This might be a little basic for some of our readers but it’s a great article to understand the basics of what you will typically need to get organized and think about when you want to apply for a business loan. Here are some basic points of data that a lender will look at and also a quick note about how we handle it here at Payplant.
Many lenders will be able to turn around a small loan or other structure quickly based solely on the credit score of business owner. These loans typically carry small dollar amounts and higher interest rates but they can be great for companies in need of a quick infusion of a small amount of cash. Payplant does not offer this type of loan as we take a holistic view of your company and underwrite the business and it’s ability to earn the money necessary to successfully grow and pay back any monies owed.
Funding debt to a company with little or no history of a product/service and revenue is not the business of most alternative lenders. Capital for a startup can come in many forms but not typically from an online lender. If you are a new company, make sure you have your story together, great projections and a solid plan. Payplant does work with new companies that have purchase orders or invoices.
For a company to be credit worthy with an alternate lender, they do not need to make a profit but they do need to have enough income to cover their debt payments. Be prepared to budget and to show how you will pay back any funds that you borrow. Payplant prefers no other debt but we can work with other lenders and find a way to make it work for your company.
This is again really important stuff, especially for a seasonal or newer business without a lot of history. You need to be able to prove that your debt payments will be made on time and without impacting your business’ ability to continue to function and grow.
Many lenders have preferred industries and then also industries that they simply will not work with. Some of the more difficult verticals to find a funding partner in are transportation and construction. There are specialized lenders for these industries but they tend to be more expensive. Payplant will look at any company in any industry.
It’s important to understand what type of lender you are dealing with when talking about collateral. Is it a quick loan with no liens and no collateral other than a PG? Or, like Payplant, will they give you the best rate for your business based on underwriting your whole company, finding assets that can be leveraged and borrowed against like POs, Invoices, Inventory, future revenue/invoices, equipment etc? Different types of lenders have their pros and cons based on what type of collateral they are looking for.
About Payplant
Payplant provides growth financing for entrepreneurs, by entrepreneurs. Its Pay Me NowTM digital invoice-financing service provides cash to businesses when their customers pay too slowly. Payplant helps businesses with PO and Invoice Financing, Asset Based Lending, Term Loans and Customer Financing products. Payplant works with companies that don’t currently qualify for traditional bank financing, have grown too quickly for their current lender or are at the point in their evolution where an influx of working capital can elevate their business to achieve rapid growth. Payplant delivers fast and reliable funding, at very attractive rates and is completely on demand. For more information, visit www.payplant.com.
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