We wanted to know some of the most common questions small business owners have when it comes to business financing. So we sat down with Fast Capital 360’s Senior Business Advisor Jeff Lesko for some insight.
1. What Loan Programs Do You Offer?
We’re able to offer approvals for everything across the board depending on what makes the most sense for your business. These can include short-term loans, merchant cash advances, business term loans, business lines of credit or SBA loans.
2. What Are Your Rates?
Rates can start as low as 6% and go up from there based on the health and qualifications of the business. In some cases, rates can even be as low as 3%-4% with a business line of credit if borrowed funds are paid off in the first few weeks.
3. Why Do You Need Bank Statements?
A business’s revenue and cash flow are significant factors lenders consider when approving financing. That’s why any applicant interested in receiving funding offers must submit 4 recent bank statements (or securely link the business’s bank account to their application).
Keep in mind sharing your bank statements doesn’t give us access to your account, so there are no privacy or security concerns to worry about. We don’t sell your information either. (Think about it: We wouldn’t be in business if we misused our customers’ banking information.) Additionally, all of the lenders we partner with are reputable and reliable funding sources.
Have steady cash flow? Apply for a business loan.
4. Why Do You Need My Social Security Number or Tax ID?
We need this information to run a credit check and assess an applicant’s credit score for loan approval. Having said that, if you’re shopping around, just want to see what you’d prequalify for and don’t want your credit pulled, just let us know. We’ll make sure to avoid any offers that would require a hard credit inquiry.
Ultimately, though, if you prequalify for financing and want to proceed with a loan offer, the lender will most likely need to conduct a hard credit inquiry to process the approval. Any funding disbursements will require your Social Security Number or Tax ID for this purpose.
5. I’m Not in a Hurry. Why Should I Accept a Loan Offer Now?
Once you’ve been prequalified for a loan offer, that approval is time-bound and may not be available in the future. By waiting, even just a few weeks, your offer could quickly be null and void, or the terms of the offer could change. For instance, if you were offered financing with weekly payments now, the lender may require daily payments in the future, or interest rates could increase.
What’s more, as time goes on, you’ll need to submit new bank statements to reapply. The lender will re-review your cash flow and revenue and go through your application again. At this point, you may no longer have time on your side.
6. Can I Get Approved for $__ Amount of Funding?
We’ll always ensure applicants are offered the maximum amount of funding available. However, the approval amount is based on what a company can afford. Though an applicant may want more, our lenders will not extend credit that could put the financial wellbeing of a business in jeopardy.
That said, as a general rule of thumb, you can typically expect a funding offer that’s 50%-100% of your business’s average monthly revenue. For example, if you average $10,000 a month in revenue, you could anticipate a financing offer of $5,000-$10,000. Similarly, if you generate $100,000 a month, you could be approved for $50,000-$100,000.
7. What If I Need More Money?
It’s not uncommon to receive a funding offer that’s less than you anticipated, particularly if it’s the first time you’re working with a lender. After all, their underwriting can only base approval on what they have on paper.
Once you establish a relationship with the lender and prove your reliability to them, they’re more likely to work with you in the future. In fact, after you’ve paid down 50% of your loan, most lenders are open to renewing your financing. This means you could qualify for better terms and more funding.
There may be exceptions to the 50% rule in some cases, so be sure to reach out to your Business Advisor if your needs change unexpectedly.
8. Why Are Payments Due Weekly (or Daily)?
Our short-term financing offers are designed to keep your business running smoothly. Lenders want to make sure they don’t stress your business (or cash flow), so they often ask for more frequent payments but smaller installments, which are typically paid off in months instead of years. At the end of the day, they want to make sure you can make your payments, and you aren’t on the hook paying for short-term operating expenses or equipment purchases over the long term.
9. I Was Expecting Loan Costs to Be Lower. Why Aren’t They?
We understand that some financing offers are costlier than others. Typically, loan costs are higher than expected because of a business’s recent financial history. Contributing factors include credit score, bank account negative days and outstanding loans.
Even so, it’s important to keep in mind the return on investment a business loan can provide. Specifically, consider what you’d use the funding for and how the profit you’d gain from the use of the loan proceeds could make the cost of the loan worthwhile.
10. I Already Have an Offer. How Do You Compare?
We want to make sure to give you the best approval for your business that we can. In an effort to be your trusted, go-to funding source, please let us know if you’ve received a competing offer. We’ll do our best to try to beat any other offer you’ve received.
11. Are You a Broker or a Lender?
We have established relationships with various lending partners to cater to business owners throughout the U.S. There are no additional fees or costs to work with us, and you’re under no obligation to accept a loan offer.