solution mean shorter having a shorter repayment schedule with higher costs. Short-term business loans are generally paid back via weekly ACH payments.

In contrast, traditional term loans are paid back within a fixed term and a set interest rate. While traditional term loans allow you to build business credit and have fixed monthly payments, they come with less flexible terms and rates and penalties may be charged if the loan is paid off early.

4. ACH Loan

ACH loans typically require personal guarantees, and have a fixed repayment schedule that is paid either daily, weekly or monthly. 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, purchasing equipment, or almost anything else for your business, this funding solution can be extremely beneficial.

Unlike traditional business loans, funds from an ACH Business Loan disburse in as little as three business days 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.

5. Business Line of Credit

A business line of credit is a rotating loan,  also known as a “LOC,” 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.

There are two types of Business Lines of Credit:

1. Unsecured Business Line of Credit

Unsecured business lines of credit do not require borrowers to pledge any assets as collateral.

As a result, this tends to be a more popular type of business credit line to business owners. However, they are much more risky for the lender, therefore your credit score must be excellent.

In addition, they tend to be smaller with higher interest rates.

2. Secured Business Line of Credit

A secured business line of credit requires business owners to put up assets as collateral in order to obtain the loan.

While lenders do not typically require business owners to pledge assets like property, they will require the collateral in the form of inventory, accounts receivables, and more. Consequently, if you are unable to pay back the loan, your lender will seize your collateral in order to pay the balance.   

Both secured and unsecured business lines of credit will require your business to be in good standing.

Lenders typically prefer to work with businesses that are well-established and in good financial standing, thus proving to the ability to pay back the loan. Depending on the lender, various financial documents will be requested to support this.

Get the capital your home-based business needs. Apply for an unsecured business line of credit with Excel Capital: Apply Now

How to Get a Home-Based Business Loan: What Do you Need to Get Approved?

One of the benefits that come with alternative lending is a fast application and approval process.

Business owners don’t need to fill out or submit  mounds of paperwork, or have to wait months to receive an approval or decline. Once a business has been approved, they can be funded in a little as a week.

The initial documentation is typically enough to get funding, 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:

  • One-page application
  • Voided check (for your business account)
  • Copies of identification for all owners
  • Proof of ownership Last filed Tax return , By laws for corporation or Articles of Organization for and LLC
  • Proof of EIN – If you do not have a tax return most funders can use a EIN letter or SS4 Letter along with proof of ownership
  • Three months of bank statements
  • Aging AR report if your in an industry where you have billing net 30-90

While not everything may be requested, the more the better here. Getting your documentation ready ahead of time will also speed up the time to fund, allowing you to get the capital you need ASAP.

Acquire a Home-Based Business Loan with Excel Capital

Finding funding for a home based business can be tough.

However, at Excel Capital, we strive to make obtaining funding easier and more convenient for small business owners in need of capital.

The application process is quick and, if approved, you could obtain funding in as little as 24-48 hours.

Click below to start your application:

Apply in minutes, get fast funding for your home-based business: Get Started

Construction Business Loans: Get the Funding Your Business Needs Today [2024 Guide]

EXCELCAPITAL - CONSTRUCTION BUSINESS LOANS

Construction Business Loans: Everything You Need to Know

As a  general contractor, you know that obtaining construction business loans is important to running a construction business and operating in a fluid fashion.

Full payment for a project does not typically come until at least 90 days after the project start date, but construction costs don’t wait around,  which makes construction loans a necessity to function.

When a new job is taken on you receive a small down payment upfront as well as progress payments or tiered payments as the job hits certain milestones. This delayed payment structure makes obtaining construction business loans crucial to maintain positive cash flow. 

Because of this structure, contractors need to come out of pocket for many expenses such as: 

  • Payroll
  • Material Costs
  • Insurance
  • Equipment 

Contractors know that obtaining funding is the solution. But what do you do when you can’t be approved– or can’t wait– for a traditional bank loan? 

Why Take Out a Small Business Loan Instead of Going to Your Local Bank or Traditional Lender?

construction business loan quote

It’s all about timing.

Most banks and traditional lenders (such as SBA loans) take way too long on loan approvals. And even if you try to avoid the timing issue by planning when you need it, many contractors that apply for construction financing with their local bank find that they can’t be approved without collateral.

Banks use traditional underwriting practices, which places the commercial construction industry in a high-risk bracket. That means you’ll need to have something to put down to secure the loan otherwise you’re not likely to be approved.

However, this needlessly puts you at additional risk on each and every job. Not to mention, puts you under extra stress that you don’t need. 

Alternative lending offers a way around these strict requirements and gives business owners a path forward.

At excel we’ve worked with hundreds of construction business owners to offer unsecured loan options that give you the funding you need while affording the flexibility to get approved without having to put down hefty collateral.

Short application, get approved in as little as 24-48 hours: Apply Now

Types of Construction Loans: Alternative Loan Options

So, what are your options for construction loans?

Well, you’ve got a lot. And it all comes down to what you need the funds for and what type of loan fits your business and the types of construction projects you take on.

As mentioned above, no matter what you need funding for, there are several working capital loan options available. However, some construction loan options are designed for specific needs while others are more general.

Let’s break each down individually to give you a better idea of which might be a good fit for you:

1. Equipment Financing

Equipment financing is used to help you purchase whatever equipment your business needs to run smoothly.

The loan amount is dependent upon the type of equipment the borrower needs, as the repayment term is usually as long as the expected life of the piece of equipment.

2. Invoice Factoring

Invoice factoring is used for short-term cash flow issues, especially when your business doesn’t qualify for a traditional bank loan or any other alternative solution. That’s because it depends less on your credit score and more on other business factors such as your accounts receivable.

The lender will factor your business’ customer’s invoices to match your working capital needs.

This type of program is rarely used for contractors since progress payments cannot be factored. Factoring companies only use invoices for work complete. In the construction business, it typically happens this way.

3. Unsecured Business Loans

Unsecured business loans were designed for business owners to enjoy the benefits of a merchant cash advance who do not accept credit cards at there business. Most contractors do not receive credit card payments – and even if they do its typically a very small percentage of the annual gross sales.

This works as a purchase of future sale at a discount that is converted into a set payment. This payment is remitted via ACH usually daily, weekly or monthly. 

This allows you as the borrower to get construction loans without any collateral, just your sales. It also requires a lower credit score compared to traditional lending for the same reason.

4. Merchant Cash Advance

For those of you who accept credit cards at your business, split funding, or a merchant cash advance, is a construction business loan based on a purchase of your future credit card sales at a discount.

Payments are collected at a set percentage of your credit card sales, which is nice because that means when business is down– so are your payments. And when there is no business– no percentage.

For that reason, this method really helps during a particularly volatile market or rough patch in your construction business.

It also doesn’t have a stringent a credit score requirement due to factoring in your credit card sales more than anything else. 

5. Term Loans

Our fourth construction business loan option, term loans have a set repayment schedule and interest rate and mature between 1 to 10 years depending on the term of the loan. Most commonly being short-term loans which offer a quick lump sum of cash with a short repayment date. 

However, keep in mind that a short-term loan, or any other term loan, requires financial statements as well as 2 years of business history and one filed tax return.

6. Business Lines of Credit

A business line of credit is a rotating line of credit which you can dip into whenever the business needs it most.

Similar to a credit card, so long as you pay off your balance you can continue to use that line of credit continuously. Interest is then only paid off the amount that is used.

7. Asset-based Lending

Lastly, with asset-based lending, the assets of a business, such as inventory, accounts receivable, and other balance-sheet assets are used as collateral.

Plus, because this financing type is secured with collateral, interest rates tend to be low and credit score requirements are lower as well. Having applicable collateral also makes an asset-based loan easier to obtain.

Complete our short application and get approved fast:Apply Now

How to Get a Construction Loan: How Do Construction Loans Work?

how to get a construction business loan

Ultimately, it’s up to you to do your research and find out what your best small business loan options are.

It’s your business and no one is going to look out for it like you will, so take the necessary steps to educate yourself and then take action to obtain the funding your business needs, whether that’s to keep things afloat or to take things to a whole new level.

Whatever the case, don’t let a lack of funding hold your business back from realizing it’s potential.

To apply for a construction business loan with Excel Capital, only four things are required:

  1. Four months of recent business bank statements
  2. Four months of business credit card processing statements
  3. A one-page application
  4. And just a few minutes to get started

We’ve made the process of getting a small business loan simple and straightforward so you can get back to what is most important– running your business.

Once everything is received, you can be presented with an approval, your loan terms, and funded in as little as one business day– that’s right, just 24 hours.

Get the funding your contracting business needs by completing our short, 2-minute application.

Excel Capital Helps Contractor Marty Secure a Loan: A Case Study

While the construction business is one of the oldest, most flourishing, and most competitive industries around, there comes a time when many of its business owners need access to working capital.

The cost of equipment, materials, payroll, and slow turn-around rates trump the cash flow coming in, and many construction company owners find themselves weighed down by bills and overhead costs.

Since the great recession of 2008, a traditional bank loan is no longer the go-to solution when it comes to acquiring capital.

That old-school way of doing things sometimes ends in heartbreak due to waiting weeks just to receive an answer. That’s where the alternative financing industry comes into play.

With financing solutions such as the ever-popular merchant cash advance, ACH loan, asset based loans, equipment financing, and more, access to working capital is easier than ever.

Funding Needed Fast

Recently, Marty, a construction company owner from Georgia reached out to the Excel Capital team.

Marty was in a crunch. He needed funds– and he needed them fast.

With a handful of projects on his plate, along with receivables due on a large ongoing project not being paid on schedule, Marty asked us for working capital to be used towards the purchase of materials, equipment, licensing, and payroll.  

Marty’s workers and office employees needed to be paid and materials needed to be purchased. So, waiting for payouts was not an option.

In order to get things back on track, as well as to generate new growth, Marty asked our sales rep, Jordan for help in securing an ACH loan. A short term funding product, an ACH loan is paid on a daily or weekly basis by direct ACH debits.

Marty had close to $200,000 tied up in projects which wouldn’t come in for at least thirty days, plus roughly $150,000 in retainage for completed contracts. However, that was going to be payed out over six months.

He also had both a $2 million and a $1.5 million contract on the table respectively (both carrying a 20% gross profit), but those were not set in stone.

Marty’s company had no time to wait with other projects lined up and needing to be completed soon. However, they couldn’t be completed unless he had the means to hire more workers and purchase new machines to keep up with the timelines in place.

Marty Joins Forces with Excel Capital

To the Average Joe, these type of accounts receivable amounts seem amazing, but in the construction business, we know this revenue doesn’t always reflect the tangible finances.

Most, if not all, of the money is put back into the company to complete ongoing projects.

Whether Marty could wait until his own payday or not– he needed working capital now.

After supplying us with bank statements, a business lease, his driver’s license, and a few other minimal stipulations, we were able to get Marty $80,000 in working capital in a matter of only two days!

The daily repayment amount was only $400, an ACH automatically debited (so Marty wouldn’t have to worry about making any large monthly payments, he could focus on his projects at hand) which would happen over the course of 12 months.

It was as simple as that! No hassles or phone calls from banks, just fast funding, easy communication, and transparent terms. And, most importantly, peace of mind.

Get a General or Commercial Construction Loan with Excel Capital

At Excel Capital, we know that getting the funding you need is critical to completing bigger and bigger jobs and keeping your business going.

Reach out to the Excel team to find out if you qualify for a construction loan as well as to discover your options.

Apply for a construction business loan from Excel Capital: Get Started

Motel loans: What funding options are best for Hotels, Motels and Bed and Breakfasts.

Motel Financing: How to Obtain the Working Capital You Need | Excel Capital Management

Owning and operating a motel business is no easy task whether you have one location or are in charge of a franchise. Keeping up with trends and the constant competition among other motel and hotel chains can be quite difficult at times, and some additional working capital may be needed to keep up. When it comes to applying for financing help, many motel owners have a tough time going the traditional route. Traditional banks and lenders tend to list motels as high risk for various reasons such as seasonality, low numbers of  guest bookings, negative reviews, lack of collateral to pledge when obtaining financing, and more. These concerns are all justified, but it’s not the end of the road. There are many alternative funding options available to motel business owner. Let’s take a look!

Motel Financing Options

Split Funding aka Merchant Cash Advance: Short-term financing 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.

Split Funding aka Merchant Cash Advance: Short-term financing 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.

Equipment Financing: Equipment Financing is a loan product 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.

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.

What Can Working Capital Acquired via Motel Financing Be Used For?

wealth | excel capital managementWhat’s great about all of the aforementioned motel financing options is that the working capital acquired through any of them can be used for virtually anything as long as it pertains to the business. Whether your motel has hit a rough patch and you need the capital to fix cash flow issues, or business is booming any you want to grow bigger and better, you can use it! Here are just a few popular working capital uses among motel owners:

– Business Expenses and Tax Payments

– Payroll and New Hires

– New and Additional Locations

– Equipment and Supplies

Three Crucial Steps to Take Before Applying for Motel Financing

motel | excel capital management

As you would assume, there are many, many alternative lenders out there who can promise you the world when it comes to your motel financing needs. While most lenders and brokers out there are good guys, it is in your best interest to be cautious and to ask questions. Before you sign anything, make sure you fully understand the business funding solution you are applying for, how it works, and what the overall cost will be – literally and figuratively. Here are three crucial steps to take before you apply:

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 advisers, 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. Speak with your chosen lender to go over all of your options and get a better understanding of each financing option and 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.

The Application, Approval, and Funding Process

The great thing about motel financing is that the application, approval, and funding process is quick and simple. Generally, lenders that provide these financing options only require a simple, one-page application, four months of recent business bank statements, and four months of business credit card processing statements to get started. Once these pieces of documentation (and maybe a few others) are received, you can be presented with an approval and funded in as little at three business days!

For more information on motel financing options, contact one of our funding specialists today at 877-880-1106 or APPLY NOW! 

Hard Money Business Loans and How One Can Benefit Your Business

Hard Money Business Loans and How They Can Benefit Your Business | Excel Capital Management

If you’re a small business owner, you most certainly are aware of the many reasons why you, or any other entrepreneur for that matter, might need a small business loan. The reasons could range from office renovation, purchasing new inventory, up-dating computers or other equipment, or paying unforeseen taxes and other obligations. Or, maybe business has been so good for you that you found yourself shorthanded and need to hire more people, but don’t have the cash on hand to cover the cost of adding personnel.

For small businesses, just as in any other business, cash is king. Having sufficient operating capital can mean the difference between growing your business and simply standing still. In some cases, it could even be the difference between great success and utter failure. Many small business owners, in the early stages of operation, may not have thought that they could get a loan to keep them going until they prospered. Seasoned business owners could have mistakenly assumed that the only place they could go for a business loan was the banks, and they wouldn’t be successful. Even thriving businesses are recognizing that they could benefit from an influx of cash, and these types of loans could be the answer to their problems. Not to worry! There are options. Consider a Hard Money Business Loan.

What is A Hard Money Business Loan?

document | excel capital management

 

Hard Money Business Loans are a viable alternative to bank loans for providing necessary capital to companies that may be under-capitalized, growing rapidly, in the middle of a turnaround, or highly leveraged. In many cases, a small business might just require a cash infusion for preventing their growth from coming to a standstill or for getting over a financial hurdle. Using your business’ assets could be the key to obtaining the working capital needed for inventory, equipment repairs and purchases, or anything else your business may need. In short, you would be borrowing against your future business income, therefore, gaining access to that revenue sooner rather than later.

 

 

 

 

 

 

What Can a Hard Money Business Loan Be Used For?

The beautiful thing about a Hard Money Business Loan is that the working capital acquired through it can be used for literally anything as long as it pertains to your business. Many small business owners opt to use their loans for:

  • Business Expenses and Bills
  • Cover The Costs Customers Who Fail to Pay On Time
  • Seasonal Slow-Downs
  • To Fix Cash Flow Problems
  • New Hires and Employee Training
  • Inventory and Equipment Purchases
  • Marketing and Advertising
  • Product Manufacturing
  • Office Space
  • Research and Development
  • Unforeseen Circumstances (ie: natural disasters, employee resignations, equipment failure)

 

What Types of Assets Can Be Put Up as Collateral?

auto | excel capital managementHard Money Business Loans, as mentioned, are given to businesses that have shown steady and stable operating history. The business must also possess assets that can be financed and have not been put up as collateral to another lending institution. In addition, the company must not have any serious legal or tax issues which could impact the loan. Here are a few other pieces of information to be aware of:

– Accounts Receivable are the main type of collateral used to obtain an Hard Money Business Loan. Other forms of collateral such as equipment, real estate, inventory, and more can be used depending on the alternative lender’s restrictions and requirements.

– The Hard Money Business Loan amount you are approved for is determined by the value of your collateral/assets. Businesses can generally borrow 75% – 85% of the value of their accounts receivable. If the collateral a business puts up is equipment or inventory, they can generally borrow 50% of the value.

– Most businesses are approved for an Hard Money Business Loan in the amount of $500,000, and this number can exceed well into millions of dollars. Alternative lenders offer far lower interest rates than traditional banks, however, these numbers vary depending on the lender.

 

Applying for a Hard Money Business Loan

You may hear the phrase, “do the due diligence” a lot when researching 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 – who can off your a great Hard Money Business Loan. 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, and you will be ready to move onto the next step.

Generally, regardless of the industry type, as long as your business has decent financial statements, collateral, customers that pay on time, and reporting systems, obtaining a Hard Money Business Loan shouldn’t be too difficult. An added benefit is that this type of funding solution comes with regular fixed payments and lower interest rates compared to a traditional bank loan. This means less worries and more time to focus on your business and its success!  

Typically, most lenders that offer Hard Money Business Loans only require minimal paperwork in order to present your business with an initial 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

Keep in mind, that because this type of loan is asset-based, additional documentation will be required, however, it is still much less than traditional bank requirements.Many Hard Money Business Loans have $750,000 to $1,000,000 in collateral requirements.

For more information on Hard Money Business Loans, contact one of Excel Capital Management’s funding specialists at 877-880-8086 or APPLY NOW!

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

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 – 

4 c's of credit

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

TrakLoans: How They Can Help Your Small Business | Excel Capital Management

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!

3 Reasons Why Applications For Business Loan Get Declined

3 Reasons Why Business Loan Applications Get Declined By Traditional Lenders and Alternative Financing Solutions

Almost all business owners apply for some sort of financing to grow their company at one point or another. When it comes to applying for for this financing through a traditional bank or lender, the process can be a tough one, and many business owners walk away with a big fat decline. While this may be disheartening, there are many reasons why business loan applications get declined and lenders are so strict, and there are still other options out there. Let’s take a look at the three main reasons why business loan applications get declined by traditional banks and lenders, and then take a look at the great alternatives that are available!

Why Traditional Lenders Decline Business Loan Applications:

  • Low Cash Flow: If a traditional lender decides to give your business a loan, they will want to see the ability to make payments back on the loan amount in addition to covering all other business expenses. Unfortunately, tough times do occur where businesses don’t generate enough revenue at certain times of the year – maybe they are a seasonal business. Some business owners, such as contractors, aren’t paid until jobs are completed or they must pay inventory suppliers upfront before they get paid. Tight margins typically do not sit well with traditional lenders and you could get your business loan declined.
  • Poor Credit, Bad Credit, or No Credit: Like NorthShore Advisory Inc. Credit Expert Tracy Becker told us in our exclusive interview, “in today’s fast-paced business world, more partners, lenders, and potential accounts need to make quick decisions as to which suppliers, borrowers, and partners they want to work with; decision-makers use a variety of business credit scores, indexes, and reports to discard unqualified candidates from being considered for a partnership or a loan.” A business’ credit score is a major factor when a traditional lender considers approving them for financing. Poor credit, bad credit, or simply no credit can almost always guarantee a decline. To learn more about how businesses can improve their credit score, visit: http://www.northshoreadvisory.com/
  • No Collateral: Traditional banks and lenders almost always require some sort of collateral to secure a loan. Collateral can come in the form of a vehicle, personal or business property, equipment, and/or other assets. If a business owner defaults on the loan, this collateral will then be seized for nonpayment. Unfortunately, many business owners (especially young business owners or startups) do not have collateral to put up when it comes to acquiring a loan, or the lender may not deem anything the business owner has as anything of value.

Your Business Loan Application Got Declined By A Traditional Lender – What Are The Alternatives?

Despite the fact that traditional lenders can take weeks to process your loan application and also require a lot of paperwork, there are alternative financing solutions available if you got your business loan declined. Unlike big banks, alternative lenders typically only require you to submit a simple, one-page application, 4 months of recent bank statements, and 4 months of recent credit card processing statements in order to get an offer and approval in a matter of days! Let’s take a closer look at the alternative funding solutions available to your business so even if your business loan was declined your options are open!

Merchant Cash Advance: Short-term financing 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 business’s credit card processing sales. These are usually only guaranteed by the future sales of your business.

ACH Advance: A form of a merchant cash advance that is repaid on a daily basis by direct ACH debits rather than a merchant account.   These are still a purchase of receivables and the amount debited via ach are determined by the amount of credit card processing sales that are batched out the previous day.

ACH Loan Products: These are a bit different than cash advances as they are considered loans and may have personal guarantees. They 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.

Accounts Receivables Financing: This is one of the oldest forms of funding in history. This is used mainly when a business is due some sort of capital for work complete and is billed on a net 30, 60 or 90. for example, ABC Trucking delivered goods for xyz logistics but only receives payment from xyz logistics in 60 days. ABC can then factor the money due from XYZ at discount to receive the capital due in 60 days today.

Invoice Factoring: The purchase of accounts receivable for immediate cash.

Equipment Financing: A type of loan or extension of credit to a business, with the purpose of helping the business acquire new equipment. Equipment Financing Extends only the capital needed to purchase a specific piece of equipment and is most commonly written as a lease.

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.

Start-Up Funding/Loan: A type of loan that provides a new business/company with sufficient upfront capital to get off the ground.

Asset Based Loans: A business loan secured by collateral.

SBA LOANs 504 Loans: The US Small Business Administration 504 Loan or Certified Development Company program is designed to provide financing for the purchase of fixed assets, which usually means real estate, buildings and machinery, at below market rates.

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.

It’s pretty clear to see why an alternative lender may be the way to go when it comes to applying for financing for your business. No complicated application process, no lengthy paperwork and documents, and an approval in as little as 3 business days! For more information on alternative financing solutions and what Excel Capital Management can offer your business, visit: https://www.excelcapmanagement.com/loan-form/

How A Business Loan Helped a General Contractor in a Crunch

How A Business Loan Helped a General Contract in a Crunch

While the construction business is one of the oldest, most flourishing, and most competitive industries around, there comes a time when many of its business owners need access to working capital. The cost of equipment, materials, payroll, and slow turn-around rates trump the cash flow coming in, and many construction company owners find themselves weighed down by bills and overhead costs. Since the great recession of 2008, a traditional bank loan is no longer the go-to solution when it comes to acquiring capital. That old-school way of doing things sometimes ends in heartbreak due to waiting weeks just to receive an answer. That’s where the alternative financing industry comes into play!

With financing solutions such as the ever-popular Merchant Cash Advance, ACH Loan, Asset Based Loans, Equipment Financing, and more, access to working capital is easier than ever! There is no longer a stigma with taking a loan or any type of financing. Working capital is essential when it comes to growing a company of any kind, especially a construction company. Due to the cost of machines and equipment sometimes reaching well into hundreds of thousands of dollars, or the burden imposed by having contractors absorb the upfront costs when starting a job – such as the cost of construction materials like granite and wood – and not to mention, insurance costs and payroll for workers and employees, construction company owners should expect to reach out for capital at some point in their business’s lifetime. Some companies choose to do this more than once, and why not? If working capital is increasing your cash flow and allowing you to take on more jobs, it only makes sense to ask for more. Afterall, the goal most of us strive for is to ensure steady work flow and income for years to come.  

Recently, Marty, a construction company owner from Georgia reached out to my company, Excel Capital Management. Marty was in a crunch and in need of funds, and he needed them fast! With a handful of projects on his plate, along with receivables due to a form on a large ongoing project  not being paid on schedule, Marty asked us for working capital to be used towards the purchase of materials, construction equipment, licensing for projects to be completed, and payroll.  As you know, only a small fraction of projects pay upfront and most only payout in tranches after certain milestones are hit at. When workers and office employees expect to be paid, and materials need to be purchased, waiting for these payouts is not an option. In order to get things back on track, as well as to generate new growth, Marty asked our sales rep, Jordan Lindenbaum, for help in securing an ACH Loan Product – a short term funding product  paid on a daily or weekly basis by direct Automated Clearing House debits.

Marty’s situation was a tough one! He was owed close to $200,000 which was tied up and not coming in for at least thirty days, plus around $150,000 in retainage for completed contracts,  however, that was going to be payed out over six months. He also had both a  $2 million and a $1.5 million contract on the table respectively (both carrying a 20% gross profit), but those were not set in stone. Marty’s company had no time to wait with other projects lined up and needing to be completed by early 2016, however, they couldn’t be completed unless he had the means to hire more workers and purchase a few machines to keep up with the timelines in place. Obviously, without the aforementioned payouts, he was in a bind. To the Average Joe, these type of accounts receivable amounts seem amazing, but in the construction business, we know this revenue doesn’t always reflect the tangible finances. Most, if of not all, of the money is put back into the company to complete ongoing projects. Whether Marty could wait until his pay day or not – he needed some additional working capital, now.

After supplying us with a few bank statements, a business lease, his driver’s license, and a few other minimal stipulations, we were able to get Marty $80,000 in working capital in a matter of only two days! The daily repayment amount was only $400 per day – an ACH automatically debited (so Marty wouldn’t have to worry about making any large monthly payments – he could focus on his projects at hand) which would happen over the course of 12 months. It was as simple as that! No hassles or phone calls from banks, just a solid relationship with an alternative financing company, such as Excel Capital Management, and peace of mind.

Everyone needs a little help here and there, and there is no shame in asking for it. There’s more hope than ever for small to mid-sized businesses when it comes to acquiring working capital. Whether you need $5,000 or $5,000,000, there are options. Most of today’s top CEOs have taken loans or received working capital in order to grow their companies into multi million dollar corporations. You know the old saying. “It takes money to make money!”