heavy-machinery-in-quarry

What to Consider When Leasing Heavy Equipment

Purchasing new equipment can be a big investment, no matter the business size.
Fortunately, there are options to consider when you’re in need of a new machine. The best way to move forward is to take time examining your financial options—it will benefit your bank account in the short and long term.

Renting, Financing & Leasing

The most common means of acquiring equipment, such as excavators and wheel loaders, are renting, financing or leasing. Each has its pros and cons. First consider the benefits of renting equipment. Renting a machine is relatively self-explanatory. If you need a piece of equipment but do not want to own it, then renting works well. It allows you to access equipment so you can use it with no commitment to keep it. You can try out a machine to see if you like it.

There are some downsides to renting, though. First, you aren’t investing in the equipment. Your machine rental payments will not increase your capital in the long run. Just as well in renting, you may pay a higher rate per hour than you would if you bought the machine. The money you spent on renting doesn’t build equity.

It doesn’t normally go toward the ownership of the machine. That means you may still need to invest in another piece of equipment in the future, depending on your circumstances. An exception is the rental-purchase option, in which you can typically apply a portion of rental payments toward the eventual purchase of a machine.

Financing equipment can also be a good option, especially with low interest rates. It works well for contractors who may not have the money to purchase equipment right away, but still want to buy a machine. As you likely already know, financing is borrowing the funds to buy the machine and then paying back the money in installments. In this case, the machine acts as your collateral.

The benefit to financing is investing in equipment that you own, and it gives you time to pay for it in small doses over time. The downside is taking on debt until you pay it off. Plus, it’s important to note that you will also pay interest.

The third equipment acquisition option is leasing. In this situation, you lease and use equipment from your dealership for a defined period of time. The terms are typically written in 12-month increments with preset hour limits.

On the surface, leasing may seem like renting, but it can provide more benefits. With leasing, you get access to new equipment, often pay a lower monthly price and have options for your financial commitment level. When you lease, the equipment dealer
provides you with a machine in exchange for monthly payments. Again, this is like renting, but with the possibility of additional investment.
If you choose to lease a machine and end up wanting to buy it, you will know what the predetermined price will be at the end of the lease term. On the other hand, if you decide not to buy the machine, there is no commitment at the end of the lease.

Reasons to Lease Heavy Equipment

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A contractor who can speak to the benefits of leasing is Western Earthworks owner Jack Henderson-Adams. His Massachusetts company leases its heavy construction equipment.

“Not everybody has 30% to throw down on a down payment on a $250,000 machine,” said Henderson-Adams. “For me, that doesn’t make sense. I run a small company and a big down payment really throws off our cash flow, which at times can be a challenge. For us, we’re looking at a $1,700 monthly lease payment or a $3,000 monthly payment for 60 months in buying it.”

Not only can leasing allow you some financial freedom, but it helps guarantee some quality assurance. Where a used machine may not come with a history, a piece of leased equipment has a known service history, so you know more about what you’re getting.

“There’s a lot of used equipment out there,” said Henderson-Adams. “I could go buy an excavator for $50,000, but I don’t know where that’s been. That’s a huge gamble. While I might save a lot of money and then own that machine outright, I could go out on my first job and I could have a $15,000 breakdown. That’s going to put me out.”

According to Henderson-Adams, “If I want that machine, and I’m going to lease it, I know where it’s been. I know how I took care of it. I know every little nook and cranny, scratch, ding and dent, and I own that. It’s mine. There are no surprises. It makes me feel safe.”

Consider This

So, what should you consider before leasing your next piece of heavy construction equipment? Up first is the timing. What projects have you earned for the 2021 construction season?

Have you evaluated your equipment needs? Does your local dealer have enough rental equipment? If not, you may want to lease a new machine and ensure it’s available when you need it.

Consider what makes the most financial sense for you. Keep in mind, if you need a machine for just one job, renting may be your best choice. If you know outright that you want to purchase a machine for the long haul, traditional financing may be your best bet.

Because of Section 179, you can benefit from leasing and take advantage of the tax benefits, similar to purchasing equipment. While the year has just begun, it is always beneficial to understand tax and deduction limits to plan ahead.

Contact us for more info on How to Lease Heavy Equipment now.

7-Reasons-to-Finance-Equipment-for-your-Business

7 Reasons to Finance Equipment for your Business

The majority (78%) of U.S. businesses of all sizes – from small entrepreneurs to Fortune 100 companies – in all industries – from construction to healthcare – lease or finance their equipment.

Here are some reasons why top companies finance their equipment:

    • Finance 100%: arrange 100% financing of your equipment, software, and service with 0% down payment. (OAC)
    • Keep up to date: Keep up to date with technology by acquiring more and better equipment that you could without financing.
    • Accelerate ROI: rather than paying one lump sum for your equipment, make smaller payments while the equipment generates revenue.
    • Benefit from bundling: bundle the equipment, installation, maintenance and more into a single, easy-to-manage solution.
    • Save cash: save your limited cash for areas of your business, such as expansion, improvements, marketing, or R&D.
    • Outsource asset management: Let your equipment financing company manage your equipment from delivery to disposal.
    • Customize your terms: Set customized payments to match your cash flow and even seasonal income fluctuations.

 

When looking at equipment finance companies, Premier Business Lending stands out from the rest. Our name is synonymous with equipment financing and leasing. Since opening our doors, we’ve helped countless business owners acquire equipment at a critical period of their growth. Premier Business Lending has a wide variety of loan programs which helps you the customer meet your goals and in addition to our wide variety of loan programs we offer you customer service that is second-to-none. You will work directly with a Premier Business Lending financing expert who will support you every step of the way via phone or email. Equipment finance has never been faster or easier.

 

entrepreneur startup business loans options

6 Startup Business Loan Options for Entrepreneurs

Entrepreneurs often have a hard time securing a startup business loan. A new business venture is just too risky for most traditional banks. But there are lenders willing to offer small-business loans to a fledgling startup, including alternative lenders and microlenders, as well as other funding options for scrappy entrepreneurs.

 

Keep in mind: If you’re just starting out, you’ll likely need to borrow money based on your personal finances. But few lenders offer startup business loans for bad-credit borrowers (a FICO score below 630). Be wary of any lender that offers startup loans with no credit check or guaranteed approval. It could be an expensive option — or a scam.

 

1. SBA loans, and microloans from nonprofits

The U.S. Small Business Administration’s microloan program offers loans of up to $50,000 for small businesses looking to start or expand. The average SBA microloan is about $13,000.

SBA microloans are administered by nonprofit community lenders and are typically easier to qualify for than larger-dollar loans. The downside: Funding may not be sufficient for all borrowers.

 

The SBA’s flagship 7(a) loan program also offers financing that borrowers can use to start businesses. But SBA 7(a) loans are tough to get. They typically go to established businesses that can provide collateral — a physical asset, such as real estate or equipment, that the lender can sell if you default. The qualifications are strict, and even if you qualify, applying for a small-business loan can take several months.

Microlenders and nonprofit lenders can be a less difficult route, especially if you have shaky finances

Generally, you’ll get solid loan terms from these lenders, making it possible for you to grow your business and establish better credit. That can help you qualify for other types of financing down the road.

 

2. Friends and family

Perhaps the most common way of financing a new small business is to borrow money from friends or family. Of course, if your credit is bad — and your family and friends know it — you’ll have to persuade them that you’ll be able to pay them back.

In these situations, the potential cost of failure isn’t just financial; it’s personal.

“Business is personal, regardless of what people say,” says Chris Wilcox CMO of Premier Business Lending, a small-business financing company. “For most people, it’d be difficult to separate the two.”

Trim your list of friends and family to those who understand your plans and do your best to make certain they’re comfortable with the risks involved.

 

3. Credit cards

Many entrepreneurs rely on business credit cards for startups as funding. You can use this option as short-term financing for business purchases you know you can pay off quickly.

Let the balance linger and interest charges will pile up, quickly turning your credit card into a very expensive small-business loan.

The annual percentage rates on your business credit card is based largely on your personal credit scores. If you have poor personal credit, you’ll have a higher interest rate.

It’s worth noting: Research shows that small businesses that rely heavily on credit card financing typically fail.

 

4. Personal business loans

New small-business owners can also access financing through personal loans, such as those offered by online lenders. Personal business loans can be a good option for borrowers with excellent personal credit and strong income.

But as with credit cards, personal loans can have high APRs (up to 36%), especially for bad-credit borrowers.

Wilcox says small-business owners should consider personal loans “an option of last resort.”

“Where they can work,” he says, “is when a business just needs a small amount of money for things like… early-stage production or buying equipment.”

 

5. Crowdfunding

Crowdfunding has become a popular way for small businesses to raise money, thanks to such sites as Kickstarter and Indiegogo, which let you solicit funds through online campaigns. Instead of paying back your donors, you give them gifts, which is why this system is also called rewards-based crowdfunding.

New avenues are also opening for equity crowdfunding, in which you tap a public pool of investors who agree to finance your small business in exchange for equity ownership. This became an even broader option recently with new securities regulations that allow small-business owners to reach out to mom-and-pop investors, not just accredited investors.

Crowdfunding is good for the entrepreneur “who has a product and wants to test the market and validate the opportunity,” Wilcox says. “No credit necessary.”

 

bank-loans-approval-increasing

Now That PPP Loans Have Ended, What’s Next?

Now That PPP Lending Has Ended, Biz2Credit Small Business Lending Index Finds May 2021 Loan Approval Rates Increase for Banks and Non-Bank Lenders

 

 

Small business loan approval percentages at big banks ($10 billion+ in assets) climbed slightly from 13.4% in April to 13.5% in May 2021, however, small banks’ approvals jumped higher from 18.2% in April, to 18.7% in May.

“Loan approvals by small banks rose 0.3% as banks start to assess the favorable economic conditions beginning to emerge as lockdowns ease and more and more people receive a COVID-19 vaccine,” said Biz2Credit CEO Rohit Arora, one of the nation’s leading experts in small business finance. “Pent-up demand from consumers is an attractive narrative for small business owners to use as part of their justification for applying for financing. Banks, especially smaller community and regional institutions, are taking notice of this trend as they begin to open up their lending operations to the post-pandemic reality.”

 

Next month’s lending figures will be significant now that the federal government’s Paycheck Protection Program (PPP) has completed its second round.

“Businesses that are still reeling from the economic impact of the pandemic will have to look for other sources of funding,” Arora explained. “Look for business loans — especially loans from online or digital providers — to see a jump in activity now that PPP is closed.”

 

Total nonfarm payroll employment rose by 559,000 in May, and the unemployment rate declined by 0.3 percentage point to 5.8 percent, the U.S. Bureau of Labor Statistics reported on Friday, June 4. Notable job gains occurred in leisure and hospitality, in public and private education, and in health care and social assistance. Many of these jobs are created by small businesses.

Credit unions edged up from a 20.3% approval rate in April, to 20.4% in May 2021. However, other non-bank lenders inched up slightly. Institutional lenders approved 23.6% of funding requests in May, up slightly from 23.5% in April.

Meanwhile alternative lenders approved 24.3% of funding applications in May 2021, up from 24.0% in April.

“Alternative lenders saw a significant increase in approval rates in May while at the same time handling an ever-larger number of loan requests, thanks to the shift towards online finance in the small business space,” Arora said. “With the conclusion of PPP, banks are focusing on forgiveness and may not be ready to ramp up small business lending that is not government-backed.”

“Borrowers will have to turn to non-bank sources of funding, including alternative lenders, institutional lenders and credit unions,” he added. “These lenders are all starting to respond to the demand, and many will see their approval rates rise as customers who used to get loans from a bank are now looking to alternative sources of financing.”

 

 

About Premier Business Lending

Founded in 2015, Premier Business Lending has arranged more than $3 billion in small business financing. The company is expanding its industry-leading expertise in funding medium to small business by opening additional loan offices across the country while hiring knowledgeable financial consultants. Visit www.premierbusinesslending.com or Facebook, and LinkedIn.

perfect-credit-for-business-loan

6 Small Business Loan Myths Busted

Obtaining a loan for your small business is a great way to boost investment and even grow your business when the time is ripe. You might have heard some grumblings about small business loans: they are hard to obtain; your credit has to be flawless; don’t ask for too much money or you’ll be denied. Fortunately, these prominent myths surrounding small business lending are not necessarily true.

It is important to manage debt properly but doing so can help grow your business at a faster rate than scrimping and saving. To help you obtain a small business loan for your company. Here are 6 Small Business Loan Myths Busted:

Myth No. 1: Getting a small business loan is the hardest thing you will ever have to do.

Like other forms of financing, obtaining a small business loan is all about preparation. Ensuring your books are transparent and you maintain the reserve liquidity to encourage the lender that you’ll be able to service your debt on time and consistently will lead to success. And experts agree the best way to avoid unnecessary snags is to prepare ahead of time for the application process.

“A lot of the frustration around obtaining small business financing can be eased by doing your due diligence,” said Michael Adam, founder and CEO of Bankmybiz, a site that connects business owners with business funders. “

Myth No. 2: You must have perfect credit to get a small business loan.

Low credit scores are a concern for some lenders, but banks aren’t the only lenders out there. Alternative and private lenders are often able to offer more flexible terms.

Alternative lending sites such as Premier Business Lending tend to base lending decisions on the financial realities of a business rather than the financial history of business owners. Specifically, Wilcox said, alternative lenders take a close look at business performance, industry type, time in business and cash flow before handing out a loan.

 

perfect-credit-for-business-loan

Myth No. 3: The best way to obtain a loan for your business is through a bank.

Entrepreneurs have more than one option for obtaining financing; banks are not the only game in town. There are alternative and private lenders, as well as creative types of lending like invoice factoring, which can help business owners shore up their capital without going through the lengthy and restrictive application process required by conventional lenders.

For business owners looking to borrow a relatively small sum (between $5,000 and $250,000), getting a bank loan is likely to be more trouble than it’s worth. Banks are more suitable for businesses that are interested in borrowing a large amount of cash and repaying the loan over a long period of time at a relatively low interest rate. 

Instead, Wilcox said, alternative lending sources often provide faster approvals for shorter loan repayment periods; sometimes, businesses can obtain access to the funds in as little as seven days, he said. Because the terms are more flexible, interest rates are often higher.

Myth No. 4: The worst way to obtain a loan for your business is through a bank.

Just because you can obtain financing elsewhere, doesn’t mean conventional lenders and bank loans are not for you. Sometimes, a bank offers exactly the funding option you need. In fact, for established businesses looking to grow at a moderate rate, traditional bank funding is generally a great option.

“If you are a younger company, pre-revenue or low revenue — but plan to grow very quickly due to the industry that you’re in (e.g., health care, IT or software consulting) — then a traditional bank loan may actually limit your growth,” Wilcox said.

To decide whether a bank loan is right for your business, research both traditional loans and alternative funding sources. It’s also important to know your business inside and out.

Myth No. 5: The more money you ask for, the less likely you are to be approved for a small business loan.

The requested principal amount of the loan should not have an adverse impact on whether you’re approved. Lending institutions are generally prepared to fulfill large financing requests for the right borrower; it’s more lucrative for them in the long run anyway. Don’t be afraid to ask for the amount of money that you really need!

Evan Singer, general manager at online Small Business Administration loan program SmartBiz Loans, said a business should apply for the amount it needs — no more and no less. He recommends considering both how much money you really need to grow your business, and how much money you can afford to pay back every month.

“Make sure that you have cash flow to make your loan payments,” Singer said. “That’s the biggest thing that a [lender] is going to check — that [the business owner] can actually afford to make their loan payments.”

Myth No. 6: The most important factor to look at is the interest rate.

It’s easy to hyper-focus on the interest rate of the loan. Essentially, the interest rate is telling us just how much this money is going to cost us by the end of our repayment period. It’s certainly a crucial piece of information, but it’s just one aspect of the entire deal.

Although interest rates are an important aspect to consider when choosing a lender, there are many other factors to keep in mind. Wilcox suggested asking what the terms of the loan are, how soon you need to repay the money, and what you can use the loan for.

 

PPP loan

2021 Updates to the PPP Program

As most businesses are aware, the rules governing PPP loans have been updated as part of The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (“Act”). The Act was just one section of the massive 2021 Consolidated Appropriations Act that was passed by Congress and signed into law by the President on December 27, 2020. To combat the ongoing disruptions caused by the COVID-19 pandemic, the Act generally provides (a) first time PPP loans for businesses that did not obtain a loan in the first instance, (b) PPP second draw loans for businesses that already obtained a loan but need additional funding, and (c) additional funding for businesses that returned their first PPP loan or did not get the full amount for which they qualified.

While further guidance from the Small Business Administration concerning the Act and implementation of second round PPP loans is expected, here are some of the more noteworthy updates and changes to the PPP loan program:

  1. Of the $325 billion appropriated under the Act, $284.45 billion has been allocated for PPP second draw loans.
  2. The PPP second draw loans are intended to target smaller and harder-hit businesses, and the rules for second draw loans are more restrictive to ensure the funds are provided to those businesses with the greatest need. In order to be eligible, the business must:
  • Employ no more than 300 employees;
  • Have used or will use the full amount of their first PPP loan prior to disbursement of the second draw loan; and
  • Be able to demonstrate at least a 25% reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same quarter in 2019.

For businesses that were not in operation in 2019, additional eligibility rules are provided under the Act.

  1. Loan eligibility expanded for certain nonprofit organizations that do not receive more than 15% of their revenue from lobbying.
  2. In general, borrowers may receive a loan amount of up to 2.5 times the average monthly payroll costs in either the one-year prior to the second draw loan or calendar year 2019. For restaurants, hotels, and other establishments providing customers with lodging and/or preparing meals, snacks, and beverages for immediate consumption (businesses with NAICS code beginning with 72), the loan amount is 3 times the average monthly payroll costs. Second draw PPP loans are capped at a maximum amount of $2 million.
  3. In addition to payroll costs, covered mortgage, rent, and utility payments, the Act makes the following additional expenses allowable uses and eligible for forgiveness:
  • Covered operations expenditures – payment for any software, cloud computing, and other human resources and accounting needs.
  • Covered property damage costs – costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance.
  • Covered supplier costs – expenditures to a supplier pursuant to a contract, purchase order, or order for goods in effect prior to taking out the loan that are essential to operations at the time at which the expenditure was made.
  • Covered worker protection expenditure – personal protective equipment and adaptive investments to help a loan recipient comply with federal health and safety guidelines or any equivalent State and local guidance related to COVID-19 during the period between March 1, 2020, and the end of the national emergency declaration.
  1. For forgiveness, the 60%/40% cost allocation between payroll and non-payroll will continue to apply. However, PPP borrowers may now include additional group insurance payments as part of their covered “payroll costs.” This includes insurance plans such as vision, dental, disability and life insurance.
  2. Allows the borrower to elect a “covered period” within which to spend the loan proceeds. The covered period may end at the point of the borrower’s choosing, which can be any length between 8 and 24 weeks after origination of the PPP loan. Recall that first draw PPP loan borrowers had little flexibility and were required to choose either an 8- or 24-week covered period.
  3. To apply for a second draw loan, the borrower must submit to its lender SBA Form 2483-SD (Paycheck Protection Program Second Draw Borrower Application Form) or the lender’s equivalent form. The documentation required to substantiate payroll cost calculations is generally the same as documentation required for first draw PPP Loans.
  • However, no additional payroll cost documentation will be required if the borrower uses 2019 payroll cost documentation consistent with what was presented for its first draw PPP loan, and obtains its second draw loan from the same lender.
  • For loan amounts greater than $150,000, the borrower will be required to document the 25% revenue reduction. Documentation may include relevant tax forms, including annual tax forms, or, if relevant tax forms are not available, quarterly financial statements or bank statements.
  1. The Act simplifies the forgiveness application process for borrowers who have received, or will receive, PPP loans in an amount of $150,000 or less. Here, full forgiveness is available if the borrower submits a certification in a 1-page form to be finalized by the SBA.

Premier Business Lending is working with the SBA in order to secure funding for business owners. Follow the link below and apply online. Once we receive your inquiry a finance consultant will reach out to you immediately to walk you through the next steps. https://www.premierbusinesslending.com/ppp-contact/

ppp-loan

Paycheck Protection Program (PPP) 

Paycheck Protection Program (PPP) 

Loan forgiveness information

 

Many businesses are relieved to have received PPP funds but are now concerned they may not  receive forgiveness. The two primary causes for concern are: 1) not using the loan proceeds  properly, and 2) not documenting the correct use of funds adequately. These are common  concerns, and we are here to help. Whereas we have received some guidance and information  from the SBA and US Treasury Department, we await finalized guidelines. While we wait for  the final rules, we wanted to help by sharing what we know now. 

Please keep in mind that the information contained in this article is based on our current  understanding. Even though we will be updating you with other PPP-related information as it  because available, we ask that you do not solely rely on this information to make your  financial decisions. It is best for you to engage legal counsel and advice from CPAs and other  financial professionals. 

How Does Forgiveness for PPP Loans Work? Below are the three primary source documents that summarize the entire program. 

  1. The CARES Act
  2. The SBA’s PPP Interim Final Rule
  3. Supplement to the Interim Final Rule for self-employed borrowers
  4. Apply Now

In summary, once your business is approved for the loan, the lender has 10 days to send you  the money. All loan proceeds spent in the first eight weeks from the date that the money was  distributed are eligible to be forgiven as long as they are used for approved expenses. To be  fully forgiven, a minimum of 75% of the loan amount must be spent on payroll, and a maximum  of 25% may be spent on utilities and business lease, rent, or mortgage payments. 

Sometime after the eight-week period has passed, the lender will allow the borrower to apply  for forgiveness. The lender will have up to 60 days to respond to the request for  forgiveness. Because all principal and interest payments are deferred for the borrowers for the  first six months, any unforgiven loan balances will be termed out for a period of 18 months at a  1% simple interest rate.

What Documentation Is Needed to Apply for  Forgiveness? 

We advise all businesses to carefully and transparently document their PPP loan uses—both for  use during the forgiveness application, but also for the future in case the government decides  to audit any past borrower. The SBA does not accept stories, explanations, or excuses—only  evidence. The CARES Act states that borrowers applying for forgiveness must submit  documentation verifying the number of FTE employees on payroll and pay rates for the periods,  including: 

  • Payroll tax filings reported to the Internal Revenue Service; and
  • State income, payroll, and unemployment insurance filings; 
  • Documentation, including canceled checks, payment receipts, transcripts of  accounts, or other documents verifying payments on covered mortgage obligations, payments on covered lease obligations, and covered utility payments.
  • A certification (stating) that— 
  1. The documentation presented is true and correct; and
  2. The amount for which forgiveness is requested was used to retain  

employees, make interest payments on a covered mortgage obligation,  

make payments on a covered rent obligation, or make covered utility  

payments. 

Forgiveness Includes Employment Taxes 

The SBA stated, “Under the [CARES] Act, payroll costs are calculated on a gross basis without  regard to (i.e., not including subtractions or additions based on) federal taxes imposed or  withheld, such as the employee’s and employer’s share of Federal Insurance Contributions Act  (FICA) and income taxes required to be withheld from employees. As a result, payroll costs are  not reduced by taxes imposed on an employee and required to be withheld by the employer,  but payroll costs do not include the employer’s share of payroll tax.”

For example, an employee who earned $4,000 per month in gross wages, from which $500 in  federal taxes was withheld, would count as $4,000 in payroll costs. The employee would receive  $3,500, and $500 would be paid to the federal government. However, the employer-side  federal payroll taxes imposed on the $4,000 in wages are excluded from payroll costs under the  statute. 

Premier Business Lending is doing our part staying abreast to the new PPP loans coming to  fruition as we speak. If you would like more information on the PPP loan, please do not hesitate  to reach out and speak to a finance consultant who will happily answer any questions you may  have.  

Apply for your PPP Loan now: APPLY FOR MY PPP LOAN

Premier Business Lending cannot provide legal, tax, or accounting advice. You should consult your own  counsel, accountant and other advisors to evaluate your individual facts and circumstances in connection with  your PPP loan and the forgiveness process.

504 Relief Loans

504 Loan Program Helps Assists Nation’s Small Businesses with Record $1.28B Funding in September

The Small Business Administration (SBA) 504 Loan Program completed its largest monthly funding of loans in the program’s 34-year history, including 1,462 loans for nearly $1.3 million more than double the previous record set in September 2012. Historic levels of 504 loan closings and funding’s were driven by record low interest rates and debt relief provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Additionally, small businesses continue to benefit from SBA’s April 2018 introduction of a 25-year maturity option for 504 loans which complemented the program’s 10- and 20-year terms. The 25-year term provides an affordable, fixed-rate option with an attractive term that increases the 504 loan program’s usefulness by lowering monthly payments and improving borrower cash flow – particularly critical, as small businesses continue economic recovery from the COVID crisis.

 

Premier Business Lending, a California Licensed Lender recently began offering SBA product 504 Loan Program and the 7A loan program in order to help current customers during these difficult times.

 

The 504 Loan Program is an SBA business loan program authorized under the Small Business Investment Act of 1958. The core mission of the 504 Loan Program is to provide long-term financing to small businesses for the purchase or improvement of land, buildings and major equipment, to facilitate the creation or retention of jobs and to support local economic development. 504 loans offer fixed rates for 10, 20 and 25 years and finance project costs of approximately $100,000 to $25,000,000. Under the 504 Loan Program, loans are made in conjunction with private sector lenders to small businesses by Certified Development Companies (CDCs), which are certified and regulated by the SBA to promote economic development within their community.

Best Small Business Loans for Bad Credit of 2017

If you have poor to fair credit, which is any personal credit score below 630, you’re often out of luck when it comes to getting loans from traditional lenders. However, many alternative sources such as Premier Business Lending and nonprofit lenders believe that credit scores are not always the most important factor to consider, and they have stepped in to fill this funding gap.

Small business owners frequently have trouble getting funds from traditional lenders because they often cannot meet the strict requirements. Small business owners with bad credit face even more obstacles when getting financing, even from some alternative lenders. If you are able to secure a loan, you’ll typically see much higher APRs and fees. It’s important for borrowers to pay attention to rates, fees and terms when evaluating loan options for their business. Certain lenders will also require collateral or personal guarantees to secure loans. Premier Business Lending has several options from a product standpoint in order to help todays small business owners. Before you agree to accept funds from a lender, be sure that you understand the terms and risks associated with the offer.

The best way to take advantage of a business loan if you have bad credit is to have a strong business plan with clear goals. You should also be making every effort to repair your bad credit, which can include paying your bills on time, cutting costs and reducing credit card usage. You can check your credit report for free once a year, so keep track of the progress you are making. It can take years to fix a damaged credit score, but actively taking steps toward improvement will benefit you and your business in the long-run.

Besides traditional term loans and lines of credit, small business owners with bad credit should also consider other ways of getting funds such as secured small business credit cards, invoice factoring, merchant cash advances, personal loans and business grants.

Indeed, there are reasons for continued optimism for small business owners in the new year:

1) Although rates went up, the increase was small, which is good news for borrowers seeking capital. The hike was something for credibility, since they signaled a change for months, rather than actual impact. Lenders are showing signs of opening up the purse strings. The flow of capital is the life blood of small business. Big banks and institutional lenders are approving higher percentages of loan applications, and smaller banks are granting about half of the requests.

2) While the Fed signaled, it would raise rates in 2017, the amounts will likely again be small. It is better than being overaggressive, and the rest of the world’s economy is not growing. Incremental increases give the Fed the ability to measure impacts.

There has been an influx in equipment leasing we have seen in the first quarter of 2017 which shows economic structure and balance. Rather it is a short term working capital loan, a bridge loan or an equipment purchase Premier Business Lending has shown the ability to help guide business owners through the sometimes-confusing financing industry. This is one of the key principles in which the company was founded, truly being an educational resource to business owners.

3 Strategies for Getting Into Lending Shape

Convincing a lender of your need and viability as a business can often be the biggest hurdle

There comes a time for virtually every small business when the need to secure outside financing arises. Whether it’s to fund day-to-day operations, invest in new equipment and inventory, or simply have enough cash on hand to get through slower seasons, many business owners rely on outside financing.

But while funding opportunities abound, convincing a lender of your need and viability as a business can often be the biggest hurdle. It’s a stressful, complex, time-consuming process. Here are three categories a small business owner should keep in mind in order to get in and stay in lending shape and increase your chance of approval.

1. Before applying keep a clean house.

Before you ever need to apply for financing — whether it’s through a traditional bank loan or an option from alternative lenders such as Alternative Loans, lines of credit, bridge loans or a SBA Loan — there are actions you can take to prepare.

A lender will look at four primary factors to determine your eligibility. In order of importance, they include cash flow, time in business, credit score and collateral.

Cash flow: It may go without saying, but every business should ensure its books are accurate and updated.

In addition, lenders primarily underwrite by looking at the inflows and outflows of your business’s bank account. Key metrics that a lender will look at are average daily balance (the higher, the better), volume of deposits and total number of non-sufficient funds (NSF).

Time in business: Much like credit, the longer you can demonstrate a track record of your time in business, the better. It’s critical your business is registered locally and your nine-digit tax information is registered appropriately.

Credit score: Your personal record of financial management is just as important as your business’s. After all, it’s indicative of overall management and attention to detail. Not sure what your credit score is?

Collateral: Assets are crucial when it comes to securing financing because the lender needs reassurance that there’s a way to recoup costs if the loan defaults. Be sure to document all equipment, property and anything that could qualify as an asset under management, along with the associated value as each asset is added to the business.

If you can check all four boxes, you’ll have the best chance at getting the right loan. Conversely, if you have zero boxes checked, you’re unlikely to be approved. If you happen to only have one of the four, there might be an option, but with a higher interest rate or less than favorable payment terms increasing your cost of acquiring the capital you need.

2. During the process leave no stone unturned.

Once it’s time to apply, get your ducks in a row. Lenders will review your application with a fine-toothed comb, looking for discrepancies, omissions, and any reason to deny your request. To improve your chances of securing financing — and doing so quickly — there are some items you should expect to provide.

Bank statements: Be ready to provide a minimum of three to six months of bank statements, but note that your profit and/or loss over the last two years are usually the most relevant metrics. Be sure you can provide detailed information for that period of time. Without it, lenders can’t properly assess your business and need for financing.

Tax returns: Depending on the loan product, there’s a good chance lenders may want to see tax returns over the past two years. Have those on hand in both printed and digital copies when possible.

Current debts and credit: You’ll also be expected to provide information on all debt such as leases, liens and credit adjustments. For all property expenses like mortgages, be sure this information is current and on-hand.

For further background, there’s a chance the lender will conduct interviews with your coworkers or landlord, so prepare all your associates and contacts for a potential call.

3. Getting the “right” financing for you.

At the end of the day, your goal is to secure financing and affiliated terms that are right for your business right now. Remember, a “good” loan depends on the intended need.

With all the options, available and constant changes to the lending space, many business owners skip over some crucial details and believe the lowest rate is the best loan, but that’s not always the case. The best loan could be the largest loan size, longest repayment terms, fastest to fund and arrive in your bank account, or the lowest payback amount.

In reality, it depends on how soon you need the loan, how much you can afford to pay back, the duration of time you need the loan for and how much effort is needed to acquire the loan. Ultimately, it boils down to whether the cost associated with acquiring financing will help grow your business in a way you wouldn’t be able to otherwise.

By determining your financing needs and cost you’re willing to absorb to grow, you’ll have a better idea of the type of financing and terms you’re willing to accept. At every stage of growth in your business, be sure to stay in lending shape by dotting your i’s and crossing your t’s along the way so nothing can slow you down.