Ohio Business Funding News Feed

All You Need To Know About Business Consolidation Loans

info@starkcountyconnections.com (Karnchea Barchue) — Fri, 10 Jan 2025 06:03:13 GMT

Business Consolidation Loan

A business consolidation loan is a financial solution designed to combine multiple existing business debts into a single loan. This simplifies repayment and often reduces overall interest rates or extends terms, providing businesses with better cash flow management.

Key Features:

Loan Amount : Typically ranges from $10,000 to $5,000,000, depending on the business’s financial health and debt load.
Repayment Terms : Can range from 1 to 10 years or longer.
Interest Rates : Rates vary based on creditworthiness, starting as low as 5% APR for highly qualified borrowers.
Usage : Used specifically to pay off existing business debts like credit cards, lines of credit, term loans, or merchant cash advances (MCAs).

Benefits of a Business Consolidation Loan:

Simplified Payments : Replaces multiple payments with one manageable monthly payment.
Reduced Interest Rates : Helps lower overall interest costs, especially for high-interest debts.
Improved Cash Flow : By extending the repayment term, businesses can free up cash for operations.
Better Financial Health : May improve credit scores by paying off debts and lowering credit utilization ratios.

Common Uses:

Consolidating High-Interest Credit Card Debt : Reduces the financial burden of high APRs.
Combining Merchant Cash Advances : Streamlines repayments into a single loan with more favorable terms.
Restructuring Business Debt : Simplifies repayment and improves cash flow for growing businesses.

Drawbacks:

Extended Repayment Terms : Lower monthly payments can mean paying more in interest over time.
Collateral Requirement : Secured loans may require business or personal assets as collateral.
Qualification Challenges : Businesses with poor credit or inconsistent cash flow may face higher interest rates or difficulty qualifying.

Requirements:

Time in Business : Typically 1-2 years or more.
Revenue : Demonstrated ability to repay, with consistent monthly revenue.
Credit Score : Personal and/or business credit score of 600+ (higher scores get better rates).
Documentation : Financial statements, debt schedules, tax returns, and bank statements.

Example:

A business has:
$20,000 in credit card debt (18% APR)
$30,000 merchant cash advance with daily payments of $500
$15,000 in a term loan (12% APR)

A $65,000 consolidation loan with a 5-year term and a 10% APR reduces monthly payments to $1,380, compared to their previous $2,500+ combined payments.

Would you like assistance finding a business consolidation lender or calculating your potential savings?

Can A Payroll Loans Help To Grow Your Business?

info@starkcountyconnections.com (Karnchea Barchue) — Fri, 10 Jan 2025 05:53:51 GMT

Payroll Loan

A payroll loan is a short-term financing solution designed to help businesses cover payroll expenses during cash flow shortages. This type of loan ensures that employees are paid on time, even if the business faces unexpected revenue delays or operational challenges.

Key Features:

Loan Amount : Typically ranges from $5,000 to $500,000 or more, depending on business needs and qualifications.
Repayment Terms : Short-term, usually 3-12 months, though some options extend up to 24 months.
Interest Rates : Vary based on creditworthiness, loan size, and lender, ranging from 8%-30% APR.
Funding Speed : Often approved and funded within 24-72 hours.

When to Use a Payroll Loan:

Seasonal Revenue Fluctuations : To cover payroll during off-peak business periods.
Unexpected Expenses : To manage emergencies like equipment failure or delayed customer payments.
Growth or Expansion : When hiring new employees during a scaling phase.

Benefits:

Quick Funding : Ensures payroll obligations are met on time.
Preserves Employee Morale : Timely salaries maintain employee trust and productivity.
Flexible Use : Funds can also cover related expenses like taxes and benefits.
Avoid Penalties : Prevents fines or legal issues for late wage payments.

Drawbacks:

Higher Interest Rates : Short-term loans often carry higher costs compared to traditional financing.
Cash Flow Strain : Repayment terms may require substantial monthly payments.
Risk of Dependency : Repeated borrowing for payroll can indicate underlying cash flow problems.

Requirements:

Time in Business : Typically 6 months to 2 years.
Revenue : Consistent monthly or annual income to show loan repayment ability.
Credit Score : Both business and personal credit scores may be considered, usually requiring 600+.
Documentation : Payroll records, tax returns, and bank statements may be required.

Example:

A small business experiencing a slow sales month borrows $50,000 for payroll. The loan has a 12% APR and a 6-month repayment term. Monthly payments are approximately $8,645, ensuring employees are paid on time while awaiting improved cash flow.

Would you like help finding a lender or creating a strategy to stabilize payroll financing?

Why You Should Invest In Real Estate

info@starkcountyconnections.com (Karnchea Barchue) — Fri, 10 Jan 2025 05:45:20 GMT

Commercial Real Estate Financing

Commercial real estate financing provides businesses and investors with funding to purchase, develop, or refinance income-generating properties such as office buildings, retail spaces, industrial facilities, or multifamily housing.

Key Features:

Loan Amount : Ranges from $250,000 to $50+ million, depending on the property value and lender.
Loan-to-Value (LTV) Ratio : Typically 65%-85% of the property’s appraised value.
Repayment Terms : Usually 5-25 years with amortization schedules.
Interest Rates : Fixed or variable rates, often influenced by creditworthiness and market conditions.

Types of Commercial Real Estate Loans:

Traditional Commercial Mortgages : Long-term financing for purchasing or refinancing commercial properties.
SBA 504/7(a) Loans : Government-backed loans designed for small businesses acquiring owner-occupied properties.
Bridge Loans : Short-term loans for immediate property acquisition or renovations before permanent financing.
Hard Money Loans : Asset-based financing for quick funding, often used by investors.
Construction Loans : For property development, covering costs like land, labor, and materials.

Common Uses:

Purchasing an office building for business operations.
Refinancing an existing mortgage to secure better rates.
Developing multifamily housing or mixed-use properties.
Expanding retail space or warehouses.

Advantages:

Leverage : Allows businesses to acquire valuable real estate with minimal upfront capital.
Flexible Terms : Various options to suit business needs, from short-term to long-term loans.
Appreciation Potential : Real estate often increases in value over time.
Tax Benefits : Interest payments and depreciation may be tax-deductible.

Disadvantages:

Down Payment : Requires significant upfront capital, typically 15%-35%.
Risk of Default : Missed payments can result in foreclosure on the property.
Market Dependency : Property values and rents depend on local real estate conditions.
Complex Process : Requires detailed documentation and property appraisals.

Example:

A retail business secures a $1,000,000 loan to purchase a shopping center with an 80% LTV ratio. The loan has a 6% interest rate and a 20-year term, resulting in monthly payments of approximately $7,200.

Would you like assistance navigating commercial real estate financing or need help connecting with specialized lenders?

Why Your Business Should Finance Equipment

info@starkcountyconnections.com (Karnchea Barchue) — Fri, 10 Jan 2025 05:22:46 GMT

Equipment Financing

Equipment financing is a type of loan or lease specifically designed to help businesses purchase the machinery, vehicles, or equipment they need to operate. This financing option allows companies to spread the cost of expensive equipment over time, preserving cash flow for other business needs.

Key Features:

Loan Amount : Typically up to 100% of the equipment's cost, depending on the lender and creditworthiness.
Repayment Terms : Ranges from 1 to 7 years, based on the expected lifespan of the equipment.
Interest Rates : Fixed or variable rates, often tied to the borrower’s credit and business revenue.
Collateral : The equipment itself usually serves as collateral for the loan.

Common Uses:

Purchasing heavy machinery for construction.
Acquiring medical equipment for a healthcare practice.
Financing delivery trucks or company vehicles.
Upgrading office technology, such as computers or servers.

Advantages:

Preserves Cash Flow : Spread out payments instead of paying upfront.
Flexible Financing : Tailored terms based on the equipment's lifespan.
Ownership Benefits : You own the equipment outright after repayment.
Tax Advantages : Equipment financing may qualify for Section 179 tax deductions.

Disadvantages:

Equipment Depreciation : The asset may lose value faster than you pay it off.
Limited Use of Funds : Financing is specific to equipment purchases only.
Potential for Higher Costs : Interest and fees may make the total cost higher than a direct purchase.

Example:

A construction company secures $75,000 in financing to purchase an excavator. They pay it off over five years with monthly payments of $1,400 at a 6% interest rate.

Would you like to explore equipment financing options for your business or need help identifying qualified lenders?

Term Loan vs Working Capital explained

info@starkcountyconnections.com (Karnchea Barchue) — Fri, 10 Jan 2025 05:07:52 GMT

Business Term Loan

A business term loan , also know as a working capital loan , is a traditional funding option that provides a lump sum of money upfront, which is repaid over a set period with regular daily, weekly, or monthly payments. This type of loan is ideal for established businesses looking to finance short or long-term projects with significant expenses.

Key Features:

Loan Amount : Typically ranges from $5,000 to several million dollars, depending on the lender and the borrower's qualifications.
Repayment Terms : Fixed repayment schedule ranging from 1 month to 25 years, depending on the loan type and purpose.
Interest Rates : Can be fixed or variable, often determined by creditworthiness, business financials, and market conditions.
Secured or Unsecured : Loans can be backed by collateral (secured) or based on the business's creditworthiness (unsecured).

Common Uses:

Purchasing equipment or inventory.
Expanding business operations or opening new locations.
Refinancing existing debt.
Undertaking large capital projects.

Advantages:

Predictable Payments : Fixed repayment schedule makes it easier to plan for expenses.
Larger Loan Amounts : Suitable for significant investments or expansions.
Builds Credit : Timely repayments help improve the business’s credit score.

Disadvantages:

Strict Qualifications : Often requires good credit, consistent revenue, and business stability for longer terms.
Collateral Requirements : Some loans require business or personal assets as security.
Potential Prepayment Penalties : Some lenders charge fees for early repayment.

Example:

A restaurant owner takes out a $100,000 term loan to renovate and expand their dining area. The loan is repaid over 5 years with a 7% fixed annual interest rate.

Would you like assistance in finding a term loan tailored to your business's needs?

Business Charge Cards With NO PG

info@starkcountyconnections.com (Karnchea Barchue) — Fri, 10 Jan 2025 04:45:26 GMT

Business Charge Card

A business charge card is a type of payment card designed specifically for businesses. Unlike traditional credit cards, charge cards typically require the cardholder to pay the full balance every month, making them an excellent option for businesses that can manage cash flow effectively.

Key Features:

No Pre-Set Spending Limit : Spending limits adjust based on your business's financial profile and payment history.
No Interest Charges : Since balances must be paid in full each month, there are no interest fees.
Rewards and Benefits : Many charge cards offer business rewards, cashback, travel perks, and expense management tools.
Ideal for Larger Purchases : Suited for businesses making significant purchases or managing multiple expenses.

Benefits:

Builds Business Credit : Helps establish and improve your business credit profile.
Streamlined Expense Management : Offers detailed reporting and categorization of expenses.
Improved Cash Flow : Provides a short-term funding solution for day-to-day operations.
Enhanced Perks : Travel insurance, purchase protection, and other business-related benefits.

Popular Options:

American Express Business Charge Cards (e.g., Platinum, Gold)
Brex Card
Divvy Card

Business charge cards are an excellent tool for responsible business owners who need flexibility and robust financial management capabilities. Would you like to explore specific options or need assistance applying for one?

Business Line of Credit

info@starkcountyconnections.com (Karnchea Barchue) — Tue, 07 Jan 2025 03:57:09 GMT

Business Line of Credit

A business line of credit is a flexible financing option that allows businesses to borrow up to a pre-approved limit and pay interest only on the amount used. It’s ideal for managing cash flow, covering short-term expenses, or seizing growth opportunities.

Key Features

Revolving Credit : Similar to a credit card, you can withdraw, repay, and reuse funds as needed.
Flexible Use : Funds can be used for any business purpose, such as inventory, payroll, or unexpected expenses.
Pre-Approved Limit : Borrow as much or as little as needed, up to your credit limit.
Interest on Used Amount : Pay interest only on the funds you draw, not the entire credit limit.

Benefits

Cash Flow Management : Helps bridge gaps between income and expenses.
Quick Access to Funds : Useful for emergencies or unexpected opportunities.
Builds Credit : Timely repayments can improve your business credit score.
Cost-Effective : Lower interest rates compared to credit cards.

Types of Business Lines of Credit

Secured : Backed by collateral (e.g., equipment, real estate, or inventory). Offers higher limits and lower interest rates.
Unsecured : Does not require collateral but may have stricter credit requirements and higher rates.

Qualification Requirements

Time in Business : Typically 6 months to 2 years.
Revenue : Demonstrated consistent business income.
Creditworthiness : Good personal and/or business credit score (typically 600+).
Financial Documentation : May include tax returns, bank statements, and profit/loss statements.

How It Works

Apply : Submit your application to a bank, credit union, or online lender.
Approval : Receive a pre-approved credit limit based on your qualifications.
Draw Funds : Access funds as needed, paying back in installments or all at once.
Revolving Access : Repayment replenishes the available credit for future use.

Pros

Flexible and reusable.
Interest charged only on what you use.
Can be unsecured, requiring no collateral.

Cons

Lower credit limits compared to loans.
Higher interest rates for unsecured lines of credit.
May require ongoing fees (e.g., maintenance or draw fees).

Would you like help applying for a business line of credit or advice on choosing the right lender?

Business Credit Card Stacking

info@starkcountyconnections.com (Karnchea Barchue) — Sun, 05 Jan 2025 21:30:23 GMT

Business Credit Card Stacking

Business Credit Card Stacking is a financing strategy where a business owner applies for and secures multiple business credit cards within a short timeframe to access a significant amount of credit. This method is often used to fund startups, cover operational expenses, or consolidate debt.

Key Benefits:

No Collateral Required : Unlike traditional loans, credit cards don't require business assets as security.
Flexible Spending : Offers the freedom to use the credit as needed without restrictions.
0% Intro APR Offers : Many business credit cards provide interest-free introductory periods, allowing businesses to borrow without incurring immediate interest charges.
Boosts Credit Profile : Proper management can help build a strong business credit score over time.

Risks:

High-Interest Rates : After the introductory period, interest rates can be high if balances aren't paid off.
Credit Score Impact : Multiple credit inquiries in a short period can lower your credit score temporarily.
Debt Management Challenges : Mismanagement of stacked cards can lead to unmanageable debt levels.

Ideal for:

Start-Ups
Consolidation
Entrepreneurs looking for quick and flexible funding.
Businesses needing a temporary cash flow boost.
Companies with a solid repayment plan to manage multiple credit lines responsibly.

Would you like more detailed information or assistance in implementing a business credit card stacking strategy?

Grants For Women Owned Businesses

info@starkcountyconnections.com (Karnchea Barchue) — Thu, 05 Dec 2024 20:07:42 GMT

Funding Your Business Dreams: Grants and Loans for Female Entrepreneurs

Female entrepreneurs play a vital role in shaping the business landscape, and securing the right funding can propel your ambitions to new heights. While grants offer "free money" with no repayment required, business loans can provide supplemental support when grant funding falls short. Here’s your guide to navigating small business grants and loans, empowering you to make informed financial decisions.

What Are Small Business Grants?

Grants are non-repayable funds awarded to entrepreneurs to support their business ventures. They don’t rely on credit scores or other strict lending criteria, making them an attractive option for female entrepreneurs.

However, competition is fierce, and applications often involve meeting specific eligibility rules, timelines, and goals. To stand out, a strong business plan that showcases feasibility and sustainability post-grant is essential.

Popular Grants for Women-Owned Businesses

Amber Grants
What’s Offered: $10,000 monthly in three categories, plus eligibility for an annual $25,000 prize.
Application Fee: $15
How to Apply: Submit an online application via WomensNet .
IFundWomen Grant Marketplace
What’s Offered: Matches businesses with enterprise grants from companies like Visa, Unilever, and more.
How to Apply: Complete a single application and let the program match you with potential funding.
HerRise Micro-Grant
What’s Offered: $1,000 monthly to Black female entrepreneurs whose businesses positively impact their communities.
Eligibility: 51% women-of-color ownership, U.S.-based, and revenue under $1 million.
Galaxy Grant
What’s Offered: $2,750 grants to female and minority entrepreneurs.
How to Apply: Fill out a quick online form .
Cartier Women’s Initiative
What’s Offered: Annual grants ranging from $30,000 to $100,000 for women-led businesses with social or environmental impact.
Eligibility: Open to women-run businesses worldwide.

Tips for Grant Applications

Check Your Eligibility: Avoid wasting time on applications for grants you’re not qualified for.
Follow Instructions: Complete applications fully and provide all required documentation.
Present Your Best Self: Ensure your business plan is professional and showcases your vision clearly.
Proofread: Errors can harm your chances—double-check or seek a second opinion.

Supplementing Grants with Business Loans

If your grant funding is insufficient or unavailable, business loans can bridge the gap. Options include:

Term Loans: Lump-sum funding up to $5 million with repayment terms up to 25 years.
Business Line of Credit: Flexible access to funds, similar to a credit card, with borrowing limits tailored to your needs.
Invoice Financing: Use unpaid invoices as collateral for immediate cash flow.
Equipment Financing: Finance machinery or equipment with no additional collateral required.
SBA Loans: Backed by the government, offering lower interest rates and flexible terms.

How Ohio Business Funding Can Help

Applying for grants and loans doesn’t have to be overwhelming. At Ohio Business Funding , we specialize in helping women entrepreneurs secure funding through grants and loans.

What We Offer:
Expert guidance through grant applications.
Loan comparisons tailored to your business needs.
Tools to ensure your applications stand out.

Let us help you achieve your business dreams! Visit us online at Ohio Business Funding or call us today to get started.

Your ambition deserves the support to thrive. Take the first step toward financial success now!

Equipment Sale and Leaseback: How It Works and Why It’s a Smart Financing Option

info@starkcountyconnections.com (Karnchea Barchue) — Tue, 10 Sep 2024 16:08:50 GMT

Equipment Sale and Leaseback: How It Works and Why It’s a Smart Financing Option

For many businesses, access to capital is crucial for growth, expansion, or simply maintaining operations. One innovative financing strategy that can unlock cash tied up in owned assets is an equipment sale and leaseback arrangement. This financial solution allows companies to sell their existing equipment to a lender or leasing company and then lease it back, effectively freeing up cash while retaining the use of the equipment. Let’s dive into how equipment sale and leaseback works and why it might be a smart option for your business.

What is Equipment Sale and Leaseback?

Equipment sale and leaseback is a financing arrangement where a business sells its equipment, machinery, or other capital assets to a leasing company or financial institution. Immediately after the sale, the business leases the equipment back from the buyer for a predetermined period, continuing to use the equipment as if they still owned it.

How Does Equipment Sale and Leaseback Work?

Here’s a step-by-step overview of the equipment sale and leaseback process:

Asset Valuation: The process begins with an appraisal of the equipment’s current market value. This valuation determines the amount of cash the business will receive from the sale.
Sale Agreement: Once the equipment’s value is agreed upon, the business enters into a sale agreement with the leasing company or lender. The equipment is sold at its appraised value, and the business receives the proceeds from the sale.
Leaseback Arrangement: Simultaneously, the business signs a lease agreement to rent the equipment back from the buyer. This leaseback can be structured as a capital lease or an operating lease, depending on the business's needs and financial goals.
Use of Funds: The business can use the cash received from the sale for various purposes, such as paying down debt, purchasing additional equipment, investing in new projects, or simply boosting working capital.
Lease Payments: The business makes regular lease payments over the agreed term. At the end of the lease period, there may be options to renew the lease, purchase the equipment at fair market value, or return the equipment, depending on the terms of the lease agreement.

Benefits of Equipment Sale and Leaseback

Improved Cash Flow: One of the most significant advantages is the immediate infusion of cash, which can improve liquidity and free up working capital for other business needs.
Retained Use of Equipment: Businesses continue to use the equipment without interruption, ensuring that operations remain unaffected.
Tax Advantages: Lease payments are often tax-deductible as an operating expense, which can provide additional financial benefits.
Avoidance of Additional Debt: Unlike taking out a loan, a sale and leaseback arrangement does not add new debt to the balance sheet, which can be beneficial for maintaining a healthy debt-to-equity ratio.
Flexibility: This arrangement provides flexibility with terms that can be tailored to suit the specific needs of the business, including the lease period and payment structure.
Unlock Hidden Value: Equipment that is fully owned and depreciated might still have significant market value. A sale and leaseback arrangement allows businesses to unlock this hidden value without sacrificing operational capacity.

Is Equipment Sale and Leaseback Right for Your Business?

Equipment sale and leaseback can be an excellent option for businesses in need of liquidity but wanting to avoid traditional loans or lines of credit. It is particularly beneficial for companies that have substantial amounts of capital tied up in equipment but require cash for expansion, debt repayment, or other strategic initiatives.

However, it's important to carefully consider the leaseback terms and the long-term impact on cash flow. Businesses should evaluate whether the lease payments are manageable and align with their financial goals. Consulting with a financial advisor or underwriter can provide valuable insights into whether this option is the best fit for your specific situation.

Conclusion

Equipment sale and leaseback is a powerful financial tool that can provide immediate cash flow benefits while allowing businesses to retain the use of their essential equipment. By unlocking the value of owned assets, companies can gain the financial flexibility needed to drive growth and operational success. If your business is asset-rich but cash-constrained, exploring equipment sale and leaseback might be a smart move.

Unlock Your Business Potential with Equipment Financing: Get the Tools You Need Without Breaking the Bank

info@starkcountyconnections.com (Karnchea Barchue) — Mon, 02 Sep 2024 14:22:58 GMT

Unlock Your Business Potential with Equipment Financing: Get the Tools You Need Without Breaking the Bank

Introduction:

Running a successful business requires having the right tools and equipment at your disposal. However, acquiring these assets can often be a costly endeavor, leaving many entrepreneurs struggling to find the necessary funds. That's where equipment financing comes in. In this blog post, we will explore how equipment financing can unlock your business potential and help you get the tools you need without breaking the bank.

Section 1: The Benefits of Equipment Financing

Having access to the latest equipment can give your business a competitive edge. However, purchasing equipment outright can be a significant financial burden. Equipment financing offers a solution by allowing you to make affordable monthly payments instead of a large upfront investment. This enables you to conserve your cash flow and allocate funds to other critical areas of your business, such as marketing and expansion.

Additionally, equipment financing provides you with the ability to plan for a predictable, fixed monthly expense. This allows for better financial management and eliminates the uncertainty that comes with unexpected equipment repair or replacement costs. With equipment financing, you can budget effectively and focus on growing your business.

Section 2: Flexible Options for Every Business Need

No matter the size or industry of your business, equipment financing offers flexible options to suit your specific needs. Whether you require equipment for a startup or an established business, equipment financing can provide solutions tailored to your circumstances.

With loan amounts ranging from $1,000 to $20 million, equipment financing covers a wide range of equipment needs. Whether you need machinery, vehicles, technology, or specialized tools, you can find financing options that fit your requirements. Furthermore, equipment financing terms can extend up to 10 years, giving you ample time to repay the loan without straining your finances.

Section 3: Easy Approval Process and Borrower Criteria

Securing financing for your equipment shouldn't be a daunting process. Equipment financing offers a streamlined approval process with options for same-day approvals. This means you can get the funding you need quickly, allowing you to acquire the equipment without delay.

Additionally, equipment financing has borrower criteria that are designed to accommodate businesses at various stages of development. Whether you're a startup or have been in business for years, there are options available to you. With a minimum FICO score requirement of 500 and monthly revenue starting at $5,000, equipment financing provides accessible opportunities for businesses of all sizes.

Section 4: Minimal Documentation and Soft Credit Pull

Gone are the days of drowning in paperwork and lengthy credit processes. Equipment financing simplifies the documentation requirements, making it easier for you to get the funding you need. Basic credit applications, credit reports, invoices, and four months of business bank statements are typically all that is required. This saves you time and energy, allowing you to focus on running your business.

Furthermore, equipment financing often utilizes a soft credit pull, which means that your credit score won't be negatively impacted during the approval process. This is a significant advantage, as it allows you to explore financing options without worrying about potential credit damage.

Closing:

Unlocking your business potential shouldn't be hindered by financial constraints. With equipment financing, you can acquire the tools and equipment you need to take your business to new heights without breaking the bank. From flexible options to easy approval processes, equipment financing offers a viable solution for businesses of all sizes and industries.

Don't let a lack of funds hold you back. Explore equipment financing options today and equip your business for success. With predictable monthly payments and the ability to conserve cash flow, you can invest in the tools that will drive your business forward. Unlock your business potential with equipment financing and watch your dreams become a reality.

Contact us now to learn more about how equipment financing can benefit your business. Together, let's build a brighter future for your business success.

Disclaimer: The information provided in this blog post is for informational purposes only and should not be considered as financial advice. Please consult with a financial professional before making any financial decisions.

Unlocking Real Estate Opportunities: How a Business Real Estate Loan Can Help You Grow

info@starkcountyconnections.com (Karnchea Barchue) — Mon, 02 Sep 2024 14:07:39 GMT

Unlocking Real Estate Opportunities: How a Business Real Estate Loan Can Help You Grow

Introduction:

Are you a business owner with dreams of expanding your operations or investing in commercial property? If so, then you're probably aware of the challenges that come with financing such ventures. Luckily, there's a solution that can help you unlock real estate opportunities and take your business to the next level: a business real estate loan. In this blog post, we will explore how a business real estate loan can empower you to grow and succeed in the competitive market.

1. The Power of a Business Real Estate Loan:

Imagine being able to purchase or improve commercial property without draining your business's cash flow. That's exactly what a business real estate loan offers. This type of loan, also known as a commercial real estate loan (CRE), is a mortgage arranged with a bank specifically for businesses looking to invest in income-producing properties. Whether you're eyeing an office space, retail store, hotel, or apartment building, a business real estate loan can provide the financial boost you need to make it happen.

2. Versatility for Various Purposes:

One of the key advantages of a business real estate loan is its versatility. You can use this loan for a wide range of purposes, including purchasing property, constructing new buildings, rehabilitating existing structures, refinancing property, and buying and developing land for residential homes. Whatever your real estate goals may be, a business real estate loan can be tailored to suit your specific needs.

3. Flexible Terms for Maximum Convenience:

When it comes to financing, flexibility is crucial. With a business real estate loan, you have access to flexible terms that can be customized to align with your business's financial capabilities. Loan amounts range from $25,000 to $150 million, and term lengths can extend up to 30 years, ensuring that you have ample time to repay the loan. Plus, the payment frequency is monthly, making it easier to manage your cash flow. With loan-to-value ratios of up to 80%, you can secure financing for a significant portion of your property's value.

4. Speedy Process for Quick Results:

In the fast-paced world of business, timing is everything. That's why a business real estate loan offers a streamlined process, allowing you to access the funds you need in as little as three weeks. With a quick closing time frame and a soft credit pull, you can avoid lengthy delays and get started on your real estate project sooner rather than later. Additionally, certain loan options may not require an appraisal, saving you time and money during the application process.

5. Accessibility for All Types of Investors:

Whether you're a seasoned real estate investor or just starting out, a business real estate loan is accessible to a wide range of borrowers. Even with credit scores as low as 600, professional investors can secure financing for their real estate ventures. And for those with a minimum FICO score of 500, there are still options available. Additionally, the debt service coverage ratio (DSCR) can go as low as 0.5x, ensuring that investors with varying financial situations can still benefit from this loan.

6. A Variety of Property Types Covered:

No matter what type of commercial property you're interested in, a business real estate loan has got you covered. From single-family residences and multi-family buildings to industrial facilities, self-storage units, office spaces, retail establishments, hotels, and even raw land, there are financing options available for all property types. This wide coverage allows you to explore various real estate opportunities and expand your business in the direction that suits you best.

Closing:

In the competitive world of business, seizing real estate opportunities can be a game-changer. With a business real estate loan, you can unlock the potential for growth and success. From flexible terms and speedy processing to accessibility for all types of investors and coverage for a variety of property types, this loan offers the support you need to make your real estate dreams a reality. Don't miss out on the chance to take your business to new heights. Apply for a business real estate loan today and open the door to endless possibilities.

Unlock Financial Freedom: How MCA Consolidation Can Help Your Business Thrive

info@starkcountyconnections.com (Karnchea Barchue) — Mon, 02 Sep 2024 13:14:14 GMT

Unlock Financial Freedom: How MCA Consolidation Can Help Your Business Thrive

Introduction:

Are you struggling with managing multiple merchant cash advances (MCAs) and other debts? Is your cash flow suffering, making it difficult to meet payroll, purchase inventory, or bid on contracts? If so, it's time to unlock financial freedom and take control of your business with MCA consolidation. In this blog post, we will explore how MCA consolidation can help your business thrive, allowing you to focus on what you do best - running and growing your business.

The Benefits of MCA Consolidation:

MCA consolidation is a financial strategy that combines multiple MCAs into a single loan, simplifying your repayment schedules and helping you manage your cash flow more efficiently. Here are some key benefits of MCA consolidation:

1. Lower Payments: By consolidating your MCAs, you can enjoy lower weekly payments compared to the high daily or weekly payments you may be currently facing. This can provide immediate relief and free up cash flow for other business needs.

2. Reduce Debt: MCA consolidation allows you to reduce your overall debt burden by providing more manageable payments. This can help you regain control of your finances and work towards becoming debt-free.

3. Rebuild Cash Flow: By streamlining your debt payments, MCA consolidation can help you rebuild your cash flow. This means having the necessary funds to meet your payroll, purchase inventory, bid on contracts, and invest in equipment, ultimately fueling the growth of your business.

4. Eliminate Stress: Managing multiple MCAs and other debts can be overwhelming and stressful. MCA consolidation eliminates the hassle of juggling multiple payments, allowing you to focus on what you do best - running and growing your business.

How MCA Consolidation Works:

Now that you understand the benefits, let's take a closer look at how MCA consolidation works. The process is simple and straightforward:

1. Assess Your Debt: Start by determining your approximate business debt amount. This will help you understand the scope of your debt and how it can be consolidated.

2. Get an Instant Savings Quote: Once you have assessed your debt, you can request an instant savings quote. This will give you an estimate of the potential savings and benefits you can enjoy through MCA consolidation.

3. Same Day Approval: With MCA consolidation, you don't have to wait for weeks or months to get approved. Many lenders offer same-day approval, ensuring that you can start benefiting from consolidation as soon as possible.

4. Lower Payments, More Savings: Once you consolidate your MCAs, you can enjoy lower payments and significant savings. This can free up cash flow for other business needs and provide financial stability for your business.

Why Choose Ohio Business Funding for MCA Consolidation:

When it comes to MCA consolidation, Ohio Business Funding is your trusted partner. With over a decade of experience, we have been providing personal loans, business loans, lines of credit, equipment finance, and commercial real estate loans nationwide.

Here's why you should choose Ohio Business Funding for your MCA consolidation:

1. Quick & Reliable: We understand that time is of the essence for business owners. That's why we offer quick and reliable services, ensuring that you get approved and start benefiting from consolidation without any delay.

2. Expertise: With our extensive experience in the industry, we have the expertise to guide you through the MCA consolidation process. Our team of professionals will work closely with you to understand your unique needs and provide tailored solutions.

3. Transparent and Fair: At Ohio Business Funding, we believe in transparency and fairness. We provide full disclosure of the terms and conditions, ensuring that you have all the information you need to make an informed decision.

4. Exceptional Customer Service: We pride ourselves on delivering exceptional customer service. Our dedicated team is always available to answer your questions, address your concerns, and provide ongoing support throughout the consolidation process.

Closing:

Don't let the burden of multiple MCAs and other debts hold your business back. Unlock financial freedom and take control of your business with MCA consolidation. By consolidating your debts, you can enjoy lower payments, reduce your debt burden, rebuild your cash flow, and focus on what you do best - running and growing your business.

Contact Ohio Business Funding today to get an instant savings quote and start your journey towards a brighter financial future. Remember, financial freedom is within reach, and MCA consolidation can be the key to unlocking it.

FICO® SBSS℠ Score — A Key SBA Loan Credit Score Explained

info@starkcountyconnections.com (Karnchea Barchue) — Thu, 10 Aug 2023 15:02:33 GMT

There’s a FICO credit score designed just for small business: the FICO® SBSS℠ score. Banks, business credit card issuers, and other lenders may use it to help make lending decisions. The SBA (Small Business Administration) requires lenders to use this score to pre-screen borrowers for some of the SBA loans it insures. Just as your personal FICO credit scores can impact your ability to secure financing, your business FICO SBSS score can impact your ability to get small business financing.

What is the FICO SBSS Credit Score?

FICO® LiquidCredit® Small Business Scoring Service℠ (FICO® SBSS℠ score) is one of the main business credit scores lenders may use. It’s a credit score small business owners should know about if they are considering a small business loan through a traditional lender such as a bank, or certain SBA loans. But many entrepreneurs have never heard of it because it’s been hard to get your hands on it.

Banks aren’t required to disclose that they use the FICO® SBSS℠ score and FICO doesn’t sell this score to borrowers as it does with consumer scores that it sells through myFICO.com. More lenders are using it because it helps them make faster, more accurate lending decisions. This means they can make decisions in hours, not days.

What is a Good FICO SBSS Score?

The FICO SBSS score ranges between 0 to 300, with 300 being the highest score. A higher score indicates lower risk.
The U.S. Small Business Administration (SBA) requires lenders to use this score to pre-screen certain SBA 7(a) loans:

Current minimum SBSS scores:

7(a) Small Loans: 155
Community Advantage: 140
Express Bridge Loan Pilot Program: 130

If your score falls below their required threshold, it doesn’t necessarily mean your application can’t be approved. To continue, your loan application then must go through a manual approval where other factors may be taken into account.

How is the FICO SBSS Credit Score Calculated?

FICO doesn’t have any credit information, it just provides the formulas used to calculate credit scores. The information it uses to calculate this business score comes from credit reporting agencies, the lender or other data sources. SBSS models use up to four types of information.

Consumer credit reports for the principals/guarantors of the business (up to five owners),
Business credit reports for the business,
Application data supplied on the loan application, and
Business financial data

Of these, FICO says that the credit information that is most important in terms of helping predict performance are the business owner’s personal credit data followed by business bureau data, financial data, then application data.

If you have no business credit history and limited time in business, you may be able to get a passing FICO SBSS score based on stellar personal credit alone. But it helps to have strong business credit as well.

Banks and lenders can set up the SBSS model they use in different ways, putting more weight on certain information, and less on others.

For example, it can put more weight on your business credit profile or more on your personal credit history. It’s also a very “smart” business credit scoring model because it can automatically go from one business credit bureau to another, in whatever order of priority the lender prefers, until it’s able to generate a score.

So, if the lender prefers using Experian for business credit data as the default, it can pull that data from Experian data. But if that report doesn’t provide enough information, it can automatically get business credit data from Dun & Bradstreet. If there’s not enough business credit data available, it will just use the personal credit data to calculate the SBSS score, potentially along with business financials.

Currently, FICO SBSS can be calculated using consumer credit data from Experian, Equifax or Transunion as well as business credit data from Dun & Bradstreet, Experian Business or Equifax SBFE .

Application data can include business checking account balance , time as current owner and principal’s combined net worth.

Because the lender has a choice of credit bureaus to use when accessing data to create this score, your business does not have a single FICO SBSS score. In addition, it will change as information in your credit reports change.

How FICO SBSS Works

Here are some important facts to understand about this business credit score:

FICO SBSS rank-orders small businesses by their likelihood of making payments on time. The FICO score ranges from 0 to 300. Higher scores are better in that they indicate lower risk but each lender will choose the minimum score it will accept.
The minimum score to pass the mandatory prescreen for 7(a) Small Loans is currently 155 (as of October 1, 2020). But most SBA lenders set their minimum score at 160-165.
The score can be calculated based upon personal and business credit history and other financial information. A strong history of business credit with timely payments to vendors and suppliers may help boost your SBSS score.
If you have derogatory or no credit history, it can take months or even years of positive credit activity to move your SBSS score significantly higher. It’s vital to build your credit and ensure it’s healthy before you need it.
Because businesses are not covered by Fair Credit Reporting Act protections, you can be denied business financing due to your SBSS score, and lenders are not required to notify you the score was used or provide access to your score.

Who Uses the FICO SBSS Score?

In the past, FICO has reported that the FICO SBSS score is used by over 7,500 lenders nationwide to help them make lending decisions. The latest version of FICO SBSS 7.0 built for loan amounts up to $1 million for term loans and lines of credit, and $250,000 for leasing transactions.

As mentioned earlier, certain SBA loans require this score be used to pre-screen applications. Banks will use it to pre-screen their loan applicants but they usually set their cutoff higher, typically around 160-165.

How Can I Improve my FICO SBSS Score?

Even though this score is used for small business credit decisions, personal credit is important when it comes to earning a high FICO SBSS score, so one of the most important things you can do is to review your personal credit scores and make sure yours are as strong as possible. If your business has multiple owners or others who will guarantee the loan, their credit may be checked so you’ll want to make sure you are aware of any credit problems.

Strong business credit can help, so check your business credit with Dun & Bradstreet, Experian Business and Equifax. If your business doesn’t have a D-U-N-S number , you’ll want to get one and start building business credit.

If you don’t have a business bank account, make sure you get one and use it consistently for business expenses. Your business bank account balance may impact this score, and many lenders require and review business bank statements when making small business lending decisions.

Lastly, build your business. At least two year’s time in business, strong credit and solid financials are key to securing the best small business loans and financing.

‘Enormously costly’ business loan fraud drove inflation in home prices in certain markets, research suggests

info@starkcountyconnections.com (Karnchea Barchue) — Tue, 27 Jun 2023 12:02:33 GMT

It’s been a tough market for U.S. homebuyers with a limited supply of properties driving up prices nationwide.

But another factor may have contributed to rising home costs in certain markets — fraudulent claims from the Covid-era Paycheck Protection Program , or PPP, according to new research . PPP loans were designed to help cover business expenses during the pandemic, such as employee payroll.

“Fraud on this scale is enormously costly,” said Sam Kruger, co-author and assistant professor of finance at the University of Texas at Austin.

A historic pandemic-era relief program, PPP distributed more than $793 billion between April 2020 and May 2021. And previous research from the University of Texas at Austin team flagged $117.3 billion of the funds as “suspicious lending.”

“The fraud was highly concentrated geographically,” Kruger said. “And because of that concentration, there may have been spillover effects in some of those local areas.”

PPP loan fraud affected home prices

U.S. home prices rose by 24% between November 2019 and November 2021, according to the Federal Reserve Bank of San Francisco, driven by factors such as shifting demand and regional moves.

However, government aid may have also contributed to that growth, including higher rates of fraudulent PPP loans in certain areas, according to the new research.

This is a very specific type of stimulus that injected cash into certain areas, and it seems to have played a pretty significant role.

The paper found that certain markets had elevated rates of PPP loan fraud, and individuals who received fraudulent loans were more likely to have purchased property.

“This is a very specific type of stimulus that injected cash into certain areas, and it seems to have played a pretty significant role,” Kruger said.

ZIP codes with “high suspicious lending per capita” had home price growth that was 5.7% higher than ZIP codes in the same county with lower levels of fraud, the paper found. “This effect is large relative to other proposed factors explaining house price growth during the Covid period,” the authors wrote.

The findings were consistent after weighing factors such as land supply, previous home price growth, remote work access, population density, net migration, proximity to the central business district and prior rates of remote work.

“It’s not just that you’re stealing money from the government,” Kruger said. “There are potential distortions and spillover effects that are affecting other people in the community.”

Credit: Kate Dore, CFP

Here's how the best sources online for pulling D&B reports stack up - Pros & Cons

info@starkcountyconnections.com (Karnchea Barchue) — Sun, 16 Apr 2023 13:55:34 GMT

Here's how the best sources online for pulling D&B reports stack up - Pros & Cons

Live Business Data

Pros: up-to-date reports, cost-effective, no subscription is required, reports show financial data (SBFE), tradeline reporting to Dun & Bradstreet, Experian, Equifax, LexisNexis ( no subscription required ), offers a partner program, & minority-owned

Cons: only D&B reports are offered at the moment, not automated (reports are pulled by their internal staff)

Reference: https://www.livebusinessdata.com

Dun & Bradstreet

Pros: up-to-date reports, yearly plans, cost-effective, automated system, offers an affiliate program

Cons: subscription required, only D&B reports are offered, reports do not show financial data (SBFE), does not offer tradeline reporting, will try to upsell other services

Reference: https://www.dnb.com/products/small-business/credit-evaluator-plus.html

Nav Technologies, Inc

Pros: monthly or yearly plans, tradeline reporting to Dun & Bradstreet, Experian, Equifax, ( subscription required ), automated process, has an affiliate program

Cons : subscription required, can get pricey, outdated credit reports, reports do not show financial data (SBFE), will try to upsell other services

Reference: https://www.nav.com/pricing

Business Credit Reports, Inc

Pros: cost-effective, no subscription is required, offers a bulk discount, automated process, women-owned

Cons: outdated business credit reports, reports look generic, reports can be confusing, reports do not show financial data (SBFE), will not offer tradeline reporting

Reference: https://businesscreditreports.com/pricing

Ohio Fintech Company takes steps to help credit-challenged consumers to qualify for personal and business loans!

info@starkcountyconnections.com (Karnchea Barchue) — Tue, 17 Jan 2023 15:32:35 GMT

The new year of 2023 is here to provide us with a blank slate to achieve your goals and resolutions. What is on your list that you would like to accomplish? Many common goals for the new year include starting a business, making home improvements, reducing debt, and making major changes to increase your satisfaction in life. These are amazing opportunities to strive for and if you don’t want to just daydream about it, you are going to need some capital to get started.

The process of applying for loans can be a daunting one and it can be difficult to know where to begin. That is why the tech entrepreneur, Karnchea Barchue, began Ohio Business Funding in 2012. Located in Massillon, Ohio but certainly not limited to it, Ohio Business Funding is a direct lender that offers both business and personal loans nationwide. Whether you are in Ohio or California, Barchue’s company is dedicated to helping people realize their dreams through its remarkable FinTech technology.

As you explore Ohio Business Funding, you will find over sixty lenders competing for your business through their marketplace. This gives you the opportunity to have options at your fingertips for business loans, business lines of credit, equipment funding, and commercial real estate. After much success with the business offerings through Ohio Business Funding, Barchue has partnered with tech giant Even Financial to assist in personal loans, as well. You will be able to compare and contrast each lender to select the one that is the best for you and your business – No trips to the bank or endless online searching required.

You can visit Ohio Business Funding’s website: https://ohiobusinessfunding.com to begin the first steps of succeeding in your New Year’s resolutions. A free fifteen-minute phone consultation is also offered with one of Ohio Business Funding’s experts. What can you accomplish with a loan through Ohio Business Funding? Don’t hesitate to find out!

SBA Loans Limitations Based on Criminal History

info@starkcountyconnections.com (Karnchea Barchue) — Mon, 19 Sep 2022 00:32:33 GMT

Can I apply for an SBA Loan if I have a criminal history?

One of the questions that we have received during the last couple of weeks is whether a person with a criminal history can apply for an SBA loan. The answer is… it depends . It depends on the nature of the criminal offense.

What will disqualify me from applying for an SBA loan?

When it comes to criminal history, the following will disqualify a company and make it ineligible for SBA assistance.

If an owner of the company (who owns 20% or more) answers YES to any of the following questions taken from the SBA application, then the company is NOT eligible to apply for SBA assistance:

Are you currently incarcerated?
Have you been adjudicated for a felony in the preceding 5 years? This includes
Felony conviction;
Plea of guilty to a felony offense;
Plea of nolo contendere (no contest) to a felony;
Participating in a pre-trial diversion program for a felony offense;
Probation or Deferred Adjudication for a felony offense.
Are you currently on probation for a felony or a misdemeanor?
Are you currently on parole?
Are there pending criminal charges against you that have not yet been adjudicated (felony or misdemeanor)?

*NOTE : If a 20% (or more) owner answers YES to any of those questions, then the company will not even be able to complete its application for SBA assistance.

Please be reminded that it is a federal offense to falsify a loan application, so please don’t do that.

Hope this helps

Credit bhwlawfirm.com

Business Financial Terms

info@starkcountyconnections.com (Karnchea Barchue) — Sat, 12 Mar 2022 14:32:14 GMT

This document defines terminology related to financial statements and disaster business loan applications.

Accrual Basis Accounting

recognizes revenues when earned and expenses are matched with the related revenues and/or are reported when the expense occurs, not when the cash is paid deducts expenses when incurred.

Adjusted Net Worth

Post disaster fair market value of tangible assets, less liabilities, within certain restrictions.

Affiliate

Business concerns are affiliates if one concern controls or has the power to control another, or if a third party controls or has the power to control both. Generally, an affiliate may be any concern of which the applicant, or its principals, owns greater than 50 percent or more.

Affiliated Group

When two or more distinct legal entities are affiliated.

Amortization

A non-cash operating expense that reduces the value of intangible assets (such as patents, trademarks or goodwill) in a systematic manner. Amortization is recorded in the financial statements of an entity as a reduction in the carrying value of the intangible asset in the balance sheet and as an expense in the income statement.

Applicant Entity

The LLC, Partnership, Trust or Corporation requesting disaster loan assistance.

Applicant Individual

Individual requesting disaster loan assistance.

Applicant/Co-Applicant

The individual(s) or legal entity requesting disaster loan assistance.

Assets

Any item of economic value owned by an individual or corporation, especially that which could be converted to cash. Examples are cash, securities, accounts receivable, inventory, office equipment, a house, a car, and other property.

Available Asset Test

Part of the CET that determines if an applicant(s) has sufficient assets to borrow private sector funds to repair/replace uncompensated disaster damages without incurring undue hardship. (Certain exclusions apply.)

B/E (Business EIDL) Loan

A business loan that incorporates physical losses and economic injury for the same legal entity or individual.

Balance Sheet or Statement of Financial Position

Reports an entity’s Assets, Liabilities and Equity (net worth) at a specific time. Assets = Liabilities + Equity.

Break-even Analysis

A calculation of the approximate sales volume required to just cover costs, below which production would be unprofitable and above which it would be profitable. Break-even analysis focuses on the relationship between fixed cost, variable cost and profit.

Business Activity

The business (or loss) activity of the applicant business prior to any consideration of affiliation.

Capital Leases

are for the purchase of fixed assets (machinery/equipment) and these assets are shown on the company’s balance sheet and represent a fixed debt. If the lease is a capital lease, the debt should be shown as a Note Payable.

Cash Available to Service Additional Debt (CASAD)

The cash flow determined that should be available to service a disaster loan. The target payment is generally 1/3 of CASAD.

Cash Flow Test

Part of the CET that determines if an applicant(s) has sufficient cash flow to borrow private sector funds to repair/replace uncompensated disaster damages without incurring undue hardship.

Cash-basis Accounting

records revenue when cash is received, and expenses when they are paid in cash

Coastal Barrier Resource Area (COBRA)

A flood prone area in which the government prohibits financial disaster assistance.

Collateral

Assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of default. The preferred collateral for an SBA disaster loan is real estate

Companion File

When an applicant, affiliate, and/or principal has another application filed for the same disaster for separate damages.

Comparative Analysis

Is designed to point out significant trends that occur from year to year by using more than one set of financial statements of comparable dates and time periods. A comparative analysis allows you to arrive at a more complete evaluation of the applicant’s financial position.

Corporation (C-corp.)

The most common form of business organization, and one, which is chartered by a state and given many legal rights as an entity separate from its owners. Characterized by the limited liability of its owners, the issuance of shares of easily transferable stock, and existence as a going concern.

Credit Elsewhere Test (CET)

The test to determine the application’s disaster loan interest rate. This test analyzes the applicant’s available cash flow and net worth that may be used to overcome the disaster damage. The Business loan CET consists of two tests; 1) Cash Flow Test and 2) Available Assets Test. And, the Home loan CET consists of three tests; 1) Credit Score Test, 2) Cash Flow Test and 3) Available Assets Test.

Credit Score Test

Part of the home loan CET show a credit score of 700 or higher may enable applicants to borrow money at reasonable rates and terms. As such, an application may qualify for the higher disaster loan interest rate if the primary wage earner’s credit score is equal to or greater than 700.

Current Assets

A balance sheet item which equals the sum of cash and cash equivalents, accounts receivable , inventory, marketable securities, prepaid expenses, and other assets that could be converted to cash in less than one year.

Current Liabilities

A balance sheet item, which equals the sum of all money owed by a company and due within one year.

Days Payable

A measure of the average time a company takes to pay vendors, equal to accounts payable divided by annual credit purchases times 365.

Days Receivable

A measure of the average time a company's customers take to pay for purchases, equal to accounts receivable divided by annual sales on credit times 365.

DBA

Doing Business As - generally a trade name such as “Bob’s Burgers” is used, instead of the legal name of Blocker & Sons LLC.

Depreciation

A non-cash operating expense that reduces the value of a tangible asset as a result of wear and tear, age, or obsolescence. Depreciation is recorded in the financial statements of an entity as a reduction in the carrying value of the asset in the balance sheet and as an expense in the income statement.

Duplicated Interest

The amount of interest expensed that is added back to cash flow to prevent understating CASAD.

Economic Injury Disaster Loan (EIDL)

a working capital loan that provides necessary operating funds to enable eligible businesses to overcome the financial impact of a declared disaster. This loan may not be used to purchase long-term assets.

Extraordinary Items

Additional expenses that are outside “normal” operations and caused directly by the disaster.

GPM%

Gross Profit (GP) Net Sales (NS). The measure of every sales dollar left after paying for the product; what percent of the sales dollar is left to cover operating costs and to create a profit.

Guarantor

The legal entity and/or person who guarantees an obligation and has a legal duty to fulfill it.

Hardship Waiver

Method used to approve a lower interest rate, when one of the CET test conclusions results in a high rate determination.

Income Statement

Shows the entity’s income and expenses. (similar to a Profit & Loss Statement)

Injury Analysis

Measures the effects of the disaster on the overall financial condition of the business.

Injury Period

The time period during which the business feels the adverse effects of the disaster.

Liabilities

A financial obligation, debt, or claim, i.e. notes payable and accounts payable.

Lien

A legal claim against an asset which is used to secure a loan and which must be paid when the property is sold.

Limited Liability Entities (company/partnership)

An LLE provides business owners with the favorable liability protection of corporations with the informality and tax advantages available to partnerships. It is a pass-through entity, like a partnership where the taxable income or loss is reported on the tax returns of the owners.

Limited Partnership

A business organization with one or more general partners, who manage the business and assume legal debts and obligations, and one or more limited partners, who do not participate in day-to-day operations and are liable only to the extent of their investments.

Loan Authorization and Agreement (LA&A)

A contract between SBA and the borrower that spells out the terms and conditions of the loan.

NAICS

North American Industrial Classification System.

Normal Annual Sales

Those sales that would have been attained had the disaster not occurred. To determine this figure, you must first review historical sales figures and identify the trends.

Normal Gross Margin

The margin that would have been attained had the disaster not occurred. To determine this figure, you must first review historical sales figures and identify the trends.

Operating Leases

are deducted on the company’s operating expenses. If the lease is an operating lease, then the amount is already accounted for in total expenses and should not be shown as a scheduled debt.

P&L (Profit and Loss Statement)

also considered as Income Statement or Statement of Earnings. Measures Net Income or Loss over a defined period of time. In addition, having the simple formula of Revenues – Expenses = Net Income/Loss.

Partnership

A type of unincorporated business organization in which multiple individuals, called general partners, manage the business and are equally liable for its debts; other individuals called limited partners may invest but not be directly involved in management and are liable only to the extent of their investments.

Phase I

Process used to determine the amount of economic injury for a business in operation for at least a year prior to the disaster that had physical damage.

Phase II

Process to be used to determine economic injury for a business either in operation less than one year or not satisfied with result of Phase I analysis or submitted a Stand Alone EIDL request.

Physical Loans

Funds to repair/replace disaster damaged or destroyed business assets such as real estate, inventory, machinery and equipment, etc.

Primary Activity

The major business activity of the single legal entity or affiliated group, which is their predominant field of operation. (Commonly known as the Main Activity)

Principal

the owner(s) of the Applicant Entity that have a controlling financial interest in the business. SBA defines controlling interest as an owner who owns 20% or more of the Applicant Entity or are a General Partner or Managing Member regardless of ownership percentage.

Projection

An estimate of future economic or financial performance. Generally presented in the form of a Profit and Loss StatementP&L.

SAE (Stand Alone Economic Injury Disaster Loan)

provide necessary working capital to enable eligible businesses to overcome the financial impact of a declared disaster without providing assistance for physical disaster loss.

Schedule of Liabilities

A business debt schedule that lists all of the debts the business currently owes, including creditor name; original amount due; original due date; current balance; repayment status; maturity date; payment amount and frequency; and how debt is secured.

S-Corporation

A form of corporation, allowed by the IRS for most companies with 35 or fewer shareholders, which enables the company to enjoy the benefits of incorporation but be taxed as if it were a partnership.

Sole Proprietor

an individual who owns an unincorporated business by himself/ or herself.

Subsidiary

A company for which a majority of the voting stock is owned by a holding company. For SBA’s purposes, a subsidiary is an affiliate; a company owned or controlled by the applicant business.

Substantial Damage:

means uninsured or otherwise uncompensated disaster damages:

a) For homes is either:

40 percent or more of the home's pre-disaster fair market value (FMV) or replacement cost including the value of any land, whichever is less; or
50 percent or more of the structure’s pre-disaster fair market value or replacement cost, (excluding the value of any land) whichever is less.

b) For businesses is either:

40 percent or more of the aggregate value (lesser of market value or replacement cost at the time of the disaster) of the damaged real property (including the value of any land) and damaged machinery and equipment; or
50 percent or more of the aggregate value (lesser of market value or replacement cost at the time of the disaster) of the damaged real property (excluding the value of any land) and damaged machinery and equipment.

Trend Analysis:

A comparative analysis of a company's financial ratios over time.

Working Capital (WC):

The amount of current assets that is left after all current debts are paid.

Equipment Leasing ― The Ultimate Guide for Small Business Owners

info@starkcountyconnections.com (Karnchea Barchue) — Tue, 16 Nov 2021 20:17:52 GMT

Equipment leasing allows businesses to acquire equipment without purchasing it. Leasing agreements can be obtained from some of the same sources as equipment loans: banks, dealerships, equipment manufacturers, and even nontraditional financing companies. Lease payments are often significantly lower than loan payments, although balloon payments may be due at the end of the lease.

Ohio Business Funding offers equipment leasing for new and used heavy equipment. Requirements include a credit score of at least 600 and at least 5% down. Borrowers who qualify can secure financing of up to $500,000.

How Equipment Leasing Works

Leasing requires businesses to make regular payments in exchange for the use of equipment. It is ideal for companies that need equipment that may have to be upgraded regularly or equipment that would be too expensive to purchase outright. Depending on the type of lease, the borrower may gain ownership of the equipment, or there may be no transfer of ownership.

Equipment leases usually fall into one of two categories:

Capital lease: The business receives all benefits and drawbacks of ownership. The most common form of lease, a capital lease, is best for expensive equipment that a business intends to keep long-term. With a bargain purchase agreement, the business gains ownership at the end of the lease.

Operating lease: The business doesn’t receive benefits and drawbacks of ownership with an operating lease ― it is simply a rental. Ownership doesn’t transfer upon the completion of the lease, which is ideal for items that need frequent replacement due to short useful life.

Equipment Lease Qualifications, Rates & Terms

Equipment lease qualifications are often similar to equipment loan qualifications. The equipment is used as the collateral for the lease, meaning rates are lower than using an unsecured line of credit to purchase equipment.

5 Factors That Determine Qualification

As is the case with equipment financing, several factors determine the likelihood of approval when obtaining an equipment lease. Those factors include:

Credit score
Business history, including time in business and annual revenue
Type and size of the lease
Length of the lease
How well the equipment keeps its value as it depreciates

Businesses will need to provide at least one year’s worth of income tax returns; however, two or three may be required by some lenders. Interest rates will be better for well-qualified borrowers, with some lenders offering rates as low as 6% for equipment leases.

Equipment Lease Tax & Accounting Treatment

As with equipment purchases, equipment leases can be deducted from your business taxes in certain circumstances as you can claim the depreciation on the equipment. In some cases, the entire amount of depreciation can be claimed in year one instead of graduated depreciation during the life of the lease. As always, consult your tax professional for guidance on the tax benefits of leasing.

We recommend speaking with a certified public accountant (CPA) or tax professional about these options before you decide.

$1 Buyout Lease

A $1 buyout lease is similar to an equipment loan. Borrowers make payments to rent the equipment, and at the end of the lease, have the option to purchase the equipment for $1. This makes the payment size the highest of any of the lease types. The asset leased and liability will show up on your balance sheet.

Interest rates will be the lowest on this type of lease. Use this type when you want to own the equipment at the end of the lease.

$1 Buyout Lease Tax and Accounting Treatment

Here are some potential tax and balance sheet implications of the $1 buyout lease. Consult your tax professional for more information.

Depreciation: Under Section 179, equipment value can be deducted up to $1 million
Payment deduction: Interest payments can be deducted as interest expense
Balance sheet: The equipment will be listed as an asset and a liability

Who it’s best for: This is best for borrowers who want to purchase the equipment but want to spread out the cost of the equipment into equal payments instead of having a larger lump sum at the end of their term.

10% Option Lease

Like the $1 buyout lease, a 10% option lease allows the borrower to make payments and have the option to purchase the equipment for 10% of its initial value at the end of the lease. For example, a $50,000 piece of farm equipment would have a final payment of $5,000 at the end of the lease to transfer ownership. The monthly payment would be lower on the 10% option lease than the $1 buyout lease, with the larger balloon payment held at the end of the lease.

While the 10% option lease can be used for equipment that a borrower would want to gain ownership of at the end of the lease, the borrower would also have the option to walk away at the end of the lease, foregoing the 10% payment and returning the leased equipment.

10% Option Lease Tax and Accounting Treatment

Here are some potential tax and balance sheet implications of the 10% option lease. Consult your tax professional for more information:

Depreciation: Under Section 179, equipment value can be deducted up to $1 million
Payment deduction: Interest payments can be deducted as interest expense
Balance sheet: The equipment will be listed as an asset and a liability

Who it’s best for: This type of loan is best for businesses that aren’t sure whether they want to purchase the equipment at the end of the term.

Fair Market Value Lease

A fair market value (FMV) lease allows the borrower to make payments and use the equipment throughout the lease and allows the borrower to purchase the equipment at the end of the lease for fair market value. Borrowers can also choose to renew the lease or return the equipment at the conclusion of the lease.

In contrast to the first two types of leases discussed here, the borrower does not get the benefits or drawbacks of ownership. It also means that only monthly payments can be deducted from the lessee’s taxes. These leases are the hardest to qualify for, meaning a strong credit score and high annual revenue are needed and, usually, the equipment leased must be a high-value item.

This is not an ideal lease type if a borrower plans to purchase the equipment at the end of the lease. Monthly payments are lower, but the interest rate will often be higher than the $1 buyout or the 10% option because the lessor has a higher risk due to the likelihood of having to find another renter for the equipment.

FMV Lease Tax and Accounting Treatment

Here are some potential tax and balance sheet implications of the FMV lease. Consult your tax professional for more information:

Depreciation: Not available
Payment deduction: Only full payments can be deducted as operating expenses
Balance sheet: The equipment must be listed as an asset and a liability

Who it’s best for: An FMV lease is best for businesses acquiring equipment that they know they will replace at the end of the term or equipment that has a very short shelf life.

10% Purchase Upon Termination Lease

The 10% purchase upon termination (PUT) lease is the same as the 10% option lease with one significant difference: the borrower does not have the option to walk away. This decreases the risk for the lessor because the lessee must purchase the equipment at the end of the lease. Also, this makes it easier for borrowers to qualify for 10% PUT if they have bad credit.

All other information regarding payments and tax implications from the 10% option lease apply here.

10% PUT Lease Tax and Accounting Treatment

Here are some potential tax and balance sheet implications of the 10% PUT lease. Consult your tax professional for more information:

Depreciation: Under Section 179, equipment value can be deducted up to $1 million
Payment deduction: Interest payments can be deducted as interest expense
Balance sheet: The equipment will be listed as an asset and a liability

Who it’s best for: This type of lease is best for businesses that want to purchase the equipment at the end of the term but need a lower payment than the $1 buyout or 10% option leases would provide.

Terminal Rental Adjustment Clause Lease

A terminal rental adjustment clause (TRAC) lease is typically used for semi-trucks and other vehicles. It can be either a capital or operating lease. This lease gives the lessee flexibility to set up a higher balloon payment at the end of the lease, which is why it is ideal for truck or vehicle loans. It has lower monthly payments throughout the lease because of the higher balloon at the end.

Borrowers should have strong credit profiles because of the increased risk to the lessee with the high balloon at the end. This type of lease is used when the lessee doesn’t want to own the asset at the end of the lease, usually because they want to upgrade to a newer-model vehicle.

TRAC Lease Tax and Accounting Treatment

Here are some potential tax and balance sheet implications of the TRAC lease. Consult your tax professional for more information:

Depreciation: If it is a capital lease, it can be depreciated. Operating leases cannot be depreciated.
Payment deduction: Full payments are deductible if it is an operating lease. Otherwise, interest paid can be deducted in a capital lease.
Balance sheet : This will be listed as an asset and a liability in most cases. Check with your tax professional.

Who it’s best for: A TRAC lease is only for vehicle purchases or leases and is right for those who need more flexibility in deciding how much to pay at the end of the term if they want to purchase the vehicle.

When to Use an Equipment Loan Instead

Many equipment leases are very similar to equipment loans. One of the biggest differences is that equipment loans always result in a transfer of ownership at the end of the loan. Also, loans can be paid off early with no prepayment penalty. For businesses looking to upgrade equipment at the end of a repayment period, leases give the borrower more flexibility. In some cases, lessees can walk away from a balloon payment at the end of a lease, making for lower monthly payments than loans with no ownership requirement at the end.

Businesses should consider the following when deciding between a lease or a loan:

Are lower payments necessary? Leases often offer lower payments.
Is ownership necessary or desired at the end of payments? This is guaranteed with loans, although certain types of leases allow for this as well.
Will the borrower look to upgrade at the end of payments? Leases make more sense for businesses looking to upgrade because, with many leases, they will be walking away from balloon payments.

Bottom Line

Many factors go into the decision to get an equipment lease ― as opposed to an equipment loan ― and the type of equipment lease. Consult a tax professional on all large capital expenditures to determine the best course of action for the business. In many cases, leases make sense, especially if the business intends to upgrade equipment at the end of the lease or if it needs lower payments provided by leases with balloon payments at the end. If a business wishes to lease equipment to gain ownership at the end, a $1 buyout lease or a 10% PUT lease makes the most sense.

Small Business Financial Exchange (SBFE) Credit History

info@starkcountyconnections.com (Karnchea Barchue) — Sun, 13 Jun 2021 16:47:57 GMT

UPDATE: As of November 2012, Ohio Business Funding has been reporting payment behavior for small businesses.

As part of our mission to make money smarter, Ohio Business Funding reports customer credit performance to the Small Business Financial Exchange (SBFE®). That means you can use Ohio Business Funding to build credit history and credit score for your business simply by paying on time.

What is the Small Business Financial Exchange?

SBFE is a nonprofit trade association that gathers and protects the largest aggregation of small business payment data in the U.S. It’s not a credit bureau and doesn’t provide credit scores or credit reports. Governed by the small business lending industry, the association makes business data available for approved Certified Vendors.

Who are SBFE Certified Vendors?

According to SBFE, “Certified Vendors must undergo a rigorous certification process and ongoing oversight designed by the industry in order to receive this designation.” Certified Vendors include Dun & Bradstreet , Equifax , Experian , and LexisNexis Risk Solutions .

How do Certified Vendors get and use your data?

As an SBFE member, Ohio Business Funding reports your balances and payments to SBFE monthly. Other SBFE members who access and report small business data include the 10 largest U.S. business card issuers and 12 of the top 15 commercial lenders.

Through the SBFE Data Warehouse, the association securely shares your data with Certified Vendors, who combine your Ohio Business Funding account history with data reported by other SBFE members and public data to create a credit report and credit risk score for your business.

SBFE members—including banks, credit unions, credit card issuers, and other lenders—rely on data and analytics from Certified Vendors to offer loans or extend credit to small businesses. SBFE data represents more than 38 million small and micro businesses dating back to 2001.

Is SBFE data secure?

Business data reported by Ohio Business Funding and other financial institutions is reported through the SBFE Data Warehouse where it’s securely stored and protected from any use outside the intended purpose.

To learn more, visit sbfe.org .

Paycheck Protection Program has run out of money for most borrowers

info@starkcountyconnections.com (Karnchea Barchue) — Thu, 06 May 2021 00:50:59 GMT

What you need to know

The Paycheck Protection Program has run out of money for most borrowers before its planned May 31 end, the Small Business Administration said.

Going forward, the program will only accept new applications from community financial institutions, which typically serve minority borrowers, as about $8 billion in funding was set aside for such businesses.

The SBA will continue to fund outstanding approved PPP applications from other lenders but won’t accept any new applicants.

Source: Carmen Reinicke, MAY 330-294-9634

ELID Round 3

info@starkcountyconnections.com (Karnchea Barchue) — Sat, 17 Apr 2021 02:14:21 GMT

SBA to Increase Lending Limit for COVID-19 Economic Injury Disaster Loans

The U.S. Small Business Administration is increasing the maximum amount small businesses and non-profit organizations can borrow through its COVID-19 Economic Injury Disaster Loan (EIDL) program. Starting the week of April 6, 2021, the SBA is raising the loan limit for the COVID-19 EIDL program from 6-months of economic injury with a maximum loan amount of $150,000 to up to 24-months of economic injury with a maximum loan amount of $500,000.

“More than 3.7 million businesses employing more than 20 million people have found financial relief through SBA’s Economic Injury Disaster Loans, which provide low-interest emergency working capital to help save their businesses. However, the pandemic has lasted longer than expected, and they need larger loans. Many have called on SBA to remove the $150,000 cap. We are here to help our small businesses and that is why I’m proud to more than triple the amount of funding they can access ,” said SBA Administrator Isabella Casillas Guzman.

Businesses that receive a loan subject to the current limits do not need to submit a request for an increase at this time. SBA will reach out directly via email and provide more details about how businesses can request an increase closer to the April 6 implementation date. Any new loan applications and any loans in process when the new loan limits are implemented will automatically be considered for loans covering 24 months of economic injury up to a maximum of $500,000.

This new relief builds on SBA’s previous March 12, 2021 announcement that the agency would extend deferment periods for all disaster loans, including COVID-19 EIDLs, until 2022 to offer more time for businesses to build back. In order to shift all EIDL payments to 2022, SBA will extend the first payment due date for disaster loans made in 2020 to 24-months from the date of the note and to 18-months from the date of the note for all loans made in the calendar year 2021.

Paycheck Protection Program will likely run out of money

info@starkcountyconnections.com (Karnchea Barchue) — Sat, 17 Apr 2021 02:00:52 GMT

The Paycheck Protection Program has a problem. It will likely run out of money before May 31 deadline

Small businesses are realizing they might not have much time to tap the Paycheck Protection Program as they thought.

That’s because the money is running out.

Lawmakers overwhelmingly supported extending the PPP last month, moving the deadline to May 31 from March 31. The program, which was established by the CARES Act last year to provide small businesses with loans that are forgivable if mostly spent on payroll, reopened in January for a second round with more than $284 billion in funding.

The American Rescue Plan passed in March appropriated an additional $7.25 billion to the PPP, bringing the total to nearly $292 billion.

As of April 5, the Small Business Administration, which oversees the program, has approved nearly 4 million PPP loans worth about $224 billion, according to the agency. That means about $68 billion is left.

The idea of money running out hadn’t been top of mind, at least in this round of the program, until just before the extension passed. In a March 24 hearing before the Senate Committee on Small Business Entrepreneurship, Patrick Kelley, associate administrator at SBA’s Office of Capital Access, noted that the PPP had about $79 billion left, which would be exhausted by mid-April if applications continued at a similar pace.

New $10,000 EIDL Grants: Do You Qualify?

info@starkcountyconnections.com (Karnchea Barchue) — Wed, 17 Feb 2021 13:34:11 GMT

The Economic Aid Act signed December 27, 2020 includes additional funding for Economic Injury Disaster Loan (EIDL) loans and grants. This article includes information about the Targeted EIDL grant application process provided by the SBA.

Congress has allocated another $20 billion in EIDL grants (advances) in the new stimulus bill. By way of background, the CARES Act that was passed March 27, 2020 included a grant (or advance) for those who applied for an EIDL loan due to the COVID-19 crisis, in the amount of up to $10,000. The SBA later determined that those grants would be made in an amount of $1000 per employee. In addition, the funds available for grants were exhausted before all eligible businesses received them. This legislation will enable some business owners who qualify to receive the full $10,000 grant.

If you are not familiar with Economic Injury Disaster Loans (EIDL) and grants due to the COVID-19 crisis, we recommend you read this article.

Please keep in mind this information is changing rapidly and is based on our current understanding of the programs. It can and likely will change. Although we will be monitoring and updating this as new information becomes available, please do not rely solely on this for your financial decisions. We encourage you to consult with your lawyers, CPAs and Financial Advisors.

Do I qualify for the new Targeted EIDL Advance (grant)?

Targeted EIDL advances (grants) are an extension of the emergency EIDL grants in the CARES Act, but the requirements are somewhat different.

Important: Only businesses that previously applied for an emergency EIDL advance (grant) and meet the new criteria will be eligible for the Targeted EIDL advance (grant).

To qualify for the full $10,000 targeted EIDL grant, a business must:

Be located in a low-income community, and

Have suffered an economic loss greater than 30%, and

Employ not more than 300 employees

In addition, the business must qualify as an eligible entity as defined in the CARES Act:

A small business, cooperative, ESOP Tribal concern, with fewer than 500 employees;

An individual who operates under as a sole proprietorship, with or without employees, or as an independent contractor; or

A private non-profit or small agricultural cooperative.

The business must have been in operation by January 31, 2020

The business must be directly affected by COVID-19

Economic loss is defined as “the amount by which the gross receipts of the covered entity declined during an 8-week period between March 2, 2020, and December 17, 2021, relative to a comparable 8-week period immediately preceding March 2, 2020, or during 2019.” The SBA will develop a formula for seasonal businesses.

A low-income community is defined in Section 45D(e) of the Internal Revenue Code of 330-294-9634 as follows:

“The term “low-income community” means any population census tract if the poverty rate for such tract is at least 20 percent, or in the case of a tract not located within a metropolitan area, the median family income for such tract does not exceed 80 percent of statewide median family income, or in the case of a tract located within a metropolitan area, the median family income for such tract does not exceed 80 percent of the greater of statewide median family income or the metropolitan area median family income.” (There are additional ways areas may qualify as a low-income community in the legislation.)

This Census tool may help you understand if your business is located in one of these areas. However, ultimately the SBA will determine which businesses qualify. The SBA states that “additional details on how SBA will identify low-income communities will be available soon on www.sba.gov/coronavirusrelief.”

How do I demonstrate economic loss?

Getting your business tax documents organized and up to date will be essential to applying for this grant and demonstrating you qualify.

In a recent If you have not previously applied for EIDL, you may apply at SBA.gov. You will be able to apply for the low interest rate EIDL loan through December 31, 2021 as long as funds are available. However you will not be considered for an EIDL advance (grant) at this time.

Can an EIDL loan be forgiven?

No. EIDL loans must be repaid over 30 years. Unlike PPP loans, there is no forgiveness process for these loans.

Can I also apply for a Paycheck Protection Program (PPP) loan?

Yes! In addition to the EIDL grants your business may qualify for a PPP loan. These loans may be fully forgiven if they are spent on the right expenses (primarily payroll) which essentially turns them into a grant. Businesses may apply for both PPP and EIDL if they qualify..

What is a business acquisition loan?

info@starkcountyconnections.com (Karnchea Barchue) — Sat, 23 Jan 2021 02:44:13 GMT

Acquisition loans are specifically used to acquire another business or its assets.

Acquisition loans are used to help business owners acquire another business’s assets or even entire companies.
Acquisition loans come in several varieties, from conventional term loans to revenue-based loans, and lines of credit.
Generally, acquisition loans use the acquired assets as collateral to secure the loan.
This article is for business owners interested in using an acquisition loan to expand their business and acquire new assets.

Acquisition loans are loans that businesses use to acquire other businesses or strategic assets, such as equipment. These are purchases that can’t typically be made using the company’s normal cash flow, so businesses use loans to make the purchase without having to raise capital. Using an acquisition loan, your company can make large strategic purchases with as little as 15% down, then pay off the balance over time.

Acquisition loans are extremely common for companies that are growing quickly as well as those actively engaged in mergers and acquisitions. They’re also sometimes used by companies that utilize large or expensive equipment, like construction companies, data storage providers, or large contractors. Acquisition loans help these businesses acquire crucial assets (including other companies) that can help them grow their bottom lines.

What is a business term loan?

info@starkcountyconnections.com (Karnchea Barchue) — Sat, 23 Jan 2021 02:32:05 GMT

A business term loan is a lump sum of money you borrow from a lender, then pay back at fixed intervals — with interest — over a set period of time. Depending on your lender, you’ll pay off the loan on a weekly, bi-weekly, or monthly basis. Repayment periods can last from a few months up to 10 years or more.

Interest rates also vary by lender, but they can be either fixed or variable. Fixed rates stay the same, while variable rates change depending on the state of the market.

Why term loans?

There are a number of reasons term loans are a fan favorite among business owners. Here are just a few:

Lower interest rates: Due to their longer durations, business term loans are typically available at lower interest rates than short-term business loans.

Cash flow flexibility: Term loans can help free up your cash flow. When you get funding for big investments or purchases from a term loan, you can allocate your remaining cash for short-term operational expenses and emergencies.

Set payment structure: Business term loans give you more than just funding — they can also bring peace of mind. With a term loan, you have a predictable repayment schedule, which means you can plan and budget more easily.

Simple, streamlined application process: Applying for an online term loan is fast and straightforward. You can fill out an application in minutes from the comfort of your couch, and usually hear back within a few days.

Business advantages: The interest on a term loan is tax deductible, so you can save some money come tax season. Plus, making repayments on time can boost your business credit score, helping you score future financing opportunities at lower interest rates.

Autonomy: Since a term loan is a form of debt financing, you aren’t sacrificing equity for capital. Your business’s ownership stays 100% with you.

What is a startup business loan?

info@starkcountyconnections.com (Karnchea Barchue) — Sat, 23 Jan 2021 02:16:09 GMT

Startup business loans aren’t a specific type of loan; rather, they are any type of loan used to open a new business. You might need this money to help develop a product or service, hire employees, lease space or equipment, and buy inventory. Startup loans can also include funding for businesses that have opened their doors but are still in the earliest stages.

Nine types of startup business loans and financing options

Self-financing
Financing from friends or family
SBA loans
Local business financing
Crowdfunding
Grants
Asset-based financing
Business lines of credit
Online term loans

Startup loans generally don’t require business credit or high revenue—lenders know they’re lending money to support a new idea. However, your personal credit and experience in the industry can affect your eligibility and loan terms. You can also use different types of financing to support your business

How to get approved for an SBA Loan

info@starkcountyconnections.com (Karnchea Barchue) — Sat, 23 Jan 2021 01:56:21 GMT

SBA Loan

An SBA loan is a type of financing provided by private lenders (such as banks and credit unions) and partially guaranteed by the U.S. Small Business Administration (SBA). This partnership helps reduce the risk for lenders, making it easier for small businesses to access funding with favorable terms.

Key Features:

Low Interest Rates : Typically lower than traditional loans due to the SBA guarantee.
Long Repayment Terms : Ranges from 7 to 25 years, depending on the loan purpose.
Flexible Use : Funds can be used for working capital, equipment purchases, real estate, debt refinancing, or business expansion.
Government-Backed : Reduces lender risk and increases approval chances for borrowers.

Popular SBA Loan Programs:

7(a) Loan Program :

Most versatile.
Maximum loan amount: $5 million.
Ideal for working capital, equipment, real estate, or refinancing.

504 Loan Program :

Focused on real estate and large equipment purchases.
Maximum loan amount: $5.5 million.

Microloan Program :

Designed for startups and small businesses.
Loan amounts up to $50,000.
Often used for working capital or purchasing supplies.

Disaster Loans :

Assists businesses affected by natural disasters or economic hardships.

Basic Qualifications:

Business Size : Must meet the SBA’s definition of a small business.
Good Credit History : Strong personal and business credit scores.
Time in Business : Typically 2+ years (startups may require additional documentation).
Business Plan : Demonstrates the ability to repay the loan.

Pros:

Favorable terms and rates.
Accessible to businesses with limited collateral or credit history.
Support for long-term growth.

Cons:

Lengthy application process.
Requires thorough documentation.
SBA guarantee fees may apply.

Would you like assistance with applying for an SBA loan or understanding the documentation requirements?

Ohio Business Funding News Feed

All You Need To Know About Business Consolidation Loans

Business Consolidation Loan

Key Features:

Benefits of a Business Consolidation Loan:

Common Uses:

Drawbacks:

Requirements:

Example:

Can A Payroll Loans Help To Grow Your Business?

Payroll Loan

Key Features:

When to Use a Payroll Loan:

Benefits:

Drawbacks:

Requirements:

Example:

Why You Should Invest In Real Estate

Commercial Real Estate Financing

Key Features:

Types of Commercial Real Estate Loans:

Common Uses:

Advantages:

Disadvantages:

Example:

Why Your Business Should Finance Equipment

Equipment Financing

Key Features:

Common Uses:

Advantages:

Disadvantages:

Example:

Term Loan vs Working Capital explained

Business Term Loan

Key Features:

Common Uses:

Advantages:

Disadvantages:

Example:

Business Charge Cards With NO PG

Business Charge Card

Key Features:

Benefits:

Popular Options:

Business Line of Credit

Business Line of Credit

Key Features

Benefits

Types of Business Lines of Credit

Qualification Requirements

How It Works

Pros

Cons ﻿

Business Credit Card Stacking

Business Credit Card Stacking

Key Benefits:

Risks:

Ideal for:

Grants For Women Owned Businesses

What Are Small Business Grants?

Popular Grants for Women-Owned Businesses

Tips for Grant Applications

Supplementing Grants with Business Loans

How Ohio Business Funding Can Help

Equipment Sale and Leaseback: How It Works and Why It’s a Smart Financing Option

Equipment Sale and Leaseback: How It Works and Why It’s a Smart Financing Option

What is Equipment Sale and Leaseback?

How Does Equipment Sale and Leaseback Work?

Benefits of Equipment Sale and Leaseback

Is Equipment Sale and Leaseback Right for Your Business?

Conclusion

Unlock Your Business Potential with Equipment Financing: Get the Tools You Need Without Breaking the Bank

Unlock Your Business Potential with Equipment Financing: Get the Tools You Need Without Breaking the Bank

Unlocking Real Estate Opportunities: How a Business Real Estate Loan Can Help You Grow

Unlocking Real Estate Opportunities: How a Business Real Estate Loan Can Help You Grow

Unlock Financial Freedom: How MCA Consolidation Can Help Your Business Thrive

Unlock Financial Freedom: How MCA Consolidation Can Help Your Business Thrive

FICO® SBSS℠ Score — A Key SBA Loan Credit Score Explained

What is the FICO SBSS Credit Score?

What is a Good FICO SBSS Score?

Cons