January 11, 2018

Business Credit FAQ

What Is Business Credit?

Simply put business credit is a loan the company obtains for their business. It is not reported and the principle’s personal credit.

Types Of Business Loans

Bank Loans

A bank loan can be secured where you need some type of collateral to put up as a guarantee in case the loan defaults due to non-payment. There are unsecured loans where no collateral is required. These types of loans usually have more stringent guidelines to qualify but offer the best rates.

SBA Loans

These are loans that are guaranteed by the U.S. Small Business Administration or SBA made by lenders.

The SBA offers two loan programs the SBA7(a) for microloans up to $50,000 and the 504 program which provide financing for fixed assets and disaster loans.

Mezzanine Finance

Secures a loan on the company equity. If the loan is not paid back the lender own part of the company.

Asset-Based Finance

The is secured by the companies assets rather than the borrower’s credit rating and length of time in business.

Invoice Finance (Factoring)

This type of credit allows a company to borrow against unpaid invoices. Very common to sustain cash flow.

Micro Loans

These are loan smaller than $100,000

What Types Of Loan Does BusinessCreditBuddy.com Do?

Businesscreditbuddy.com provided business lines of credit and term loans as well as financing for commercial real estate.

How Do I Qualify For A Business Credit?

How to qualify for business credit really depends on what type of business credit that you want.

For example, to qualify for a business line of credit you will typically need a 720 credit score and can show at least average deposits of $10K in a 3 month period and have been in business for at least a year as a rule of thumb. However, it is possible to get business credit if you have a lower credit score.

How Long Does It Take To Get Funded?

It usually takes anywhere from a few days to 30 days to get funding. How long it takes depends on the borrower’s ability to provide all of the documents that are required to underwrite the loan.

What Documents Are Required?

In order to get approved for a business line of credit or term loan, you will need the last 3 months banks statement showing average deposits of at least $10K, your credit report showing all three scores. FYI we recommend using CreditCheckTotal.com if you don’t have a credit report. You will also need the front and back copy of your driver’s license. Two business tax returns or one year if only in business for one year. For proof of business, you will need the Articles of Incorporation for Inc’s and Operating Agreement for LLC’s

How Much Are The Fees?

Fees can range from 7.5% to 15% depending on your business type, credit score, and cash flow

How much are the interest rates?

Interest rates can range from 6%-15% depending on the scores, loan amount and loan type.

How Do I Get Started?

To get started just complete a quick online form and forward your bank statements and credit report to info@businesscreditbuddy.com and we will contact you will a soft quote.

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