Financing Your Path to Success: A Comprehensive Guide to NC Small Business Loans

Financing Your Path to Success: A Comprehensive Guide to NC Small Business Loans

North Carolina’s dynamic business landscape offers fertile ground for small businesses to thrive. Understanding the financial tools available, such as Merchant Cash Advances, business lines of credit, term loans, collateralized finance, and reverse consolidation loans, is crucial for any entrepreneur looking to navigate the path to success. New Bridge Merchant Capital provides a range of these financial solutions, tailored to meet the diverse needs of North Carolina’s small businesses.

Merchant Cash Advances: Quick Access to Capital

Merchant Cash Advances (MCAs) offer a swift and flexible financing option for businesses in need of immediate funding. Especially suitable for enterprises with high credit card sales, MCAs provide funds based on future sales projections, allowing businesses to maintain cash flow during fluctuating sales periods.

Business Lines of Credit: Sustaining Cash Flow

A business line of credit provides a cushion for businesses to draw upon as needed, making it a versatile tool for managing cash flow fluctuations and unexpected expenses. This flexible financial solution allows businesses to adapt quickly to market changes and seize growth opportunities as they arise.

Term Loans: Funding Long-term Goals

Term loans are ideal for businesses planning significant investments like equipment purchases or expansions. These loans provide a lump sum of cash upfront, with a fixed repayment schedule, offering a structured approach to financing large-scale business endeavors.

Collateralized Finance: Leveraging Assets for Growth

Collateralized finance involves securing a loan against business assets, providing an avenue for businesses that might not qualify for unsecured loans. By leveraging assets, businesses can often access larger loan amounts, potentially at more favorable interest rates.

Reverse Consolidation Loans: Streamlining Debt

For businesses juggling multiple debts, reverse consolidation loans offer a strategic solution. By consolidating existing debts into a single manageable payment, businesses can simplify their financial management, focusing more on growth and less on debt.

The Application Process: Partnering with Experts

Applying for small business loans requires a comprehensive understanding of your financial situation and business objectives. Companies like New Bridge Merchant Capital assist businesses in preparing detailed financial statements and robust business plans to ensure a smooth application process and improve the chances of loan approval.

Understanding Interest Rates and Repayment Terms

Interest rates and repayment terms vary greatly among different financial products. It’s crucial to understand the total cost of borrowing, including any fees, to make an informed decision. Businesses should consider not only the immediate benefits but also the long-term impact on their finances.

The Impact of Credit History on Loan Approval

A strong credit history can significantly improve the chances of loan approval in NC. Businesses should strive to maintain a good credit score and rectify any issues before applying. However, options like MCAs provide alternatives for those with less-than-ideal credit.

Government Programs and Resources

NC businesses can also explore government-backed loans and resources, such as those offered by the Small Business Administration (SBA). These programs often have favorable terms and can be an excellent source of funding for qualifying businesses.

FAQs About NC Small Business Loans

  1. How do MCAs work for seasonal businesses? MCAs are particularly beneficial for seasonal businesses as the repayment is aligned with the business’s sales volume, offering flexibility during off-peak seasons.
  2. What should businesses consider when choosing between a line of credit and a term loan? The choice depends on the business’s financial needs. A line of credit offers flexibility for ongoing expenses, while a term loan is better suited for one-time, significant investments.
  3. Can businesses with limited assets obtain collateralized loans? While collateralized loans typically require assets, there are various financing options available for asset-light businesses, including unsecured loans and MCAs.
  4. How do reverse consolidation loans improve financial health? By consolidating multiple debts into one, reverse consolidation loans simplify debt management, potentially lower interest rates, and streamline monthly payments.


Understanding and utilizing the right financial tools is essential for the growth and sustainability of small businesses in North Carolina. From Merchant Cash Advances to term loans, there are numerous options available to suit different business needs and goals. By exploring these options and seeking expert guidance from companies like New Bridge Merchant Capital, entrepreneurs can successfully finance their path to success. Contact us today.

Business Loans Without a Personal Guarantee: Exploring Your Options

Business Loans Without a Personal Guarantee: Exploring Your Options

Navigating the world of business finance can be challenging, especially when looking for loans that don’t require a personal guarantee. A personal guarantee can be a significant barrier for business owners who prefer not to risk personal assets. This article explores various business loan options available without a personal guarantee, ensuring you can make informed decisions for your business’s financial future.

Key Takeaways

  1. Risk Mitigation: Loans without personal guarantees protect personal assets from business liabilities.
  2. Credit Building: These loans help in building a business’s credit profile, crucial for future financial endeavors.
  3. Investor Confidence: Businesses not risking personal assets are often more appealing to investors.
  4. Flexibility and Accessibility: Various loan types cater to different business needs, offering flexibility and easier access to capital.


Types of No Personal Guarantee Business Loans


Loan Type Typical Interest Rate Repayment Term Ideal For
Unsecured Business Loan Varies 1-5 years Established businesses with strong credit
Business Line of Credit Varies Revolving Businesses needing flexible working capital
Invoice Financing 1.5-3.5% per month Until invoice payment Businesses with regular invoicing cycles
Merchant Cash Advance Factor rate 1.2-1.5 6-18 months High credit card transaction volume businesses
Microloans 5-20% 1-6 years Startups and small businesses
Crowdfunding N/A N/A Businesses with strong social presence or unique products

Comparing Loan Eligibility Criteria


Loan Type Credit Score Requirement Annual Revenue Requirement Time in Business
Unsecured Business Loan 680+ $100,000+ 2+ years
Business Line of Credit 630+ $50,000+ 1+ year
Invoice Financing 600+ Based on invoice values 6+ months
Merchant Cash Advance 550+ $50,000+ 6+ months
Microloans 575+ Varies N/A
Crowdfunding N/A N/A N/A

What is a Personal Guarantee?

A personal guarantee is a commitment by the business owner to repay a loan personally if the business cannot. It often involves risking personal assets, like your home or savings. However, there are financing options that allow business owners to secure funds without this requirement.

Why Choose Loans Without Personal Guarantees?

  • Risk Management: Opting for loans without personal guarantees is a strategic move to protect personal assets like your home, car, or savings. In a volatile business environment, this separation of personal and business liabilities is crucial. It ensures that in case of financial difficulties or business failure, your personal assets remain unaffected. This separation is especially vital for small business owners who might not have a wide array of personal assets.
  • Business Credit Building:  Using loans without personal guarantees can significantly contribute to building your business’s credit profile. As your business independently repays these loans, it establishes a credit history, enhancing its creditworthiness. This is critical for future financial endeavors, as a strong business credit score can open doors to larger loans, better terms, and increased trust from lenders and suppliers.
  • Investor Appeal: When personal assets are not entangled in business finances, it makes your business more attractive to potential investors. Investors typically prefer clean and clear financial structures where personal finances are not at risk. This clarity can lead to more investment opportunities and a better valuation of your business.

Types of Business Loans Without Personal Guarantees

1. Unsecured Business Loans

  • Overview: Unsecured business loans are ideal for businesses that don’t want to put up collateral or a personal guarantee. These loans are typically based on the creditworthiness of the business, which includes factors like revenue, cash flow, and credit history.
  • Best For: They are best suited for established businesses with strong credit histories and a proven track record of profitability. These businesses are seen as less risky by lenders.

2. Business Line of Credit

  • Overview: A business line of credit offers a flexible funding solution. It allows businesses to draw funds as needed, up to a specified limit, and only pay interest on the amount borrowed. This type of financing is like a credit card for your business but without needing a personal guarantee.
  • Best For: Ideal for businesses that need ongoing access to working capital and want to manage their cash flow more effectively. It’s particularly useful for businesses with seasonal fluctuations in cash needs.

3. Invoice Financing

  • Overview: Invoice financing allows businesses to borrow against the amounts due from customers, providing immediate cash flow based on outstanding invoices. This method doesn’t require personal guarantees as the invoices themselves act as collateral.
  • Best For: Businesses with a B2B model, having reliable customers and regular invoicing cycles. It’s particularly beneficial for businesses with long invoice payment terms.

4. Merchant Cash Advances

  • Overview: Merchant cash advances provide funds based on future sales, usually repaid via a percentage of daily credit card transactions. This financing option is not a loan in the traditional sense and typically doesn’t require a personal guarantee.
  • Best For: Businesses with a high volume of credit card transactions, such as retail stores or restaurants, and those needing quick access to cash.

5. Microloans

  • Overview: Microloans are smaller loans, often offered by non-profits or government entities. These loans are designed to support startups and small businesses that might not qualify for traditional bank loans and typically do not require personal guarantees.
  • Best For: Startups, small businesses, and entrepreneurs who are just beginning and have limited access to other forms of financing.

6. Crowdfunding

  • Overview: Crowdfunding involves raising small amounts of money from a large number of people, typically via online platforms. It’s a way to secure funding without traditional loans or personal guarantees, relying instead on the appeal of your business idea or product.
  • Best For: Businesses with innovative products or services that resonate with a wide audience. It’s particularly effective for businesses with a strong social media presence or community support.

Applying for a No Personal Guarantee Loan

Assessing Your Eligibility

  • Credit Score: Your business credit score is a key factor in loan approval. It reflects the creditworthiness of your business and influences the terms and interest rates of your loan.
  • Financial Statements: Up-to-date financial statements give lenders insight into the health of your business. This includes balance sheets, income statements, and cash flow statements.
  • Business Plan: A comprehensive business plan is essential. It should detail your business model, market analysis, growth strategy, and how you plan to use the loan. A strong business plan can significantly improve your chances of loan approval.

Choosing the Right Loan

  • Interest Rates: Interest rates can vary widely, so it’s important to compare rates from different lenders to find the most cost-effective option.
  • Repayment Terms: Consider how the loan’s repayment terms align with your business’s financial projections and cash flow. Ensure that the loan terms do not put undue strain on your business finances.
  • Lender Reputation: Choose a reputable lender with a track record of supporting small businesses. Research and read reviews to understand other borrowers’ experiences.

Tips for Success

  • Build Business Credit: Work on establishing and maintaining a strong business credit history. This includes paying bills on time, keeping credit utilization low, and regularly checking your credit report for errors.
  • Financial Management: Demonstrate sound financial management practices. Maintain detailed records, minimize unnecessary expenses, and plan for future financial needs.
  • Professional Advice: Seek advice from financial advisors or consultants. They can provide valuable insights into the types of loans that best suit your business needs and help you navigate the application process.


  • Q: Can startups get business loans without personal guarantees?
    • A: Yes, startups can consider options like microloans or crowdfunding, which typically don’t require personal guarantees.
  • Q: Are interest rates higher for no personal guarantee loans?
    • A: Interest rates can be higher due to the increased risk to lenders, but this varies by loan type and lender.
  • Q: Can I get a loan without a personal guarantee if my business credit is poor?
    • A: It’s challenging but not impossible. Options like merchant cash advances may be available.
  • Q: How long does it take to get a no personal guarantee loan?
    • A: It varies. Some options like merchant cash advances offer quick funding, while others like SBA loans may take longer.
  • Q: Do no personal guarantee loans affect personal credit?
    • A: Generally, they do not affect personal credit unless the business defaults and the loan was personally guaranteed.
  • Q: Can I use these loans for any business purpose?
    • A: Yes, most of these loans can be used for a variety of business purposes, from operational expenses to growth initiatives.


Securing a business loan without a personal guarantee is feasible, especially with the right preparation and understanding of available options. These loans can provide the necessary capital to grow your business while protecting your personal assets.

For more insights and assistance on securing business loans without personal guarantees, visit New Bridge Merchant Capital. We offer a range of financial solutions designed to meet the unique needs of businesses like yours.

Ready to explore your loan options? Contact us today for expert guidance and support.

Restaurant Renovation Loans: Transforming Your Dining Experience

Restaurant Renovation Loans: Transforming Your Dining Experience

The restaurant industry is dynamic and highly competitive, requiring constant innovation and adaptation to meet customer expectations. One of the ways to stay ahead is by renovating your space, which can breathe new life into your restaurant. However, funding these renovations can be a challenge. This is where restaurant renovation loans come in, offering a viable solution to finance your refurbishment dreams.

Key Takeaways
  • Restaurant renovation loans allow owners to finance upgrades to revitalize their business.
  • These loans can be used for small aesthetic changes or major structural renovations.
  • Traditional bank loans offer low rates but can have strict eligibility requirements. SBA loans also offer competitive rates with more flexible criteria.
  • Merchant cash advances provide fast funding but have higher costs. Alternative lenders can also deliver quick financing with flexible terms.
  • Having a solid business plan and cost estimates is key to getting approved for the best loan.


Comparison Table
Loan Type Interest Rates Loan Amount Approval Time Eligibility
Traditional Bank Loan Low High Slow Strict
SBA Loan Competitive High Slow Moderate
Merchant Cash Advance High Low Fast Flexible
Alternative Lender High Moderate Fast Flexible

Understanding Restaurant Renovation Loans
Young chef in eyeglasses decorating dish with vegetables on plate at table in kitchen

Understanding Restaurant Renovation Loans

Restaurant renovation loans are designed specifically for the needs of restaurant owners, providing the necessary funds to revamp and enhance dining spaces. These loans can be used for various purposes, from minor aesthetic updates to major structural changes.

Why Consider a Renovation Loan?

Stay Competitive

Refreshing the look of your restaurant is more than just a cosmetic upgrade. It’s about staying relevant in a rapidly evolving industry. A renovation can reposition your restaurant in the market, help you tap into new customer segments, and even allow you to adjust your pricing strategy. For example, a modern, chic design can attract a younger, trendier crowd, while a cozy, traditional revamp might appeal more to families.

Increase Efficiency

Renovating your restaurant isn’t just about aesthetics; it’s also about operational efficiency. Upgrading your kitchen with the latest equipment can lead to faster service and improved food quality. Rethinking the layout can enhance the workflow, reduce service bottlenecks, and ultimately lead to a better customer experience. Efficient kitchens also often mean lower energy costs and reduced waste, contributing to a healthier bottom line.

Enhance Ambiance

The dining experience is not just about the food; it’s about the atmosphere. Creating an inviting, comfortable, and unique dining environment can significantly impact customer satisfaction. The right ambiance can make your restaurant the go-to place for special occasions, drive positive reviews, and increase word-of-mouth referrals. Elements like lighting, seating comfort, interior themes, and noise control play crucial roles in enhancing the dining experience.


Types of Restaurant Renovation Loans

1. Traditional Bank Loans

  • Pros: Traditional bank loans typically offer lower interest rates and longer repayment terms. This can make them a cost-effective option for substantial renovations.
  • Cons: However, they usually come with stringent eligibility requirements, including a strong credit history and proven profitability. The approval process can be lengthy and complex, involving detailed scrutiny of your business plan and financials.

2. SBA Loans

  • Pros: SBA loans are partially guaranteed by the Small Business Administration, which can make them less risky for lenders and thus come with competitive interest rates. They are designed to support small businesses and can offer sizable loan amounts.
  • Cons: The downside is the extensive paperwork and strict qualification criteria. The processing time can be longer, making it less suitable for urgent renovation needs.

3. Merchant Cash Advances

  • Pros: These are a quick way to access funds, often with a simple and fast approval process. They are based on future sales and are a good option for restaurants with strong sales but less-than-perfect credit.
  • Cons: Merchant cash advances can be more expensive than traditional loans, with higher costs and shorter repayment periods. They are better suited for short-term financial needs.

4. Alternative Lenders

  • Pros: Alternative lenders offer more flexibility in eligibility criteria and can provide fast funding, often within days. They are ideal for restaurants that need quick funds and may not qualify for traditional loans.
  • Cons: This flexibility comes at a cost, often in the form of higher interest rates compared to traditional banks.

How to Apply for a Restaurant Renovation Loan

  1. Assess Your Needs: Carefully evaluate what renovations are necessary and how they will contribute to your business. Whether it’s a full-scale remodel or targeted upgrades, having a clear plan helps in determining the budget.
  2. Check Your Credit Score: A good credit score is crucial for loan approval. If your score is lacking, consider steps to improve it before applying.
  3. Gather Documentation: Collect all necessary financial documents. This includes income statements, tax returns, and a detailed business plan. Your business plan should outline the renovation project, expected costs, and how the renovations will improve your business.
  4. Compare Lenders: Don’t settle for the first option. Compare terms, interest rates, and eligibility requirements from various lenders to find the best fit for your needs.
  5. Apply: Once you’ve chosen a lender, submit a comprehensive loan application. Be prepared to answer additional questions and provide more documentation.


Tips for Successful Loan Application

Tips for Successful Loan Application

  • Solid Business Plan: A detailed business plan not only helps in securing a loan but also in guiding your renovation project. It should clearly outline the expected return on investment (ROI) from the renovations.
  • Strong Credit History: Work on bolstering your credit score, as lenders will heavily weigh this factor. Pay off existing debts and avoid new credit inquiries in the period leading up to your application.
  • Cost Estimates: Provide detailed and realistic cost estimates for your renovation. This shows lenders that you have done your homework and are serious about efficiently utilizing the loan.


What are the most common uses for restaurant renovation loans?
  • Upgrading kitchen equipment
  • Improving layout and seating
  • Refreshing interior design and decor
  • Installing new flooring, lighting, furnishings
  • Expanding or renovating bathrooms
  • Outdoor patio and facade upgrades
What documents do I need to apply for a renovation loan?
  • Business plan with renovation details
  • Financial statements and tax returns
  • Cost estimates and quotes
  • Existing lease agreements
  • Personal and business credit reports
  • Projected revenue increase from renovations
How long does it take to get approved for a restaurant renovation loan?
  • Traditional bank loans: 1-3 months
  • SBA loans: 2-6 months
  • Merchant cash advances: 1 week – 1 month
  • Alternative lenders: 1-4 weeks
What credit score is recommended for renovation loan approval?
  • Traditional banks usually require 680+ credit score
  • Alternative lenders may approve with 600+ credit score
  • All lenders prefer 700+ credit score for best rates and terms


Restaurant renovations can revitalize your business and boost your bottom line. By choosing the right renovation loan, you can make necessary improvements without straining your finances.

At New Bridge Merchant Capital, we understand the unique challenges of the restaurant industry. We offer tailored financing solutions, including restaurant renovation loans, to help you transform your dining space. Our application process is simple, and we work with you to find the best financing option for your needs.

Ready to renovate your restaurant? Contact New Bridge Merchant Capital today to explore your loan options and take the first step towards a refreshed and revitalized dining experience.

How to Improve Your Business Credit Score

How to Improve Your Business Credit Score

Maintaining a strong business credit score is crucial for the growth and financial health of any company. A good credit score can open doors to better financing options, lower interest rates, and favorable terms from suppliers. In this article, we’ll explore practical steps to improve your business credit score, which can be a game-changer for your business’s financial stability and growth.

Key Takeaways

  • Timely Payments: Regularly paying bills on time significantly boosts your credit score.
  • Manage Credit Utilization: Keep credit usage low to showcase financial stability.
  • Monitor Credit Reports: Regular checks can help identify and rectify errors.
  • Establish Diverse Credit Accounts: Diversify your credit portfolio with suppliers and lenders.
  • Maintain Long Credit Histories: Keep older credit accounts open to strengthen your credit history.

Understanding Business Credit Scores

Before diving into the strategies for improvement, it’s essential to understand what a business credit score is and how it’s calculated. Similar to personal credit scores, business credit scores assess the creditworthiness of a business. They are determined by factors like payment history, credit utilization, length of credit history, and public records such as bankruptcies or liens.

The Importance of a Good Business Credit Score

A strong business credit score is vital for several reasons:

  • Easier Loan Approval: Businesses with higher scores are more likely to get approved for loans, including Small Business Loans and Merchant Cash Advances.
  • Better Interest Rates: A higher score can lead to lower interest rates, saving your business money over time.
  • Supplier Trust: A good credit score builds trust with suppliers, possibly leading to better terms and credit limits.

Strategies to Improve Your Business Credit Score

1. Pay Bills on Time

Timely payment of your bills is the most straightforward way to boost your credit score. Consistent, on-time payments show lenders and suppliers that your business is reliable.

2. Reduce Credit Utilization

Aim to use a small percentage of your available credit. High credit utilization can be a red flag to creditors, indicating potential financial stress.

3. Keep Your Public Records Clean

Any liens, judgments, or bankruptcies on your public record can negatively impact your credit score. Address these issues promptly to maintain a clean record.

4. Monitor Your Credit Reports Regularly

Regularly reviewing your credit reports from major credit bureaus can help you spot errors or fraudulent activities early. If you find inaccuracies, dispute them immediately.

5. Establish Credit Accounts with Suppliers

Having multiple accounts in good standing can positively impact your credit score. Ensure you maintain a good relationship with your suppliers and make timely payments.

6. Increase Credit Limit

Requesting an increase in your credit limit (while maintaining or reducing your actual credit usage) can improve your credit utilization ratio.

7. Keep Old Credit Accounts Open

The length of your credit history impacts your score. Keep older accounts open, even if you don’t use them frequently, to maintain a longer credit history.


Frequently Asked Questions

  • Q1: What factors influence my business credit score?
    • A1: Your business credit score is influenced by several factors including payment history, credit utilization rate, length of credit history, types of credit, and any public records such as bankruptcies or liens.
  • Q2: How can I establish a business credit history if my business is new?
    • A2: New businesses can establish credit by opening a business credit card, securing small trade lines with suppliers, and ensuring these creditors report to the major business credit bureaus.
  • Q3: Is it possible to separate my personal and business credit scores?
    • A3: Yes, it’s possible and advisable. You can separate your personal and business credit by establishing your business as a separate legal entity and applying for business credit under the business’s name.
  • Q4: How frequently should I monitor my business credit score?
    • A4: Ideally, you should monitor your business credit score at least quarterly. This frequency allows you to stay informed about your credit status and address any issues promptly.
  • Q5: Can errors on my business credit report be disputed?
    • A5: Yes, if you find inaccuracies or errors on your business credit report, you can dispute them with the credit bureau. It’s important to provide supporting documentation to facilitate the correction process.
  • Q6: Does paying off loans early improve my business credit score?
    • A6: Paying off loans early can positively impact your credit score by reducing your credit utilization and demonstrating financial responsibility. However, it’s also important to consider how this might affect your cash flow.


Statistics on Business Credit Scores

Here’s a summary of key statistics relevant to business credit scores:

Awareness and Knowledge
  • Business owners unaware of their credit score: 45%​​.
  • Business owners unaware of how to find their credit score information: 72%​​.
  • Business owners unaware of how to interpret their credit score: 82%​​.
  • Owners understanding their score more likely to be approved for bank loans: 41% more likely​​.
Credit Status and Usage
  • Small business owners as credit ‘ghosts’: 39%​​.
  • Small firms using financing in the last year: 73%​​.
  • Small business owners with a personal credit card: 73%​​.
  • Personal credit card used for business funding: 61%​​.
  • Business owners without business credit believing a card would positively impact their business: 90%​​.
  • Small business owners wanting to improve their credit: 88%​​.
Financing and Credit Applications
  • Nonemployer firms applying for financing in the previous year: 32%​​.
  • Approval rate for some type of financing: 59%​​.
  • Smaller firms’ approval rate: 52%​​.
  • Nonemployer firms not approved for the financing they sought: 41%​​.
  • Reasons for financing denial: Low credit scores, lack of collateral​​.
Startup Capital Sources (2012)
  • Personal savings: 57%​​.
  • Personal credit card: 8%​​.
  • Bank loan: 8%​​.
  • Other personal assets: 6%​​.
  • Home equity: 3%​​.
  • Business credit card: 2%​​.
Differences by Race
  • Black small business owners lacking both personal and business credit cards: 31%​​.
  • White small business owners lacking both types of cards: 12%​​.
  • Higher rate of denial for credit cards for Black owners: Significantly higher​​.


Improving your business credit score is a gradual process that requires consistent effort. By following these strategies, you can enhance your score, which can lead to better financial opportunities for your business.

At New Bridge Merchant Capital, we understand the importance of a strong business credit score. We offer a variety of financial solutions tailored to the needs of different industries. Whether you’re looking for a Small Business Loan, Merchant Cash Advance, or other financial products, our team is here to help. With an easy and fast application process, we make accessing the financial support your business needs straightforward and hassle-free.

Small Business Owner’s Guide to Choosing the Right Term Loan

Embarking on the journey of entrepreneurship is exhilarating and challenging, and it also requires a significant infusion of capital. That is why you are looking for how to choose the right term loan. Small business loans serve as the lifeblood of many enterprises, fueling growth, bridging cash flow gaps, and enabling strategic investments. As such, you need to know how to navigate the landscape of term loans and choose the one that will meet your unique business needs.


This comprehensive small business owner’s guide to choosing the right term loan will demystify all of that and more. Let’s get started.


Understanding Term Loans

Let’s start with the basics: What exactly is a term loan? Think of it as your business’s financial backbone. A term loan is a structured lending arrangement where you receive a lump sum of capital upfront, which you commit to repay over a predetermined period, typically with interest.


There are different kinds of term loans, which will be explained in a moment. Each loan type has unique requirements that you will need to fulfill before being approved.


Why Consider a Term Loan?

Term loans offer versatile solutions to a multitude of business needs, making them a go-to choice for entrepreneurs across various industries. Here’s a deeper dive into why term loans are an indispensable resource:


Benefits of a Term Loan

  • Retain Full Control: Securing funds through term loans allows you to maintain complete control of your business. Unlike equity investments, where you might relinquish ownership or decision-making power, term loans empower you to steer your enterprise independently.
  • Speedy Funding: Time is often of the essence in the business world. While securing capital from venture capitalists or angel investors can be a lengthy process, applying for a term loan from banks, credit unions, or online lenders often results in swift approvals. In fact, some online lenders can green-light your application within minutes.
  • Cost-Effective Borrowing: When comparing borrowing costs, term loans tend to offer a substantial advantage over credit cards. For business owners with strong credit scores, term loan interest rates typically range from 4.9 percent to 9.83 percent, while business credit cards carry an average interest rate of 24.2 percent. It’s worth noting that your credit score plays a pivotal role in determining the cost of borrowing.


Questions to Ask Before Choosing a Small Business Loan in NJ

Before immersing yourself in the world of term loans, it’s imperative to introspect and assess your specific business requirements. These questions will assist in pinpointing your needs, getting to the root of the matter of what will work best and which option is most affordable.


Keep your answers to the following questions on paper or in the back of your mind as you sift through your term loan options:


How much do you need?

Precision is key. Determine the exact amount required to meet your business objectives. Overborrowing can result in unnecessary interest expenses, while underborrowing might leave you short of resources.

What is the purpose of the loan?

Clearly define the purpose of the loan. Are you seeking short-term working capital, financing for essential equipment, or a long-term investment in business expansion?

How long will it take to repay?

Assess the time horizon for repaying the loan. The loan term significantly impacts your financial obligations, so choose wisely.

What is your business track record?

Reflect on your business’s history. How long have you been in operation, and what’s the current financial health of your enterprise?
Have you considered collateral?

Evaluate whether you have assets to offer as collateral for the loan. Collateral can influence loan terms and interest rates.

What are your personal and business credit scores? Understand your credit score and its potential impact on loan terms and eligibility.

Do you have any other financial obligations?

Take stock of any existing loans or outstanding debts your business carries.

Have you weighed short-term vs. long-term loans in NJ?

Determine whether your needs align with a short-term loan to address immediate cash flow issues or a long-term loan for substantial investments.


Your Options for Small Business Term Loans in New Jersey

Now that you have more clarity about your business needs, it is time to explore you loan options. The financial market offers a variety of choices that fall into two categories:


Small Business Administration (SBA) loans
Conventional bank loans


Let’s look at these in more detail.


Small Business Administration (SBA) Loans

The Small Business Administration (SBA) plays a pivotal role in facilitating access to capital for entrepreneurs. While the government doesn’t directly extend loans to small businesses, it partners with banks, community development organizations, and microlending institutions to provide loans while mitigating lender risk.


Pros of SBA Loans

  • Government Guarantee: One of the standout features of SBA loans is the government’s guarantee, covering a significant portion of the loan amount, usually ranging from 75 percent to 90 percent. This guarantee substantially reduces risk for lenders, making them more inclined to extend favorable terms to borrowers.
  • Favorable Terms: Due to the reduced risk associated with SBA loans, borrowers often enjoy more favorable terms, including lower interest rates and extended repayment schedules.


Cons of SBA Loans

  • Approval Duration: The approval process for SBA loans can be more time-consuming than other lending alternatives, often due to the meticulous evaluation process. This often takes anywhere from 30 to 90 days.
  • Extra Fees: Borrowers should be prepared for additional fees associated with SBA loans.
  • Additional Paperwork: Compared to alternative lenders, SBA loans require far more documentation and paperwork.


The Different Types of SBA Loans

SBA loans encompass a range of programs tailored to meet diverse financing needs. These programs facilitate access to capital by partnering with lenders and reducing their risk through government guarantees. The most common SBA loan programs include:


7(a) Loan Program

The 7(a) loan is the SBA’s flagship program and offers versatile financing solutions for various purposes, such as working capital, equipment acquisition, debt consolidation, and more. Loan amounts can reach a maximum of $5 million, with flexible maturity terms. Usually maturities are up to 10 years for working capital and generally up to 25 years for fixed assets.


Microloan Program

Geared toward new or growing small businesses, the Microloan program offers smaller amounts, typically up to $50,000, to fund working capital, inventory, supplies, furniture, fixtures, machinery, or equipment. Microloan terms vary depending on factors such as the loan amount, planned use of funds, and requirements set by intermediary lenders.


Disaster Loans

In times of disaster declarations, the SBA provides low-interest disaster loans to businesses, helping them repair or replace real estate, machinery, equipment, inventory, and business assets damaged or destroyed by disasters. These loans can go up to $2 million for qualified businesses.


Real Estate and Equipment Loans

The CDC/504 Loan Program is ideal for businesses seeking long-term, fixed-rate financing for significant assets like equipment and real estate. This program operates with a structure where the SBA covers 40 percent of total project costs, a participating lender finances up to 50 percent, and the borrower contributes the remaining 10 percent. Loan amounts can reach $5.5 million, with 10- or 20-year maturity terms.


Conventional Bank Loans

Getting a conventional bank loan continues to be a reliable source of business financing that offers both advantages and challenges for businesses to consider.


Pros of Conventional Bank Loans

  • Fast Approval: Due to the absence of federal agency involvement, the approval process for conventional bank loans can often be expedited.
  • Low Interest Rates: Conventional bank loans are typically associated with low-interest rates, making them an attractive option for cost-conscious borrowers.


Cons of Conventional Bank Loans

  • Stringent Approval: Getting approved is a challenge. Approval rates can vary significantly among different banks, and large banks approved only 13.8 percent of funding requests in March 2023, according to the Biz2Credit Small Business Lending Index. Small banks had a slightly higher approval rate at 19.1 percent, while alternative lenders approved 28.4 percent of requests.
  • Balloon Payments: Some conventional bank loans may include balloon payments, which require borrowers to make a substantial lump-sum payment at the end of the loan term.
  • Shorter Repayment Terms: Bank loans generally come with shorter repayment periods compared to SBA loans.


Alternative Lenders: When You Have No or Poor Credit

Alternative lenders have gained prominence for their ability to cater to small businesses with varying credit histories. They offer online applications, quick approval decisions, and funding in a matter of days.


Pros of Alternative Lenders

  • Credit Flexibility: Alternative lenders are more accommodating when it comes to credit histories, making them a viable option for businesses with less-than-stellar credit.
  • Quick Approvals: Approvals from alternative lenders can be almost instantaneous, allowing businesses to access funds swiftly.
  • Less Use Restrictions: Few restrictions exist on how businesses can utilize the borrowed funds, providing flexibility in meeting various financial needs.


Cons of Alternative Lenders

  • Higher Interest Rates: Interest rates from alternative lenders can be higher compared to those from traditional banks.
  • Exercise Caution: Due to the nature of these loans, borrowers must exercise caution and carefully scrutinize the terms and conditions to ensure they align with their business’s financial objectives.


The Different Types of Conventional Bank and Alternative Lender Loans in NJ

Through the conventional bank or an alternative lender, you have different kinds of term loans to choose. Let’s explore the various options:


Working Capital Loans

Working capital loans are short-term financing solutions for businesses in need of immediate cash flow support. Banks and alternative lenders offer working capital loans, enabling small businesses to keep operations running smoothly while they explore additional revenue avenues. However, it’s worth noting that working capital loans often come with higher interest rates and shorter repayment terms.


Merchant Cash Advance (MCA)

Merchant cash advances are a unique type of loan where businesses receive capital based on their monthly credit card transactions. Typically, businesses can access an advance of up to twice their monthly transaction volume. Repayment terms vary by lender, with some deducting a fixed daily amount from the business’s merchant account, while others take a percentage of daily credit card sales.


MCAs are relatively easy to obtain, and funding can be secured within days. However, it’s important to note that interest rates for MCAs can be as high as 30 percent monthly, depending on the lender and the amount borrowed.


Lines of Credit

Business lines of credit provide small businesses with flexible financing options for day-to-day cash flow needs. They are not recommended for significant purchases but are valuable for managing working capital fluctuations. Lines of credit can have short-term durations as brief as 90 days or extend over several years. With a line of credit, you only draw the funds you need and pay interest solely on the amount used, offering flexibility.


These loans are typically unsecured, meaning they do not require collateral. They often have longer repayment terms and can help businesses build their credit ratings if interest payments are made punctually. However, be cautious about additional fees and the potential for accumulating significant debt.


Equipment Loans

In addition to SBA loans, banks and alternative lenders provide equipment loans. These loans and leases allow businesses to acquire office equipment like copiers and computers, as well as machinery, tools, and vehicles. Rather than making upfront payments for significant purchases, business owners make manageable monthly payments. Equipment loans are relatively accessible because the equipment being purchased or leased serves as collateral, preserving cash flow by requiring minimal down payments and offering potential tax benefits.


Franchise Startup Loans

Franchise business loans cater to entrepreneurs seeking financing to open a franchise. Banks and alternative lenders offer these loans, which can be utilized for working capital, franchise fees, equipment acquisition, and establishment of franchise locations.


Invoice Factoring

Invoice factoring loans involve an alternative lender advancing money to small businesses against their outstanding invoices. As invoices are collected, the lender receives the funds along with a fee. This option is suitable for businesses looking to access funding upfront for unpaid invoices.


How to Choose The Correct Term Loan For Your Business

Now that you know more about SBA loans, conventional bank loans, and alternative lenders, it is time to choose which term loans are right for you. Think back first to the questions you asked yourself. Next, look at these tips to choosing the term loan that will help your small NJ business to succeed:


Think About Interest Rates

While the interest rate is undeniably a pivotal factor, it should not be your sole determiner when selecting a loan. Consider this: a mere two-percentage-point difference on a $100,000 loan with a five-year term may not be highly consequential. However, that same difference becomes magnified when applied to a $1 million loan spread over 20 years. Exercise prudence in comparing interest rates and assign more weight to this metric when dealing with larger loan terms.


Short, Medium, or Long Term

Short term loans (2 years or less) are ideal for covering immediate expenses, short-term loans offer quick access to funds. They’re best when you need to bridge cash flow gaps, handle emergencies, or capitalize on sudden opportunities. However, they often come with higher monthly payments and may not be suitable for substantial, long-term investments.


Medium term loans (2-5 years) provide a bit more breathing room for repayment, making them suitable for equipment purchases, expansion, or projects with a moderate timeline. Monthly payments are manageable, and interest rates are often competitive.


Lastly, long term loans (5+ years) are useful for real estate, large-scale expansions, or business acquisitions. They offer lower monthly payments but accumulate more interest over time. Consider these when you have a well-planned, long-term strategy in place.


Uncover Application Fees

Some lenders demand upfront payments for the application itself, while others extend their fees to encompass items related to the application process, such as the cost of running a credit report or appraising collateral. Be diligent in inquiring about any associated fees and factor them into your decision-making process.


Create a Robust Business Plan

Lenders often scrutinize your business plan to assess your ability to repay the loan. Craft a comprehensive business plan that showcases your company’s strengths, market potential, and financial stability.


Seek Professional Advice

Don’t hesitate to consult financial advisors, accountants, or business consultants. Their expertise can provide valuable insights into your financial situation, loan options, and strategies for optimizing your loan’s impact on your business.


Finding The Right Small Business Loan in New Jersey Today

When you are looking for a term loan, you want to make the right choice. After all, securing the right term loan is a critical step in the journey of business ownership. Your choice of financing can significantly impact your business’s trajectory, influencing its growth, resilience, and profitability. By assessing your needs, understanding lender options, and considering the various types of term loans, you’re equipped to make an informed decision that propels your business toward success.


At New Bridge Merchant Capital, we specialize in providing tailored financing solutions to small businesses. Our team of experts is ready to discuss your unique loan needs, explore financing options, and guide you through the application process. Contact us today by filling out the contact form or calling 844-228-0593 to take the next step in securing the funding your business deserves.

The Top Options for New Jersey Small Business Loans

The Top Options for New Jersey Small Business Loans

Launching and growing a small business in New Jersey is no easy task, and securing outside funding is often an essential part of this notoriously challenging process. Fortunately, you can still encounter a range of small business loans in NJ through both private and government-sponsored programs. Several initiatives aim to invigorate and sustain economic development in The Garden State, making New Jersey one of the top places for funding a small business.

In addition to reliable access to private business loans, New Jersey also provides a few government programs offering mentorship, assistance, and professional guidance to both new and existing business owners. These programs not only help entrepreneurs identify and secure financing opportunities but also provide support in various aspects of running and expanding their operations. With countless private and public resources available, you can expect to receive the support necessary to thrive in the competitive New Jersey business landscape.

In the following sections, we will highlight the various government-sponsored loan programs and private lending resources available to small business owners in New Jersey. Whether you are a startup or an established business, understanding these options can help you make informed decisions about your funding needs and ensure the long-term success of your business venture.

SBA Loans New Jersey

SBA Loans

SBA loans, with their low interest rates, long repayment terms, and range of loan programs tailored to different small businesses, can be highly advantageous for New Jersey-based organizations. Although available across the country, SBA loans can be especially valuable for eligible business owners across The Garden State who can endure the often lengthy processing times.

To determine the most suitable SBA loan program, start by evaluating your eligibility requirements. This initial approach will help you navigate the application process and streamline your application. SBA-approved lenders can be an invaluable resource for helping you gather all the necessary documents and preparing your loan package for submittal.

After getting approved for one of New Jersey’s SBA loan programs, your small business can access the funding it needs to continue expanding its footprint and increasing its bottom line. With the support of a reliable and trusted lender, entrepreneurs shouldn’t find it too difficult to realize the benefits of SBA loans and facilitate their business expansion plans.


COVID Relief Funding

The COVID-19 pandemic hit New Jersey businesses particularly hard, with many still struggling to recover from its wide-sweeping impacts. In response to the various challenges posed by local government restrictions, the New Jersey Economic Development Authority (NJEDA) has approved a comprehensive package of seven loan and grant programs designed to provide some relief to area businesses.

One of the key initiatives is the Small Business Emergency Assistance Grant Program. This program, which has been allocated $5 million, offers grants of up to $5,000 to businesses in industries that have been hit the hardest by the pandemic. The retail, entertainment, and recreation sectors are among those eligible for this type of funding. The aim is to help these businesses maintain their post-pandemic operations and support their employees after a difficult time.

These financing initiatives are part of the NJEDA’s commitment to supporting small businesses affected by the pandemic. However, the available funds may not be sufficient enough to fully resolve COVID-related working capital issues that many New Jersey small businesses continue struggling with today.

Exploring Your Options for Small Business Loans in NJ

Alternative Lending Solutions

Whether it’s a merchant cash advance, business line of credit, invoice factoring, or a working capital loan, businesses in New Jersey have a multitude of options to choose from when it comes to financing their operations.

Merchant Capital Advances let businesses receive a lump sum of cash in exchange for a percentage of their future credit card sales. This can be a convenient option for companies with a high volume of credit card transactions but may have difficulty qualifying for a traditional loan due to low seasoning or challenged credit.

Another popular working capital solution is a business line of credit. This type of financing can be secured or unsecured and provides companies with a revolving credit line they can draw from as necessary, up to a predetermined limit. Lines of credit are a flexible option for organizations that frequently encounter fluctuating cash flows or unexpected expenses. However, the financial qualifying requirements can be slightly more stringent, something to keep in mind if you’re applying for a business line of credit in NJ.

Invoice factoring is a common alternative business funding solution in New Jersey. With invoice factoring, businesses can sell their outstanding invoices to a factoring company in exchange for immediate cash. This can help your business improve its revenue streams and access fast working capital without waiting for your customers to satisfy their invoices.

Term loans are common solutions for small businesses in need of short-term financing. Companies typically use this type of financing to cover day-to-day expenses, such as payroll or inventory, and repay them over a short time. Term lengths can range anywhere between three and five years, and the instruments can be secured or unsecured. This funding type is a great option for businesses that need quick funding to keep their operations running smoothly.


Exploring Your Options for Small Business Loans in NJ

At the end of the day, small business owners in New Jersey have a healthy range of alternative loan options to select from. Whether it’s a merchant cash advance, business line of credit, invoice factoring, or working capital loan, each option offers unique benefits to help meet the specific financing needs of small businesses within the state.

As a business owner in New Jersey looking for the best loan program that meets all your needs, the safest approach is to explore all your options. If you’re in the process of seeking reliable business funding solutions, reach out to New Bridge Merchant Capital for a free consultation.

One of our experienced business banking professionals will provide you with personalized advice and assistance in navigating the different loans for small businesses in NJ, ensuring that you secure the financing your business deserves. Don’t hesitate to take the next step toward growing your business. Start your application online now or contact us at 844-228-0593.

The Complete Guide to Taking Out Business Loans to Finance Your Next Restaurant Expansion Project

How to Use a Restaurant Business Loan to Finance Your Expansion

How to Use a Restaurant Business Loan to Finance Your Expansion

Obtaining capital for a restaurant expansion is often the first critical step toward realizing your culinary dreams. As a restauranteur looking to grow, you want make sure you have the best financing options available so you can focus on what you do best—serving up delicious meals to your loyal customers.

In this guide, we’ll present you with everything you need to know about restaurant expansion financing, including what it is and the different expansion financing options to ensure you’re up to speed on the full breadth of available loan products. You’ll learn how to compare and evaluate restaurant financing to encounter the perfect expansion loan for your upcoming project.

By taking the time and effort to properly research expansion financing products, you’ll be in a better position to make an informed decision about the best financing solution for your restaurant. Taking out a New Jersey business loan is a significant commitment, so you want to consider the implications of the financing and all risks they entail. This guide will help you consider all the restaurant funding options and advise you on how to take out the right loan to finance your upcoming restaurant expansion project.

Restaurant expansion financing explained

Restaurant expansion financing explained

Whenever a restaurant business plans an expansion project, one of its primary concerns is obtaining affordable financing. Turning to an alternative business lender is one reliable option many restaurant owners may not have considered. Opening a new loan is often the best -if not the only- way to fund a restaurant expansion due to the speedy process and relatively lower interest rates.

Before a restaurant can access financial services, its owners and staff need to, foremost, understand the types of loans available. New Jersey Business loans come in a variety of forms. Restaurant expansion loans generally fall into two categories: term loans or lines of credit.

A term loan is a lump sum of money that a borrower pays back over a set period of time, with predetermined interest rates and terms. A line of credit is similar to a business credit card, with a set spending limit. The borrower can distribute the funds however they need to for their expansion.

As with any financial transaction, there are several vital considerations. Restaurant owners should carefully weigh the pros and cons of their loan options before making any decision. Taking out a loan requires substantial research and due diligence. When expanding a restaurant business, understanding the impact of each available loan and its associated risks is paramount.

Why do restaurant owners need expansion financing?

Restaurant owners, like any other business owner, may one day want to expand their operations. Whether you’re starting a new restaurant, renovating your existing location, investing in new kitchen equipment, or launching a large-scale expansion into multiple locations, taking on a restaurant expansion project is an exciting growth opportunity. These projects may require access to considerable financial resources that usually need to come in the form of a New Jersey small business loan.

Expansion loans help restaurant owners afford the upfront capital required to launch their next venture. You can leverage an array of lending products to cover a diverse range of costs associated with restaurant expansion, including improving your facilities’ look and feel, accommodating more guests, investing in back-of-house kitchen equipment and supplies, funding operational expenses, creating a reserve for unexpected costs, and working with consultants to modify processes and improve performance.

Business loans can also help fund new revenue streams through rebranding initiatives, consumer packaged goods, or catering services. Access to these funds can be invaluable to many restaurant owners who aim to diversify their services and maximize profits. In fact, loans can often offer cheaper funding in the long run than venture capital.

To ensure your business is in the best position to acquire a restaurant loan, start planning early, verify your financing needs are accurate, and confirm all your financial records are up to date. Strong personal and business credit profiles will demonstrate your commitment and financial responsibility to prospective lenders.

Restaurant owners with their sights on expanding shouldn’t let a lack of cash flow stop them from pursuing their strategic growth objectives. With the right business financing product, you can easily fund your expansion and start immediately reaping the rewards. The capital injection after a new loan can unlock your restaurant’s full potential and let you take the next step toward establishing long-term success.

When should think about restaurant expansion financing?

When should think about restaurant expansion financing?

When running a restaurant, owners are often faced with decisions on how to take their restaurant operations to the next level without breaking the bank. While expansion projects are the most obvious solution to this problem, an endeavor like this often requires significant upfront capital. To fund their expansion projects, many restaurateurs have been turning to alternative business funding solutions.

But when should you start seriously thinking about taking out a small business loan in NJ? Let’s take a look at why restaurant owners should consider using business loans to finance a few popular expansion projects.

Expanding your current space can include anything from adding an outdoor bar to additional seating, expanding your kitchen, or providing more parking space. These projects can require a large sum of money upfront, making business loans a great option for businesses low on working capital.

Restaurant owners who have been in business for a considerable time often need to acquire or upgrade their kitchen equipment. With all the technology now available, it’s important to keep up with the local competition. If you find yourself in need of cash, New Jersey small business loans provide a convenient solution.

Renovating your existing space to reflect a more modern venue is another common expansion project we see often. You may want to completely makeover your restaurant, from the furniture to the décor. Business loans can allow you to finance the entire project without any pressure.

Opening a second location may also be a smart idea, as well, and business lenders can help you acquire the necessary real estate. Likewise, you may also need to rebrand or add more items to your menu. Opening a new expansion loan account can help do just that.

What are the most common restaurant expansion financing solutions?

You’ll encounter several expansion finance options out there for restaurant owners. Knowing where to look and which loans to consider can make a big difference in achieving that next milestone for your business. Now, in the sections below, let’s explore some of the most common restaurant expansion solutions in today’s business lending market.

A term loan from a traditional brick-and-mortar bank is among the most popular options for business owners. As with any loan, you’ll encounter advantages and disadvantages to this financing type. Depending on the size and scope of your restaurant expansion project, a term loan may be a good match, particularly if you can demonstrate a solid credit history and can offer up collateral in exchange for the loan.

Alternative loans provide business owners with a different funding path than traditional bank loans. Rates and terms can vary significantly from one lender to the other. This same principle follows for the industries they lend to. Alternative loans frequently provide business owners with much faster funding than a bank term loan, and some lenders are willing to accept lower credit scores than conventional banks.

Small Business Association (SBA) loans are products with which the government partners with traditional lenders to make available to small business owners. These loans can be attractive because they often have lower interest rates and flexible terms. However, due to the high level of government involvement, the qualification process can be a long and arduous process.

A merchant cash advance loan could be an excellent solution for businesses that accept credit or debit card payments. A merchant cash advance provider will provide a lump sum to your company in exchange for future income generated from its credit card transactions. While these types of loans usually have higher fees, their repayment flexibility can be helpful for restaurant owners.

Business lines of credit have demonstrated to be an ideal solution for businesses that need short-term solutions. They offer flexibility in both repayment and release of funds. With a business line of credit, you can access funds when you need them and you only pay interest on the balance you draw.

Equipment financing allows business owners to purchase necessary equipment without dipping into their cash flows. Most lenders are flexible concerning repayment terms, and the application process can be much quicker than other financing solutions. Equipment financing is also attractive because it usually does not require a high credit score or additional collateral.

Restaurant owners who wish to expand their operations will encounter several funding options, and the examples listed are just a few primary solutions many business owners have been leveraging to drive revenue and growth. Finding the right solution for your business necessitates careful research, reliable education, and due diligence. Hopefully, thus far, this guide has provided the necessary resources and information to set you on the right path.

What are the most common restaurant expansion financing solutions?

Steps to prepare for taking out an expansion financing loan

Accessing capital for your restaurant expansion project can seem like moving mountains at first. However, with the right preparation, there are a few proven strategies to make the process go smoothly. Before presenting your business plan to lenders, you, as the business owner, must have a clear picture of your conceptualized expansion, target customers, staffing requirements, market analysis, cash flow projections, premises rental, and energy costs.

Start by drawing up a well-structured business plan for your lender’s review. Be sure to describe the concept of your restaurant expansion in detail, along with who your target customers are and how you plan to reach them. Also, account for the anticipated staffing requirements, from managers to servers to cooks.

Next, take the time to perform a comprehensive market analysis for the area surrounding your desired expansion space. Outline the competitive landscape, analyzing the strengths and weaknesses of your competitors. You should also review recent sales trends to predict how your restaurant idea would fare against them.

Determine the necessary cash flow projections for the financing of your restaurant expansion. This includes accounting for premises rental, energy costs, and other expenses. Project your cash flow patterns over several years to uncover potential slow periods in the business.

Presenting a well-crafted business plan to lenders takes a lot of preparation, but doing so effectively can make the loan acquisition process much smoother. When you map out your restaurant expansion concept, target customers, staffing requirements, market analysis, cash flow projections, premises rental, and energy costs, you ensure the lender has all the relevant details to make an informed underwriting decision about your loan.

How long does it take to get an expansion loan approved?

As you consider your financing options for your next restaurant expansion project, you might be curious about the average time it takes to find an approval. On the whole, it really depends on your circumstances and the creditor, since timelines can vary you can significantly.

You can reasonably expect the approval process to take anywhere from a few days to several weeks. Once approved, you should be able to access the capital quickly, however, and begin executing your expansion plans straight away.

In determining whether or not to approve the loan, lenders will evaluate the total payback of the loan by examining fixed-rate payments versus variable-rate payments to establish your overall debt burden. They will also look at whether or not you are required to put up collateral to secure the loan. Keep in mind, as well, lender reputation. A creditor with a good track record will be more inclined to extend favorable terms and conditions to you.

Again, the timeframe for your loan approval will vary, and it really depends on the nature of your loan request and the financial health of your restaurant. Working closely with your lender and following up promptly with any additionally requested documents is the best approach for ensuring a fast approval. Any reputable business lender should be offering helpful advice along the way to get you to the signing table as quickly as possible.

Your financial well-being only benefits if you can secure the loan in a timely manner, so it is in your best interest to ensure that you get all the necessary paperwork in order and choose a credible lender with experience in restaurant financing. Follow the steps outlined above, and the transition into a bigger, more modernized space and profitable restaurant model should be quick and relatively stress-free.

Evaluating the best restaurant financing options

When you decide to take out a loan to finance your restaurant expansion project, carefully evaluating all the different loan options is crucial. This approach can save you a great deal of time and money while relieving several common headaches as you progress through the entire approval process. Here’s a breakdown of what you should consider before committing to any loan product:

  • Loan Amounts – Make sure the loan amount covers your expansion needs; otherwise, you’ll be left scrambling for further financing.
  • Rates and Fees -Take time to understand the interest rates, closing costs, and other fees associated with the loan.
  • Payment Terms – Be aware of the repayment terms, how long you’ll have to make payments, and what happens if you miss a payment.
  • Funding Speed – Finally, consider how fast you can get the funds and how they will be dispersed. Many lenders won’t approve a loan until all requirements are met.

Each of the above factors can influence the time it takes to approve a restaurant expansion loan. Expect the process to take anywhere from 3-6 weeks, on average, though it can take longer, depending on the lender and your loan amount. Keeping these key elements in mind will spare you from losing time, becoming frustrated with the application process, or, worse, getting into the wrong expansion financing product.

Explore your restaurant funding options with a reputable loan service provider

When growing your restaurant, it pays to work with a credible business lender. You’ll need an experienced financial provider familiar with the restaurant industry and its challenges, such as seasonal fluctuation in demand.

Conducting careful research and being aware of the various red flags discoverable in the swath of disreputable business loan service providers is critical for avoiding costly mistakes and overpaying for borrowing costs.

When searching for restaurant financing options, remember to communicate openly with prospective lenders to ensure you understand the full picture of the loan pricing and process. This will help you to better vet prospective business loan service providers and minimize the economic burden of borrowing funds.

Your decision to take on financing is a major step in the life and growth of your restaurant. To ensure that you have evaluated all of your options and selected the best loan to meet your business needs, it is important to contact a reputable financial institution like New Bridge Merchant Capital.

After speaking with one of our business lending experts, you will be able to determine which loan product best fits your restaurant expansion goals and budget. Finally, as you evaluate the financing options for your restaurant expansion project, always remember the importance of open communication on both ends of the transaction. This ensures you understand the full scope of the loan and its complex terms.

If you’re looking to compare an existing loan offer or start a new application, contact a business loan consultant at New Bridge Merchant Capital now at 844-228-0593 for a comprehensive review. We’ll let you know which of our restaurant expansion loan products you qualify for.

Secondary Business Financing: The Risks, Alternatives, and How to Make an Informed Decision

Should You Take Out a Second Business Loan?

Should You Take Out a Second Business Loan?

Making an informed decision about your second business loan will undeniably have a long-lasting impact on the growth and success of your company. Second business loan origination, also known as loan stacking or piggyback loans, describes the process of taking out secondary secured or unsecured business financing in addition to the loan product you currently have.

While most savvy business owners are aware of the potential risks of opening multiple loan accounts, it is still worth reiterating which secondary loan products could be beneficial. Discussing other viable alternatives to opening another loan is valuable, as well. The following information will help you make the best choice when it comes to evaluating how to support the financial health and profitability of your business.

In this article, we will discuss the risks associated with second business loans, potential alternatives to taking out another loan when you have an existing one, and how to make an educated decision on whether secondary business financing is right for your business.

What are second business loans?

Second loans are relatively common among business owners seeking to expand, restructure, or take advantage of new business opportunities. Opening a new loan account on top of the one you already have can provide the necessary working capital for entrepreneurs facing financial shortfalls, cash flow challenges, and time-sensitive opportunities.

Several secondary business lending products can supply the extra boost your organization needs to realize its growth potential. However, since it carries various risks that could damage a company’s fiscal health, whenever you take on additional business debt, this decision should never be taken lightly.

Opening another loan account demands careful consideration because it could disrupt your financial stability if you make the wrong choice. It’s not uncommon for businesses that feel like they need additional funding to land themselves in the wrong financial product that strains their ability to repay their existing loans while keeping up with another payment schedule and interest rate.

Moreover, failure to repay this new loan could lead to significant financial losses, due to the added expenses, potential late penalties, and loan origination fees. Remember, your second loan’s pricing is premised upon your credit rating and the overall financial health of your business, making the loan more costly if you overextend your debt or haven’t been keeping up with your existing payments.

Before making any decision to take out a second business loan, entrepreneurs should also assess the various alternatives. You should first consider whether or not can safely utilize existing capital, available credit lines, or your other loan accounts, since this option could prove less expensive in the long run. One such viable alternative may include applying for governmental programs or restructuring your current loans in a refinance to improve the terms.

Regardless of whether you decide to take out a loan or an alternative, exercising caution is crucial. Before making the decision, ensure that you understand the repayment terms, interest rates, length of term, and total costs of the loan. Thoroughly researching a prospective loan product and consulting a trusted business lending consultant is essential. Ensure that you understand the financial benefits of the loan before signing any agreement, and the terms should be tailored to your company’s specific needs and abilities to repay in full.

For entrepreneurs to make an informed decision on whether a second business loan is the right option, they should assess their overall situation and available alternatives. Familiarizing yourself with the tangible risks a second loan could pose to their business is equally important.

When you thoroughly research all terms and conditions and understand the repayment structure and potential hidden costs associated with the loan, you’ll be in a much better position to benefit from a second loan product. This approach ultimately helps you make the most informed decision possible on whether taking out a second business loan is the best path for your organization.

Can I get a second loan?

Can I get a second loan?

When your business needs fast capital, and you already have an existing loan your only option may be to apply for secondary business financing. Of course, this is not always the most financially wise decision, so considering the consequences before applying is vital. To get approved for a second loan, you must qualify by evidencing a solid financial history and meeting certain criteria.

When considering a second loan, the first step is to review credit reports from all three of the major credit bureaus: Experian, Equifax, and TransUnion for personal credit scores and the Dun & Bradstreet PAYDEX score in the case of your business credit profile, if you have one. Since lenders base loan approval decisions upon personal and business credit scores, ensuring accurate reporting information is crucial. Any discrepancies in your report should be addressed before submitting a new application.

You should also carefully analyze the type of loan for which you’re applying. In most cases, you’ll have the option of choosing between secured and unsecured loans. Unsecured loans are generally more difficult to qualify for and often come with steeper interest rates. Secured loans, on the other hand, require collateral, but you don’t always need perfect credit, and they typically come with more favorable pricing.

Borrowers should, likewise, be prepared to provide financial information to the lender, such as profit and loss statements, balance sheets, and tax returns. Creditors also require personal information, such as names, addresses, dates of birth, and Social Security numbers for all business owners. Lenders, depending on the circumstances often request additional information, such as a business plan and/or collateral.

Once your application process is complete and the lender has approved the loan request, the borrower will either receive the loan funds directly or through a third party. The repayment terms vary based on the loan amount and product type, so borrowers should ensure that they read and understand all of the relevant loan documentation before signing any agreement.

When deciding if a second business loan is a suitable next step, be sure to consider all of your options carefully. There are advantages and disadvantages to taking out a second business loan; but, with proper research and planning, businesses are all but assured to secure the necessary funds at a reasonable cost.

What are the risks associated with stacking small business loans?

When you cannot obtain adequate funding through traditional avenues, you might find stacking your business loans to finance your operations is always a viable option. And while it can be beneficial to certain businesses, be aware that there are a few potential risks and pitfalls to consider before signing onto a secondary business loan.

One such risk is having too much debt. Businesses that take on multiple loans, each with their own interest rates and repayment terms, can quickly find themselves in a financially precarious position. You want to ensure that the new debt burden won’t become unsustainable. Additionally, businesses should be mindful of their credit health, since multiple loan inquiries and new debt can negatively impact future borrowing capabilities.

Accumulating excessive debt may also lead to less-than-optimal cash flow performance. When you take out different loans from competing lenders, you will find yourself dealing with multiple loan payments with varying due dates. While this is often overlooked, having more than one due date can throw your cash flow out of whack, potentially making it difficult to cover your operating expenses.

Another risk small business owners should be aware of is what might happen in the event of a loan default. When you open more than one loan, this increases the likelihood of falling behind on at least one account. Defaulting on any business loan can have devastating consequences, including a call for full repayment, loss of collateral, legal action, and damage to their credit score. This is why a proper risk assessment before taking any secondary business financing is essential.

Finally, be aware that servicing multiple business loans can lengthen the amount of time you stay in debt. Carrying multiple loan obligations to different lenders with varying terms usually reduces the business’ ability to quickly pay off its debts. If you are extending repayment terms, this decision should be analyzed carefully before committing to a second business or third loan account.

Stacking your business loans offers you the opportunity to access the funds you need, but, as a business owner, you should carefully examine the potential risks associated with this approach. Look at the new debt burden, cash flow demands, potential for default, and the total repayment timeline before deciding if a second business loan is a suitable fit for your organization.

How many business loans can you have at once?

How many business loans can you have at once?

How many business loans can you get? The answer is that it depends. The number of business loans you can hold at one time depends on several factors. The main considerations include your credit score, the amount of capital you have available to invest in the venture, the size of the loan, and the industry you are in. Many lenders will not offer more than one loan to a single borrower. This is due to the increased risk for the lender and the potential for default.

The business lending industry follows generally accepted guidelines for piggyback loans, which are multiple loans taken out on the same collateral within a specific timeframe. The Centers for Industry Research and Standards (CIRS) notes that piggyback loans should not exceed 75% of the collateral’s value. For example, if your collateral is a building worth $2,000,000, the maximum loan amount is $1,500,000. The remaining $500,000 may be used to secure additional financing from other lenders.

As a borrower, consider the total cost of all the loans when planning your business financing strategy. Secondary loans can be a great way to make use of the value of existing assets, but they can also be costly in terms of interest payments. Remember to research and calculate the total cost before taking out multiple loans.

The lending industry follows specific criteria for secondary loan limits. Generally speaking, lenders will not allow a single borrower to have more than three loans at one time. Depending on the amount of the loans, your FICO and DUNS scores, and the creditworthiness of your industry, taking out three loans or more is entirely possible.

Whichever the case, we advise that you consult with an experienced business lending advisor before taking out multiple loans. Since there are numerous factors to consider, a seasoned loan consultant familiar with your industry can give you a better sense of the risks associated with taking out multiple loans and help you plan a reliable long-term growth strategy.

In addition to the loan limit, being aware of the regulations in your state and industry is critical. Some states have specific laws governing the number of loans a single borrower can have at any given time. Before taking out any new secondary financing, refer to your local regulatory guidelines to ensure compliance with all the necessary lending standards.

The most common types of second business loans

The need for additional business financing usually arises after business owners have already leveraged popular options such as conventional bank loans and credit cards. While these are often the go-to choices for business owners, there are several other loan types that shouldn’t be overlooked when you need additional funding. The four most common second business loan types are merchant cash advances, invoice factoring, equipment financing, and business lines of credit.

A merchant cash advance is one of the most common second loan types available and allows for a business to borrow a pre-determined amount of money in exchange for a percentage of future sales. Invoice factoring doesn’t just offer businesses an influx of immediate cash. It also allows the time that would normally be spent chasing down late payments to be focused on other more productive tasks.

Equipment financing options are beneficial when large purchases are necessary as they allow companies to buy now and pay later. Lastly, a business line of credit loan is an effective business finance tool since it lets a business borrow and lend as needed—up to a specified limit or amount.

Considering all of your available options for second business loans?

Connect with New Bridge Merchant Capital business lending consultant today to ensure you receive the best possible terms on your secondary financing. New Bridge Merchant Capital equips companies like yours with the expert advice and premium lending services you need to ensure you make the right decision before opening a second business loan account.

Apply online today, or contact us now at 844-228-0593 to learn more about pricing and our secondary business loan services.

Inventory-Secured Loans: How to Finance Your Inventory and Receive the Best Terms

Inventory-Secured Loans: How to Finance Your Inventory and Receive the Best Terms

Maintaining sufficient working capital is among the primary challenges small business owners face in today’s unpredictable economic clime. When your cash flow starts flagging, seemingly without notice, access to fast funding might appear daunting at first. But luckily, there are several sources of alternative business funding you may not have considered yet, one of which is inventory financing.

In this article, we’ll provide you with a comprehensive overview of inventory financing, its suitability to different business types and applications, its associated pros and cons, and best practices for applying for an inventory-secured loan. By the end, you’ll have sufficient knowledge to make an informed decision about whether or not inventory financing is right for you.

What is inventory financing?

What is inventory financing?

Inventory financing can be an excellent choice for business owners who need quick solutions for replenishing their stock. This loan product represents a type of short-term borrowing solution that gives businesses an opportunity to purchase inventory they can’t pay for upfront at an affordable rate.

The concept is fairly simple. Any inventory you purchase, as well as your existing stock, serves as collateral for the loan. Should your business default on the finance payments, the assets you staked can be collected by the lender to cover any potential losses.

The nice thing about inventory financing is that it’s customizable pursuant to your business needs. You can expect this financing type to come with several unique financial terms engineered to meet your specific requirements and strategic objectives.

The lending terms can vary, with payoff lengths from three months up to three years or more. Borrowers may opt for a set or variable annual percentage rate (APR). Depending on the lending institution, inventory financing term loans, for example, can start as low as $20,000 and go up to $1 million for qualified businesses. Some creditors may allow you to borrow up to 100 percent of your inventory’s value, as well.

Since inventory financing can be tailored to your specific needs, you’ll usually find ample flexibility when it comes to selecting your ideal loan terms. For business owners who need an adaptable financing solution, inventory financing often serves as a reliable long-term option.

This financing type is a great way to build your business through the acquisition of new inventory that you may not have the capital to cover. With the guidance of a business finance expert at New Bridge Merchant Capital, business owners will find identifying and securing an efficient and cost-effective inventory financing option that can be custom tailored to meet their unique business needs.

Which types of business benefit from inventory financing?

Inventory financing is, of course, by implication, best suited to businesses that sell tangible products. It helps ensure your shelves are well-stocked, even in the face of an unexpected financial shortfall.

Inventory financing lenders help companies like yours maintain healthy cash flow while they increase their stock levels. While inventory financing is primarily orientated toward retail stores, wholesalers, and specialty shops, it also offers seasonal businesses a reliable means of boosting their cash flows.

This financing type works by allowing companies to use the value of their inventory as collateral for the proposed funding. The funding structure is generally flexible, and certain lenders may focus on specific types of businesses.

To qualify you for inventory financing, lenders typically assess your financial track record rather than the items you aim to sell. The traditional approval process could make inventory financing less suitable for startups buying inventory for the first time or those with no prior sales.

The possibility of attain an inventory financing loan when you’re first starting out is, by no means, excluded, however, when you consider alternative lending sources. Regardless of who you choose to finance your inventory, this method of borrowing can help you build your business credit and generate short-term working capital to leverage long-term growth.

When should you consider inventory financing?

When should you consider inventory financing?

Any established business that needs to stay well-stocked and increase its inventory levels should consider inventory financing. It’s suitable for several business types, including retailers, wholesalers, and specialty stores. It may also be an effective solution for businesses that experience seasonal fluctuations in demand and need to cover their expenses during the off-season.

Inventory financing lenders assess your business’s financial track record rather than the individual goods you stock. As mentioned, this can make the option less suitable if you’re just starting out.

However, before discounting this option entirely, it’s worth consulting with a reputable business lender to see if you can still qualify for inventory financings or other alternative funding solutions, such as a business credit card, merchant capital advance, or secured term loan.

Inventory financing is a dependable way to sustain a healthy cash flow while expanding your inventory levels to increase sales. But remember to never underestimate the importance of working with credible inventory financing lenders that understand your industry and can provide the right terms to meet your specific requirements. You should also weigh your inventory financing options carefully against other alternative financing solutions to ensure there isn’t a better loan product for your application.

The different types of inventory financing

Many small businesses rely on short-term funding to restock their shelves and pay for supplies upfront, which is why inventory financing has proven vital for managing a stable and profitable business. There are essentially two traditional inventory financing options: loans secured by inventory, or inventory equity loans, and term loans. Both have advantages and disadvantages, and the effectiveness of the financing depends on the season and fiscal health of your company.

For example, inventory financing has grown popular because it allows business owners to use their inventory as collateral to secure a loan from lenders. This type of loan also allows lower credit scores when compared to other loan options, making it among the more accessible short-term financing solutions for low-credit or no-credit business owners. These loans tend to carry a higher interest rate, however, which is why you should explore all your options before committing to any one product.

Unsecured term loans, on the other hand, do not require you to stake personal or business collateral. This loan type usually benefits customers with higher credit scores who are in a good position to take advantage of the lowest borrowing costs. With that mentioned, since the loans are unsecured, they traditionally have stiffer credit requirements than secured loans and, in some cases, higher interest rates.

Alternatives to inventory financing include merchant cash advances, lines of credit, and accounts receivable financing, which many often misconstrued as inventory financing. These alternatives can be more expensive than traditional inventory financing solutions. Nonetheless, they typically entail a streamlined application process for unconventional borrowers who need fast access to working capital.

Knowing the advantages and disadvantages of inventory-secured financing will help you decide on which option best suits your needs. Whether it’s traditional inventory financing or an alternative solution, business owners should take the time to consider every available loan product to ensure the best results.

Loans secured by inventory advantages and disadvantages

While traditional inventory financing is a popular option for many small business owners, the decision to pursue this type of financing must be carefully evaluated. It can provide capital for increased inventory purchases or prevent cash flow issues. It’s not entirely without its downsides, however.

Inventory lines of credit and inventory term loans are generally considered “traditional” inventory financing. Your inventory secures these loans, and the maximum dispersal amount depends on the value of the goods you’re staking as collateral.

In many cases, down payments of around 20 percent may be required before securing the financing. Borrowers must repay the loan in a timely manner, or the inventory is subject to repossession. Likewise, you may be required to use specific fulfillment centers in order to qualify for the loan.

When it comes to satisfying the obligation, you’ll make monthly installments, or the lender may collect a percentage of your sales. It’s also common for a fixed fee to be charged instead of interest, resulting in APRs (annual percentage rates) often surpassing 100 percent. Further alternatives to traditional inventory financing include alternative bank lines of credit, merchant cash advances, and secured and unsecured term loans.

Now that you have the gist of how conventional inventory financing works let’s take a look at a few different popular alternatives to traditional inventory financing:

Lines of credit

Lines of credit give you access to the funds required to replenish your inventory as needed. You can use your inventory as collateral. Or, if you qualify, apply for an unsecured line to cover your operating costs.

Lines of credit require a few more steps than inventory finance loans, however, because you’ll likely have to hand the payment over to the manufacturer yourself. This can make the option more labor-intensive than traditional inventory financing, one reason why some prefer the latter over the former.

Compared to inventory financing fees, the costs to open and maintain a line of credit are usually less expensive. Credit lines typically have an interest rate rather than a fixed fee. Nevertheless, credit lines from online lenders may have higher rates – with APRs reaching as high as 80 percent or more in some cases.

Term loans

A term loan provides a one-time lump sum to be repaid in intervals over a specified time, plus interest. A term loan is a suitable financing option for businesses that do not often require inventory financing or don’t routinely take advantage of it.

Like a line of credit, you can stake your inventory as collateral for the loan. Assuming you qualify, you might also pursue an unsecured term loan that requires no collateral and shifts more risk onto the lender than secured financing.

It’s worth noting that, while the term loan gives you access to funds for attaining additional stock, unlike inventory financing, you are still responsible for paying your suppliers directly, and it may take more time to obtain the inventory itself.

Merchant cash advances

Lenders provide merchant cash advances based on the average monthly sales for businesses that serve customers, such as retailers. Business owners will receive a percentage of their average monthly sales up front and pay it back with a portion of their daily sales plus a fixed fee.

One of the primary upsides to merchant cash advances is that creditors rarely require credit checks or business seasoning. Merchant cash advances are among the most expensive business financing types, however, accruing APRs regularly reaching 300 percent.

The daily payments can be inflexible, as well. Seasoned business owners should, therefore, consider all their lending options before committing to a merchant cash advance since the costs can be high.

How to secure inventory financing

How to secure inventory financing

Inventory financing is an essential and viable solution to attain working capital, but it’s equally important to remember you have access to several other effective funding solutions. Inventory loans, secured by inventory and accounts receivable, are suitable for businesses operating in competitive and cyclical markets where timely financing for inventory purchases is crucial.

This approach to borrowing can help you manage cash flow and stay ahead of your industry counterparts. While inventory financing has its benefits, there are a few disadvantages, like higher borrowing costs and a lack of flexibility with your repayment options. It’s, therefore, crucial that you weigh the pros and cons and explore all your options before securing any business financing.

The experienced lending consultants at New Bridge Merchant Capital can guide you through the process of evaluating whether inventory financing is right for you. We can help you assess a diverse range of small business financing products, including alternative bank lines of credit, merchant cash advances, and secured and unsecured term loans.

Our decades of exposure to the business lending space can put your organization on the path to success, while our financing solutions deliver creative, customized options to businesses across several industries.

Searching for the right loan to secure your business inventory needs?

If you have additional questions on how to finance inventory, dial 844-228-0593 to speak with a New Bridge Merchant Capital lending consultant or apply online now. We’ll guide you through our full suite of business lending solutions that can help you take the next step towards expanding your footprint and securing stable, long-term profits.

Funding Your Small Business in 2023

The Complete Guide for Sourcing Reliable Small Business Funding in 2023


Navigating the realm of small business financing is often complicated. Sourcing the right loan product for your company is hardly a simple task, especially when confronted with so many different lending options for which your business may or may not qualify.

In an effort to help streamline your search for small business funding, the team at New Bridge Merchant Capital has assembled this free, extended guide to discuss the pros and cons of several common business loan product. By the end, you should have enough valuable information to make an educated decision about how to approach your current funding requirements.

It’s likely that you’re already familiar with some of these funding options. But even if you’ve been exposed to these business lending solutions before, they’re still worth revisiting since this comprehensive review will address several frequently asked questions about leveraging external business funding.

Before we dive into the specifics of how these financing options work, let’s start by looking at some common questions business owners typically ask before financing their projects.


What do my personal and business credit scores look like?


The vast majority of consumer loan products rely on your personal credit or FICO score for establishing creditworthiness and ability to repay the loan. When, for example, you open an unsecured line of credit, as in a revolving credit card, or take a secured auto loan, the lending institution reports your payment history to the following three major credit bureaus:


Most banks and businesses that extend credit convey to the three reporting bureaus your timely payment while penalizing your score if fail to pay within thirty days of your monthly invoice. If you are late an additional thirty days on the account, your credit report will indicate 60 days past due, at which point your FICO score falls even further. This cycle repeats until the creditor finally sells the account to collections.

If you’ve been operating your business for any substantial length of time and have opened a business bank account, you’ll have a business credit score, as well. Your business credit profile serves the same purpose as your personal credit score.

Instead of evaluating your personal payment history, your business score evaluates the status of your business accounts to determine loan eligibility and interest. If you’ve taken out a business line of credit or leveraged invoice factoring or term loans to fund your business in the past, your business credit score aggregates public records, debt utilization, and your’s company’s risk profile to generate a score.

In the US, like your personal FICO score, your business credit score draws from three reporting bureaus. While Equifax and Transunion report business credit history, Experion does not. In its place, lenders rely on Dun and Bradstreet’s decisioning analytics to establish creditworthiness.

Your business and personal credit scores tend to overlap; however, there are a few key differences worth mentioning. While personal credit scores range from anywhere between 300 and 800, your business credit rates you on a scale of 1 to 100. Under either scoring model, the higher scores indicate a more favorable credit profile. Most lenders look for a minimum of 680 for a personal FICO and at least a 75 on your business score before dispersing funds.

Will the approval process involve customers and supply chain partners?


The answer to this question depends on the financing type. Take invoice factoring, for instance, a loan product in which you sell your outstanding invoices to the creditor in exchange for funding. The lender grants the financing based on your unpaid invoices.

Under this business loan program, the approval process will likely involve contact with your buyers. Of course, on the downside, you’re introducing a third party in your customer relationship. Not all business owners feel comfortable with this dynamic -especially since your creditor collects the invoice payments directly from the buyer.

Alternative, short-term working-capital solutions like invoice financing give businesses an effective means of quickly accessing the funds they need to cover their daily operating expenses.

Ultimately, the decision is up to the business owner to involve their customers with their business funding. Despite this element of customer involvement, loan programs like invoice financing can be a reliable way to access cash for the services you’ve already delivered.

How much business funding do I need?


As you engage the business loan approval process, it’s entirely plausible that the lender could agree to grant you more funds than you actually need. This might sound like a desirable problem for businesses, but remember to keep the precise objectives of the financing in focus to avoid drawing too many funds, as this only increases your borrowing costs.

Unless you’re taking out a revolving business line of credit, you’ll only end up paying interest on the funds you fail to use. The additional interest expenses of borrowing too much can quickly add up, impacting your bottom line and making it a challenge to remain profitable and access financing in the future.

What are borrowing costs?


While borrowing to drive business growth comes with countless benefits, this is hardly a good reason to ignore borrowing costs. No matter who you borrow from, you want to ensure you find the most attractive business loan offer.

Make sure to origination fees, prepayment penalties, subscription fees, and any maintenance fees between prospective lenders. This way, you won’t overpay for your loan. The extra fees you’re looking for are any costs -hidden or expressly stated- that are above and beyond the interest payments made.

All fees should be present on your loan disclosure sheet. Beware closing “estimates” or incomplete loan fee disclosures. You’re likely to discover the costs to originate your business will be considerably higher when it comes to sign for the funding.

How does small business funding work?


Small business loans are given to businesses with well-documented cash flows to provide the additional working capital needed to purchase real estate, new equipment, inventory, and day-to-day operating expenses after a financial shortfall.

The US Small Business Administration defines a small business as any organization with 500 employees or fewer. Assuming you meet this criterion and qualify for small business funding, the creditor will proceed to review your qualifications for your preferred loan product.

Like personal, home, and auto loans, every business loan program comes with its own unique qualifying requirements that vary from creditor to creditor. As you begin the process of applying for business funding, you’ll invariably encounter several common business funding options.

Now, let’s take a detailed look at these business lending options in more detail below:

Traditional bank financing


Before the 2008 global financial crisis, traditional banks handled the lion’s share of the national business funding. In previous decades, as a business owner, you were likely to meet with an agent in person at a local branch where you disclose your credit history and financial details before signing the final loan documents and receiving the funding you need to cover your operating costs and continue driving your strategic growth objectives.

Banks have since tightened their credit requirements across the board, but this is especially true concerning newer companies. Aside from the Great Recession of ‘08, the COVID-19 pandemic brought several significant changes to the traditional lending environment. Business loan approvals declined by as much as half by the start of 2021, just one year into the global health crisis.

The year 2020 saw less than 14% of business loan applications approved. Businesses receiving during this time were well-established with strong financials and impeccable business and personal credit ratings. Even if you meet these stringent requirements and are fortunate enough to get through all the paperwork and the dozens of hoops you need to jump through during the loan approval process, you could wait months before receiving funding.

Traditional bank financing offers a few benefits worth noting, however. Assuming you can spare the additional loan processing time, conventional bank financing typically provides the most competitive interest rates and lowest borrower costs.

Generally speaking, traditional lenders can provide businesses with more substantial loan amounts on a fixed monthly payment schedule. They also prefer to build long-term relationships with their customers with their business banking customers.


Online business lenders and term loans


Traditional banks usually offer rate and term financing, but you can also access these same loan products from online business lenders. Online lending laws vary by state. Depending on your location and credit situation, web-based alternative business financiers can present viable business borrowing solutions.

As business loan approvals at traditional banks approved 13% of all business loans during the pandemic, approval rates for online-based alternative creditors granted loans to nearly a quarter of all applicants by the end of 2020.

Online creditors can typically process your file quicker and release the funds with fewer overall requirements than conventional banks and credit unions. Not all online lenders offer term loans, however. If you are searching for a term loan, New Bridge Merchant Capital can provide you with multiple options, and we work on your behalf to ensure you find the right loan product for your business.

When you take out a term business loan, the creditor releases the funding in one lump sum, typically at a fixed rate of interest, while you repay the balance over scheduled installments over the life of the loan. Business term loans can span anywhere from one to five years, with one year being the most common term length.

The primary advantage of business term loans, whether from a traditional bank or online lender, is that they usually fund higher loan amounts than the other funding options, which we’ll touch on in further detail below. Business owners prefer term loans for their larger, one-time investments that are too hefty to pay off in the immediate term.


Other benefits include:

  • A fixed amortization schedule over one to five years
  • Financing for a diverse range of benefits and objectives
  • Establishes business credit
  • May exclude prepayment penalties
  • Enhances future funding eligibility


However, not all term loans waive prepayment penalties, and most require higher credit ratings for approval. Borrowing costs for loan terms spanning one to two years can be steep, and creditors often require a personal guarantee or collateral assets before granting the loan. Like most loans, expect to pay origination and other fees at closing. Always remember to compare these costs against other offers.

Business lines of credit


Business lines of credit are like unsecured consumer credit cards or home equity lines of credit (HELOC). They provide you with a revolving line of capital that you can access when you need it. Unlike term loans, lines of credit give the ability to the outstanding balance down and replenish your existing credit for future use.

For illustration purposes, let’s assume you’re taking out an $80,000 business line of credit. Once approved, unlike a term loan, which is dispersed in one lump sum and paid back over a specified time, you’re entitled to draw funds up $80,000. Likewise, once you draw from your business line of credit, there is no amortization schedule or specified maturity date. You just have to make the minimum monthly payment.

So, in other words, like consumer credit cards, a business line of credit requires companies to pay interest on any outstanding balance they carry. Business owners may qualify for lines of credit with less-than-perfect credit, but they should expect to pay higher interest rates. Business lines of credit lack a fixed repayment schedule, making the loan interest more expensive than term loans, even for those with A credit.

Other details to keep an eye on when applying for a business line of credit are the fees associated with opening and maintaining the line. While you’ll almost always pay interest on the funds you withdraw, unlike term loans. In most cases, your personal and business credit ratings determine how much you can draw from your business line of credit.

In the unlikely event that you can’t repay the balance, depending on whether or not the financing was collateralized, a defaulted credit line could place your business at substantial risk. Like revolving consumer trade lines, it is easy to run up a high balance that can be expensive to repay and take a substantial time to reduce.

Lines of credit help you save on borrowing costs, however. You only pay interest on the funds you use, and you don’t have to originate a new loan to access working capital when you need it.

Merchant cash advances


Businesses that deal substantially in credit card transactions benefit from merchant cash advances the most. Lenders that offer merchant cash advances provide funding to companies in exchange for their future card receipts. Let’s assume the creditor decides to advance you $100,000. The lender will then request a percentage of your monthly credit card sales until you repay the original loan balance.

Typically, merchant cash advances serve as short-term borrowing solutions, and the repayment period rarely exceeds 12 months. Generally speaking, although terms and conditions can vary from bank to bank, the lending institution will aim to recoup around 10% of your monthly credit card sales until as payments for the loan.

The principal upside to merchant cash financing is the short time it takes to process your loan application and disperse the funds. You’ll find this financing option includes less paperwork, there are no collateral requirements, and you can receive the funds in as little as one week. The amount you pay every month is determined by your credit card purchases for the month, so there is no fixed repayment schedule.

High annual percentage interest rates and borrowing costs are among the main drawbacks to merchant cash advances. Funding times for these types of loans are fast, however, and the approval requirements are lax when compared with the funding options listed above.

Merchant cash advances offer a great tool for covering your expenses quickly after a financial shortfall. But keep in mind the repayment period is unfixed, and you’ll have to deal with reduced cash flows until you repay the original loan balance in full.


Small Business Administration loans

Small Business Administration loans


Small Business Administration (SBA) are similar to Federal Housing Authority (FHA) loans in the sense that they’re government back and insured financial instruments. Since the government guarantees the loans and they don’t hold all the risk, lenders are usually amenable to approving businesses with riskier credit profiles, or they may consider funding smaller businesses that lack an extensive professional track, as long as they have two years of seasoning.

SBA loans can be an effective funding solution for business owners with less-than-perfect credit or no credit history at all, but there are a few caveats to SBA loans worth mentioning.

The cost to take out an SBA loan is usually more competitive than the alternatives. The interest rates are low, and the repayment terms are longer than other business financing options. Unfortunately, the SBA loan application process is rather involved, and, again, the loan requires you to have been in business for at least two years.

When you apply for an SBA loan, you should expect several weeks to pass before the final approval. Under most circumstances, the SBA requires you to pledge at least some collateral in exchange for the funds.


Small Business Grants
Small Business Grants

Business grants


Business owners can also access several business grant programs. After doing a bit of legwork, you shouldn’t have too much trouble finding grant money to fund your business if the requirements.

Federal, state, and private agents are potential sources for business grant funds. The best part about grants is they’re not loans, and there’s no requirement to pay them back as long you fulfill the conditions of the grant.


Invoice financing


We touched upon invoice financing in a prior section. But we didn’t want to leave it off the list. To reiterate, lenders grant funding to small businesses that demonstrate unpaid invoices sufficient enough to borrow against their receivables.

If you’re interested in pursuing invoice financing to fund your company, or any of the business financing options discussed above, consider partnering with New Bridge Merchant Capital.

We’re an alternative business financier offering smaller companies like yours fast and secure funding solutions that ensure you have enough working capital on hand to cover your operating expenses and drive organizational growth.

Get started with New Bridge Merchant Capital by submitting your details online. Or, to get a better idea of what you qualify for, connect with one of our senior business finance consultants by phone now by dialing 844-228-0593.