Business Lending, Financing and Loan Programs Matching Your Business Needs - Biz2credit

Financial Product	Documentation Required	Pros	Cons
Accounts Receivables Financing
A Business line of credit or term securitized by a company's accounts receivables. This is an ideal product for businesses with corporate clients and/or long payment cycles. Example: Limousine rental companies, Wholesale equipment suppliers, IT Staffing Companies, Landscaping Companies	Accounts receivable aging statement Copy of drivers license Last three months of bank statements Personal financial statement for previous year	Lien placed only on accounts receivables Business loans available for up to 90 % of the accounts receivables Personal guarantee NOT required Not mentioned on the credit report Will not affect debt-to-income ratio Business loans not dependent on credit score Available to businesses less than two years old	Business loan amount dependent on amount of accounts receivables Must rotate the line in 120 days (depending on the business payment cycle) Accounts Receivables cycles longer than 90 days do not count for much (unless clients are blue chip)
Credit Card Receivables
Financial Product	Documentation Required	Pros	Cons
A term loan for 150 percent of business credit card receivables over past quarter. This is an ideal business loan product for companies with a large volume of credit card sales. Example: Restaurants, Supermarkets, Retail Stores, Online consumer companies	Credit card receivables statements ( Visa, Mastercard, Discover, Amex, Diners) for past three months One month of bank statement showing the realization of credit card receivables Copy of drivers license Description of credit card payment processors Three vendor references Copy of a canceled check from customer	Great financing alternative for businesses unable to get a business loan from a traditional lender Personal guarantee NOT required Not mentioned on the credit report Will not affect debt-to-income ratio Low credit score does not affect credit decision Available to businesses less than two years old	Usually more expensive than a normal business line of credit Capped at 150k for a business regardless of higher credit card receivables Payment processor needs to be switched and can lead to short-term operational disruption
Unsecured Business Line of Credit
Financial Product	Documentation Required	Pros	Cons
An institution lends against the goodwill, business and personal credit score and overall credit worthiness of the business. This is an ideal business loan product for most industries.	Certificate of Incorporation Filing Receipt Tax ID papers Copy of Drivers License Utility bills Last three months of banks statements Accounts receivables aging statements for past quarter (for lines more than $100,000) Credit application of lending institution (filled and signed by borrower) Business tax returns for last two years (for line more than $100,000) Personal tax returns for last two years (for line more than $100,000)	Not mentioned on credit report Will not affect debt-to-income ratio Cheaper than accounts receivables and credit card receivables products Takes two weeks to process Minimal paperwork required Improves business credit score (tracked by D&B) Low closing costs Floating rates taking advantage of falling interest rates No prepayment penalties Only interest payments required monthly Can easily be rolled over for a new term Interest only paid on amount of line being used	May file a UCC lien Usually only available for businesses more than 2 years old Requires good credit score (above 650) Difficult to access amounts over $100,000 from a single lender Settling credit lines required by some banks at end of 1st year. It can lead to short term cash flow issues Floating interest rate susceptible to rate hikes
Business Term Loan
Financial Product	Documentation Required	Pros	Cons
A fixed amount of money lent by a bank over a fixed term. This is an ideal business loan product for industries with large initial capital outlays. Example: Construction companies, car showrooms, retail stores, security companies	Certificate of Incorporation Filing Receipt Tax ID papers Copy of drivers license Utility bills Last three months of banks statements Last two years of business tax returns (for amounts over $100,000) Last two years of personal tax returns (for amounts over $100,000) Accounts receivables statement for previous quarter (for amounts over $100,000)	Not mentioned on the credit report Will not affect debt-to-income ratio Cheaper than accounts receivables and credit card receivables products Takes about two weeks to process Little paperwork required (for amounts around $100,000) Improves business credit score (tracked by D&B) Low closing costs Fixed interest rates	May file a UCC lien Usually requires healthy credit score Difficult to access amounts over $100,000 from a single lender Monthly payments involve interest and principal (for unsecured loans) Prepayment penalties apply Must pay interest on full business loan amount
Inventory Financing
Financial Product	Documentation Required	Pros	Cons
Factoring or general business financing with inventory held as collateral. This is an ideal product for businesses with high value inventory and/or solid client list (low risk). Example: Perfume distributors, diamond merchants, high-end fashion goods, high-end retailers, furniture stores, lifestyle stores	Certificate of Incorporation Filing Receipt Tax ID papers Copy of drivers license Utility bills Last three months of banks statements Inventory lists and invoices Last two years of business tax returns (for amounts over $100,000) Last two years of personal tax returns (for amounts over $100,000)	Not mentioned on credit report Will not affect debt-to-income ratio Cheaper than accounts receivables and credit card receivables products Takes two weeks to process Little paper work required Improves business credit score quickly (tracked by D&B) Low closing costs Floating rates taking advantage of falling interest rates No prepayment penalties	Lender needs monthly updates on inventory count and average turn time Floating rates are susceptible to interest rate hikes Can involve filing a UCC lien Promotional rates may increase after one year
Equipment Financing
Financial Product	Documentation Required	Pros	Cons
A business loan with a floating or fixed rate securitized by business equipment.	Estimation of equipment value from supplier Estimation of capital improvement and construction costs Last two years of business tax returns Last two years of personal tax returns	Cheaper than a business line of credit (50 to100 basis points) Depreciation can be claimed for the equipment to lower tax liability Lien only on the equipment Personal guarantee NOT required	Funded up to 100 percent of equipment value

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