business financing Archives - Excel Capital Management

Hard Money Business Loans and How One Can Benefit Your Business

May 24, 2017 by Excel Capital

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

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

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

What is A Hard Money Business Loan?

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

What Can a Hard Money Business Loan Be Used For?

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

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

What Types of Assets Can Be Put Up as Collateral?

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

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

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

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

Applying for a Hard Money Business Loan

You may hear the phrase, “do the due diligence” a lot when researching business loans. In simpler terms, this means doing the necessary research before applying and accepting an offer with a lender. There are thousands of lenders and brokers out there – who can off your a great Hard Money Business Loan. Don’t take everything at face value. Learn as much as you can about each lender you are interested in, compare pricing, read reviews, ask questions, and follow your gut if something just doesn’t seem right. You have the right to protect yourself and your business. The last thing you want to do is put your business in more of a financial bind or have setbacks. Research and knowledge is key. Do your due diligence, and you will be ready to move onto the next step.

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

Typically, most lenders that offer Hard Money Business Loans only require minimal paperwork in order to present your business with an initial approval. As mentioned, your business’ bank account can even be funded in as little as three business days! Here is a list of items to have ready when applying.

Completed application provided by your chosen lender
Four months of recent business bank statements
Four months of recent credit card processing statements (if your business accepts credit cards)
Clear copies of identification for all business owners
Voided check for the business bank account that is to be funded

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

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

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

February 10, 2020March 8, 2017 by Excel Capital

The 4 Cs of Getting a Business Loan | Excel Capital Management

You’re probably already aware that your credit score plays an important role in determining your eligibility to obtain a business loan or line of credit and that’s why it’s more important than ever to know what the 4 C’s of credit are.

However, what most don’t know about the 4 c’s of credit is what specific factors lenders look for within that overarching category.

When determining your eligibility for a loan, lenders look for what are called the ‘4 C’s of credit’ and, in fact, they stretch beyond just your credit score.

The number and type of factors vary somewhat depending on the lender, however, the four C’s of credit were created to help simplify and clarify the loan process for small business owners looking to obtain a loan.

It can be looked at like a guiding light to help understand what lenders and other funding companies look for when evaluating a business for credit

What are the 4 C’s of Credit?

The 4 C’s of credit are as follows –

Collateral

Typically appearing in the form of property or other physical assets, collateral is any asset a borrower can offer to secure a loan.

If the borrower defaults on the loan, the assets they used as collateral can be seized. Many small business owners are wary of secured business loans because of this reason as they require hard collateral that is tied to your personal assets. Many business owners are and have the right to worry about crossing the line between business and personal. Making a business mistake shouldn’t have to affect your personal assets.

Fortunately, unsecured business loans often don’t require collateral, and if they do, it’s a form of ‘limited’ collateral such as a portion of business sales which isn’t required to be paid back if you go out of business, meaning the risks are much lower.

Capital

Capital refers to any business asset that can be sold to make loan payments. This includes available money and cash savings, investments, properties with equity, and other assets that you could sell or use to quickly obtain cash.

If business drops off and you’re unable to pay your loan payments for a time, lenders want to see that you have liquidity to cash out on so you can continue to make payments on time.

Capacity

Capacity refers to your business’ ability to make the revenue needed to pay back a loan.

Lenders don’t just want to see that you have assets you can use to pay off a loan (or which they can secure to do so), they want to see a history of being able to make regular payments regardless of those assets.

Character

The final ‘C’ in the 4 C’s of credit, lenders determine character by reviewing the borrower’s personal credit history and calculating several factors together.

Factors taken into account include:

Your total amount of debt
Delinquent accounts
Available credit
And whether you make payments on time

If you’re in need of a small business loan but don’t believe you can satisfy all four C’s of credit, don’t worry, there are several other options available. Now that you know what the four C’s of credit are you can easily understand how to prepare yourself and your business when you try to pursue a lender for any sorts of funds.

At Excel Capital, we provide a variety of financial solutions which we can offer even if you have bad credit.

Click here to complete our short application to get in touch with one of our financial specialists to see how we can help.

Exclusive Interview with ERPS Group CEO/Chief Financial Consultant, Ella Rivkin

February 19, 2020June 9, 2016 by Excel Capital

New York City based, full-service accounting firm, ERPS‘ goal is to help individuals, professionals, and businesses maintain financial stability as they grow their assets and plan for the future. ERPS provides assistance in estate aligning, retirement and trust planning, wealth management, and money-saving services for individuals. For businesses, the company assists with taxes, payroll, insurance, HR, benefits, and more. Today, we have the pleasure of interviewing ERPS Co-Founder, CFO, and CEO, Ella Rivkin to get her insight on tax preparation and filing tips for small business owners.

Excel Capital Management: Hello, Ella. Thank you for taking the time to be interviewed by Excel! To get started, tell us a little about yourself, how you got into the accounting industry, and your company, ERPS.

Ella Rivkin: I came to this country at a young age, chasing a dream just like many before me. I found myself very proficient in helping others and while growing up, and I knew that finance was a field that would strongly interest me. I began looking for work in the financial field while in school in order to gain experience. Eventually, I found myself working in an accounting office where I began to learn the necessary skills I bear today. After many years, I was finally presented the opportunity to open up my very own office, E.R.P.S. Inc. where I could finally utilize all my years of experience to help others chasing their business goals.

ECM: How can small business owners use your services at ERPS for their business finances?

E.R.: What makes E.R.P.S. stand out from others is that we develop strong business relationships with small business owners in order to establish successful networks and a beneficial support system for the owners. We are there to address any concerns the owners might have regarding their day-to-day operations and it is with this help that we are able to attract new clients that add to our growing community.

ECM: It is important for business owners to have a strong working relationship with their accountant. What are topics business owners should constantly discuss with their accountant, and how often should meetings be set up?

E.R.: After many years, I have advised many owners on how to better their business and succeed. It is important to address key topics that many fail to see. Some of these topics include careful handling of all business expenses so as to keep everything organized and manageable. Another important topic is keeping track of all employees and payroll information so as to not have any confusion within the organization. A well-organized account of everything going in and out of the company, whether it be assets, credits, etc. is key to maintaining the necessary structure of any business which hopes to prosper.

ECM: As you know, Excel Capital Management provides alternative financing solutions to small to mid-sized businesses. For a business owner that is in the market for a business loan, what advice would you give them before applying?

E.R.: Prior to applying for a loan of any kind, it is important to insure that everything in your company is up to date, financially, and that the business is ready to accept the responsibilities of said loan. I have seen many companies accept loans as a means of growing their business, whether big or small. A loan provides much needed support for a business, especially one that is looking to expand. By accepting a loan, it is important to monitor and stay on top of all its financial aspects, primarily due to the fact that if one loan is handled correctly, it allows for that business to receive additional, larger loans in the future which in turn helps the business even more.

ECM: Many businesses Excel funds continue to apply for additional working capital over the business’ lifetime. Based on your expertise, what determines when business owners should reach out for working capital via an alternative lender such as Excel Capital Management?

E.R.: A company is only as successful if it keeps constantly looking for bigger and better things to make it stand out. Unfortunately, not every business owner is capable of financially providing the necessary funding for these ventures. There comes a point where the owner(s) exhausts every resource and their disposal and has no other place to turn to. In this situation, it is necessary to reevaluate the company and its potential success. If the company is in fact making progress towards its goals, then it is understandable to reach out to lenders and request additional funding. Reaching out to lenders like Excel makes it possible to continue expanding one’s business by attaining the much needed capital that allows for new equipment, new ideas, etc. necessary for corporate growth. There is a common saying, “You have to spend money to make money”—this couldn’t be more true!

ECM: Lastly, what is the most important accounting advice you would give to small business owners?

E.R.: It must be said that for any business to succeed in today’s day and age, it is necessary to have desire and determination as the driving factors. As an accountant, I must say that proper discipline and motivation is required when managing any business. There are always going to be obstacles along the way that make it seem impossible to overcome, but with proper leadership and organization, no obstacle will be too great. It is also important to maintain proper communication between the business owner and the accountant, because one cannot do their job without the other. Keeping your accountant up to date on all of your business ventures and operations is key, therefore the accountant must be provided with any and all necessary information about the business at all times.

For more on ERPS Group, visit: erpsgroup.com and be sure to “like” their official Facebook page: facebook.com/erpsinc.

3 Reasons Why Applications For Business Loan Get Declined

November 16, 2018May 19, 2016 by Excel Capital

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

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

Why Traditional Lenders Decline Business Loan Applications:

Low Cash Flow: If a traditional lender decides to give your business a loan, they will want to see the ability to make payments back on the loan amount in addition to covering all other business expenses. Unfortunately, tough times do occur where businesses don’t generate enough revenue at certain times of the year – maybe they are a seasonal business. Some business owners, such as contractors, aren’t paid until jobs are completed or they must pay inventory suppliers upfront before they get paid. Tight margins typically do not sit well with traditional lenders and you could get your business loan declined.

Poor Credit, Bad Credit, or No Credit: Like NorthShore Advisory Inc. Credit Expert Tracy Becker told us in our exclusive interview, “in today’s fast-paced business world, more partners, lenders, and potential accounts need to make quick decisions as to which suppliers, borrowers, and partners they want to work with; decision-makers use a variety of business credit scores, indexes, and reports to discard unqualified candidates from being considered for a partnership or a loan.” A business’ credit score is a major factor when a traditional lender considers approving them for financing. Poor credit, bad credit, or simply no credit can almost always guarantee a decline. To learn more about how businesses can improve their credit score, visit: http://www.northshoreadvisory.com/

No Collateral: Traditional banks and lenders almost always require some sort of collateral to secure a loan. Collateral can come in the form of a vehicle, personal or business property, equipment, and/or other assets. If a business owner defaults on the loan, this collateral will then be seized for nonpayment. Unfortunately, many business owners (especially young business owners or startups) do not have collateral to put up when it comes to acquiring a loan, or the lender may not deem anything the business owner has as anything of value.

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

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

Merchant Cash Advance: Short-term financing transactions that are collected through a set percentage of your visa and MasterCard sales that are accepted at your place of business. Probably the most common term used in the industry. These do not have a set repayment schedule and are based on the volume of your business’s credit card processing sales. These are usually only guaranteed by the future sales of your business.

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

ACH Loan Products: These are a bit different than cash advances as they are considered loans and may have personal guarantees. They have a fixed repayment schedule that is paid either daily, weekly or monthly. These products are catered to industries that do not accept credit cards and need a fixed payment.

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

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

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

Business Lines of Credit: A rotating loan that gives business owners access to a fixed amount of money, which they can use day-to-day according to their need for cash. Interest is only paid on the amount of the advance actually used.

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

Asset Based Loans: A business loan secured by collateral.

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

Term Loans: A loan that is backed by a bank for an exact amount that has a specified repayment timetable and interest rate that are adjusted accordingly. Terms mature between 1 and 10 years.

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

Funding: Venture Capital vs. Working Capital

February 19, 2020April 7, 2016 by Excel Capital

Most business owners will apply for some sort of capital at least once over the business’ lifetime. This capital can be used for various reasons at various stages of the business life cycle: business start-up, expansion, equipment, purchases, hiring, etc.. When it comes to the growth of any business, money is essential. What the capital is being used for determines just what type of capital it is – venture or working – and how one goes about acquiring it. No matter what though, as a business owner it is important to do your homework and know what type of funding you are applying for and how it can affect your bottom line in the long run. Let’s take a look at the difference between venture and working capital funding and the funding process for each.

VENTURE CAPITAL FUNDING

Venture Capital is normally sought after by up and coming business owners that are early in the life cycle of their endeavors – startups and seed stage – but can also be used by business owners who are later in the business cycle but are looking to fund new ideas. If these types of business owners can’t get the money from a friend or family member who believes in their idea (business means big bucks, and a lot of times close acquaintances just can’t help out) they are usually able to do so through a Venture Capital investor who strongly backs their business plan. What complicates this process is the fact that most investors will want to see revenue generated for the long-term. They are now part owner and in it for the long haul just like the main business owner themselves, generally looking for a return of at least 5x their initial investment amount.

Venture Capital investors or companies will analyze to see if there is a market for a business owner’s idea. If they feel that your business won’t be success, they most likely won’t take the risk of investing any money into it at all. Their goal is to see a big profit and have a hand in many major business decisions. It’s usually not simply a labor of love. Expect for investors to ask for a C-Level title and/or seat on your board of directors if you have one. At the very least, they will usually ask to be an “owner.” This results in relinquishing full control, ownership and an agreed upon percentage of future earning until you have enough capital to buy them out.

When it comes to qualifications, Venture Capital investors or companies typically only fund businesses in the amount of $1M or more, and also only fund specific industries which puts limitations on many business owners. They tend to look for big industry-specific companies with big, commercial ideas, a strong team, and some existing momentum and paying customers. This can be great, however, if you are just starting out, run a company on your own, or don’t necessarily have the plan to back up such a large sum of money, this can prove to be extremely overwhelming. Garage Technology Ventures, an early-stage venture capital funding company highlights the specifics of these qualifications in their article Critical Factors for Obtaining Venture Funding. Aside from all of this, finding a reputable investor in itself can be a tough task. You should always do extensive research to ensure the investor has you and your business’ best interests at heart. Vivek Wadhwa’s article, Venture Capital: The Good, The Bad, and Ugly on Bloomberg.com highlights some other important factors when it comes to considering Venture Capital. Check it out.

WORKING CAPITAL FUNDING

Working capital is sought after by business owners for any number of reasons during any stage of the business’ lifetime – including the startup stage (normally lenders require a business must be operating for at least 3 months, but this can still be considered the startup stage). The capital is usually used for equipment purchases, new hires, expansion, inventory, and more. While lenders generally do care about the product or service the business offers, what business owners do with the capital (within reason) is their business. They are no way, shape or form now an owner after funding a company and don’t require that you list them as an owner, sponsor, or member of your board of directors. You make all of the business decision and once the funding is paid back their is no further obligations.

Typically, to qualify for working capital funding by a lender, a business owner must provide 4 months of recent bank and credit card statements (if applicable) to show their ability to pay back the advanced money. This capital acquired is generally structured as either a loan with fixed payback terms and fees or a purchase of future receivables at a discount rather than an investment expected to generate 5x the initial amount. Most business owners sleep a little better knowing this much and even reach out for additional capital numerous times over the course of their business’ lifetime. Lenders tend to develop genuine and trusting working relationships with many business owners and offer various financing solutions to work harmoniously with a business.

At Excel Capital Management, we offer many different financing products to help you obtain the Working Capital your business needs to grow! Our funding specialists will work diligently to ensure that you receive the best products available to achieve business success!
APPLY NOW!