Frequently Asked
Questions
Our Business Financing Advisors will help you find the best financing options for your business to get you more funding, better terms, and lower interest rates. We’re available to explain every step of the process from applications to your re-payment schedule!
Business Line of Credit
What is a Business Line of Credit?
A business line of credit is a type of small business loan that gives a business flexibility when accessing funds. Rather than a fixed amount at one time, funds are accessible as needs may arise. The idea is to allow you to be able to scale your business without being hindered by hiccups along the way. Some of these scaling activities may include inventory purchases, machine repairs, taking on new opportunities, and bridging the occasional cash-flow gap.
For better loan terms it is important for your small business to maintain a good credit score to help build its profile. Making on-time payments and paying down your debt on a regular basis are some of the ways to maintain your credit score. Depending on your needs, a business line of credit could be one of the most straightforward solutions to meet your business goals.
To learn more about how a business line of credit can help with working capital in your business complete our 15-second application to speak with a business financing advisor.
Types of Business Line of Credit: Secured and Unsecured
A secured business line of credit:
A secured business line of credit requires your business to use an asset of choice, usually real estate as collateral to obtain the business line of credit. This may be the best option for businesses that may not have enough time in business or past credit issues that would hinder them from receiving an unsecured loans. The nature of a secured business line of credit is the institution will utilize the collateral for payment if a business defaults on their loan.
The unsecured business line of credit:
An unsecured business line of credit does not require the use of an asset as collateral, similar to a credit card. However, lien and personal guarantee may be necessary. These types of loans are generally more of a risk to the lender. Without the use of collateral, your business must have a strong credit score and a positive business record of accomplishment. An unsecured business line of credit may have higher interest rates than secured due to the risk to the lender.
To learn more about how a secured or unsecured business line of credit may benefit your business complete our 15-second application to speak with a business financing advisor.
Why Get a Business Line of Credit?
Sometimes you may want your business to access funds when it needs them most or when the demands for working capital increase without having to always apply for a loan when needs arise.
A business line of credit is a business tool that small business owners use as a strategy so they can access funds to sustain the day-to-day business needs. The line of credit allows the business to access funds as soon as they need it. It is one of the ways companies use to access their capital in both short-term and long-term financial need as they seek further revenue-generating streams.
How Does a Business Line of Credit Work?
A business line of credit works differently than a regular term loan, which provides a one time sum of cash paid over a fixed period of time or set term. A business line of credit allows you to easily access an already established amount of funds to use as the need arises.
As you repay, funds continue to become available as long as you don’t exceed your credit limit. Interest is only charged on the amount of funds used at a particular time, and not on the full line of credit amount.. The repayment period for the credit limit varies depending on the lender. However, in most cases, the repayment period is typically a weekly, monthly, or a periodic schedule which is set prior to receiving the line of credit.
Thinking that a business line of credit might be the right fit for your business? Complete our 15-second application to learn more.
What is the Best Business Line of Credit?
Alternative lenders tend to offer the best business lines of credit available on the market. When searching for the best business line of credit it's important to find options that feature:
- Fast process (from application to funding)
- Access to a wide variety of lending options
- A true revolving line - access to additional funds once you begin to pay back the line
- Ongoing access to the line to be used to assist with cash-flow in times of opportunity and emergency
- Better rates and terms that meet your business needs
To learn more about what is considered to be the best business line of credit options available today, complete our 15-second application and speak with a business financing advisor to weigh your options.
Equipment financing
What is Equipment Financing
Equipment financing refers to the type of funding companies utilize to purchase business-related equipment. Obtaining these assets can be through equipment leasing or equipment financing which doesn’t require businesses to pay out of pocket large amounts of cash ultimately freeing up working capital within the business.
To learn more about equipment financing and how it may help with your business needs complete our 15-second application to speak with a business financing advisor.
What Is Equipment Lease Financing?
Equipment lease financing is similar to equipment financing except when leasing, you are technically paying the equipment’s owner to rent it each month. At the end of the leasing period, you can opt for a buyout and purchase the equipment or end the leasing contract. Keep in mind, a disadvantage of renting equipment without the prospect of owning it may be expensive in the long run.
How Does Equipment Financing Work?
Equipment financing refers to a loan used to purchase business-related equipment. Instead of using your working capital to purchase the qualifying equipment, equipment financing allows you to finance the full equipment cost and repay the interest and principal over fixed terms. Once the payback period is complete, you will own the piece of equipment outright.
How To Finance Heavy Equipment
Similar to equipment financing, heavy equipment loans allow businesses to borrow money to purchase large pieces of machinery such as, forklifts, cranes, bulldozers, or other large machinery you need a license or special training to operate. Financing heavy equipment helps free up businesses cash flow while giving you the ability to continue to serve your customers.
SBA Loans
What Is An SBA Loan?
An SBA Loan is a government backed loan that can be used to start or expand a business. The loan has certain requirements for eligibility, such as size standards, proving the ability to repay the loan and solid business purpose. The SBA works with specific lenders to offer their programs which eliminate the risk from the lender since they are backed by the government.
How To Apply For An SBA Loan
n order to apply for an SBA loan, you should follow these steps:
- Check your eligibility
- Choose the right program for your business
- Research trusted SBA lenders
- Prepare your documentation. If you are unsure if your business will qualify for an SBA loan, it’s best to reach out to a trusted lending partner to discuss your options and potential eligibility.
The SBA’s requirements include:
- Good to excellent personal credit
- For-profit business
- No previous delinquencies on government loans
- Must be in business for at least 3 years
- Must be considered a ‘Small Business’ from the SBA
SBA 7(a) may be available if your business does not meet the minimum time in business or credit score requirements. To learn more complete our 15-second online application today.
What Is a SBA 7A Loan?
A SBA 7(a) loan is the primary product from the SBA. It isn't a loan directly from the SBA, rather, the SBA helps small business owners secure loans by guaranteeing a portion of the amount borrowed, capping interest rates, and limiting fees. Generally qualified business owners can use a 7(a) for any business purpose.
What Is an SBA 504 Loan?
SBA 504 loans are generally used for buying fixed assets like equipment or real estate, which ultimately acts as collateral for the loan itself. This program may require a down payment and are made available through Certified Development Companies (CDC’s) not lenders.
Accounts Receivable
What Does AR Stand For In AR Financing?
AR financing stands for Account Receivable Financing. It is a type of financing where a company will receive a loan based on a portion of their account receivables. Accounts receivable are assets equal to outstanding invoices billed to customers but have not yet been paid.
What Is Accounts Receivables Financing?
Accounts receivable financing is when a company will sell or finance off their outstanding invoices for working capital. It can either be in the form of selling the asset to the lender or using the accounts receivable (invoices) as collateral for the loan.
How Does Accounts Receivable Financing Work?
Accounts receivable financing uses your outstanding invoices as a form of collateral to help you obtain financing or an advance for your business. But unlike factoring, you do not sell your invoices to a third party. You will continue to remain responsible for collecting on your outstanding invoices while making payments towards your loan.
Merchant Cash Advance
What is a Merchant Cash Advance (MCA)?
A Merchant Cash Advance isn’t technically a loan, but rather a cash advance that is paid back by withdrawing a percentage of your credit sales, typically on a daily basis. Since a merchant cash advance is based on a certain percentage of the daily balance, the more credit card sales a business does the faster they are able to repay the advance. On the other hand, during times of slow business, the payback would be reflective of the incoming cash flow.
How Does a Merchant Cash Advance Work?
A merchant cash advance lender will provide you a lump sum of money in exchange for a percentage of your future credit card sales. Instead of making a fixed payment over a period of time your loan is paid back usually daily or weekly by the lender collecting that set percentage of your credit card sales.
Are Merchant Cash Advance's The Same As a Loan?
A merchant cash advance isn’t technically a loan with set terms. It is an advance on future sales and is paid back by taking an agreed upon percentage on a daily or weekly basis. The benefits of a merchant cash advance are you can pay back the loan as quickly or as slowly as your business sales allow.
Asset Based Loans
What Is An Asset Based Loan?
An asset based loan is a loan that is secured by owned collateral. Typically, they may be secured by real estate, accounts receive, equipment or other property that may be owned by the business owner. This secures the loan for the lender, in cases where the borrower defaults on the loan, the lender has the right to obtain the asset.
Can You Get a Business Loan Without Collateral?
Yes, there are many options available for business owners to get a business loan without collateral.
Types of financing you may be able to get without having to provide collateral include:
- Term loans
- Lines of credit
- Merchant Cash Advance
- Equipment Financing
How To Get an Asset Based Loan?
Business owners can get an asset based loan by researching lenders that off the product. Generally, an asset based loan is offered to small businesses that have assets available that can be used as collateral in order to receive financing. The asset may not be offered as collateral to another lender for any additional financing.
Franchise Financing
How To Finance a Franchise Business
When you’re looking to finance a franchise business you may want to reach out to your franchisor to see if they have any available options to help with your financing needs. Regardless, you may still want to shop around because you may be able to find cheaper options on your own.
Alternative lenders generally have financing options for franchises that may assist with your franchisor mandated updates, at a lower cost. Once you have determined the type of financing you’re looking for and the lender you would like to work with, you will have to complete an application, and provide necessary paperwork such as bank statements, personal credit reports, drivers licences and voided check.
What Sources of Financing Are Available To a Franchise?
When it comes to sources for financing a franchise there are many options available. Options include:
- Franchisor financing
- Traditional bank loans
- SBA Loans
- Alternative lenders
- Family and friends
It’s best to consider all your options when looking to finance your franchise to see what products fit your business needs best.
What Are The Requirements For Franchise Financing?
In order to qualify for franchise financing you’ll have to have a solid credit score, business financials and a minimum of two years in business. For those looking to financing an additional franchise, business owners may be able to leverage their existing franchise to meet those requirements for their expansion.
Credit Card Processing
What is credit card processing?
Credit Card Processing offers the ability to accept all major credit cards and credit debit and other payment cards for your products or services. A full suite of credit and debit card payment systems, products and services are available to help merchants increase revenue, enhance their bottom lines and be competitive in the marketplace.
Credit Card Processing can be used for in-person terminals, mobile and wireless options, online options, and MOTO (mail order/telephone).
How much are credit card processing fees?
Whether you're accepting credit cards on an in-person terminal, online, or other methods, each transaction is charged a small processing fee. Credit card processing fees can vary depending on many different factors. Apply today for a free analysis that can determine your expected processing fee. The greater the sales volume you can estimate, the more leverage you have to negotiate lower processing fees.
How are credit card payments processed online?
Whether you operate out of a storefront or online, a Transaction Express electronic payment gateway, as well as others, can handle your processing needs. Electronic payment gateways can process swiped retail transactions of all major credit cards through its virtual terminal or through a custom integration using web services. Its IP-enabled point-of-sale system offers an end-to-end solution that’s efficient and reliable.
The benefits of electronic payment gateways include shorter lines and faster checkouts that are sure to keep your customers satisfied and, for merchants, a reduction in operating costs by eliminating multiple dedicated phone lines and consolidating service costs for broadband.
What do I need to process credit cards?
To accept and process credit cards, a Point-of-Sale system is required. If you don't have a POS System, we can offer this to you to purchase.
Point-of-sale terminals are the backbone of face-to-face (card present) credit card processing in the retail environment. A variety of state-of-the-art, PCI-compliant terminals are available to merchants.
Everything needed to process a credit card or signature debit card transaction can be found in a countertop point-of-sale terminal, including a magnetic card reader, phone or Internet connection to the processor and a receipt printer. With the addition of a keypad, you’re ready to process PIN debit cards as well.
Startup Business Funding
Can I Get a Startup Business Loan To Fund New Business?
Yes. There are financing options available for businesses, regardless of how long you’ve been in business, your revenue, or credit score. However, your options will be limited if you’ve been in business for less than 6 months or have less than $15,000 in monthly gross revenue. Getting a loan for your startup through a bank is unheard of due to strict lending guidelines that require an established record of business and proof of income. Applying with ROK Financial provides you access to a dedicated Business Financing Advisor at no-cost to discuss how to get a startup business loan and review other potential business financing options.
Getting the capital you need to fund your business can be essential for most startups. You may be facing inventory, equipment, or other challenges that require an unexpected cost. ROK Financial is here to provide all business owners with the best financing options available with flexible payment options, terms, and high approval amounts. To learn more complete our 15-second application.
Where Can I Get a Startup Business Loan?
Obtaining business financing for your business may be difficult if you’ve been in business for less than 6 months. This immediately classifies your business to be considered a “startup”. With bank lending guidelines getting more stern, typical financing institutions may not be able to provide business financing for startups. However, you can qualify for business financing regardless of how long you’ve been in business or your gross revenue through an alternative financing company.
ROK Financial is a leader in alternative financing that can provide your business with the best loan options for startups. After a simple online application, you’ll be paired with a Business Financing Advisor that can help you get in order what’s needed to review financing options and terms.
What Are The Requirements For a Startup Business Loan?
If you have been in business for less than 6 months, you are considered a startup. Most financing options require a minimum of 6 months in business and at least $15,000 gross revenue per month. However, startups can be exempt of these requirements. The only requirement would be a credit score of at least 650+.
Every financing solution is unique, which is why ROK Financial provides a no-cost Business Financing Advisor to discuss your financing options and choose what makes the most sense for your business. To learn more, complete our 15-second online application.
Can You Get a Startup Business Loan With Bad Credit?
Yes, you can qualify for a startup business loan with bad credit. As long as your credit score is 620 or above, we can provide you with business loan options. Additionally, there are no requirements for time in business or gross revenue. However, your options may be limited.
Most financing options require 6+ months in business, or $15,000 in gross revenue per month. If you meet these standards, be sure to let your Business Financing Advisor at ROK Financial know. You may no-longer be considered a startup to some lenders, and get even better terms with flexible repayment options.
How To Apply For a Startup Business Loan?
To get started, apply at the top of this page, or visit our simple 15-second online application. After your application is submitted, you will be paired with a dedicated Business Financing Advisor to discuss your cash-flow challenges and financing requirements. You can start getting financing options presented to you within hours, with flexible terms and high offers.
If you’ve been in business for less than 6 months, you are considered a startup. Banking institutions have even stricter requirements in terms of your time in business. That’s why applying with an alternative financing company, like ROK Financial, may be your best option to get the funding you need, as fast as possible.
Does The SBA Offer Startup Business Loans?
Yes, the Small Business Administration has financing options for business startups. The SBA offers various startup loan options, such as a Micro Loan, 7(a) or 504/CDC Loans, or you may qualify for one of their investment programs. However, you may find challenges to get approved and the time to get funding may not be sufficient.
To go through a fast and simple process for business financing, complete our 15-second online application. You can then speak with one of our Business Financing Advisors to determine if an SBA Loan will be the best option for you, or if there are other financing options available.
PLEASE NOTE
FinancingXpress is not a licensed insurance agency, financial brokerage or financial advisor. We do not provide specific financial or insurance advise. The advice on this website should be discussed with your insurance agency, financial advisor or trusted Agent.