How to Secure Startup Business Funding for Your New Company

Preparing your business for capital financing

Small companies need and use the most capital during their initial launch, just like a jet engine uses most of its fuel getting a plane airborne. The government recognizes how much our nation depends on small businesses and in response to this every growing need, created the Small Business Administration (SBA) to help entrepreneurs. The SBA loan program does not actually fund the startup business, but will guarantee a portion of the loan from an approved financial lending institution.

US Business Finance Corp has also successfully helped new companies secure first year start-up business funding, through alternative funding solutions. Our programs are easy to follow and do not require extensive paperwork and all kinds of corporate scrutiny.  Our program benefits include: no personal guarantee, no business lien, credit scores from the 500's and money in your business checking account in about 10 business days.

The SBA and the approved financial lending institutions have created a strict set of guidelines to be reviewed through, and sometimes prior to, the SBA funding process.  The "Five C's" of funding are described below to share with you, some of the higher level underwriting considerations.

The prime element for any loan is Credit. What is your credit history and current credit score? In today's lending market, a credit score needs to be in the 720 to 740 range to obtain the loans with the best interest.

The next area is your company's Capacity. Do you have the cash flow and production or servicing ability that will absorb the loan payments without overly impacting cash flow?

What is the Character of your company's ownership and management team? Having an experienced management team and/or a board of directors with an in-depth knowledge of your company's market, will reassure the lending institution. Lining up talent that shows you have the necessary team to solve problems, indentify and follow through on market opportunities, is especially critical with SBA loans.

The fourth C is Collateral. What are the assets that are available to guarantee the loan's repayment? This takes care of the lender's "worse case" scenario worries.

If your company does not have the necessary collateral, one solution to consider will be our US Business Finance Corp Business Cash Advance. Our Business Cash Advance is a product, by definition, a pledge against future credit card processing receipts in exchange for cash today.  These funds can be used any way you see necessary to run your business. For example: buy equipment, expand and renovate your current location, pay back taxes or rent.

One of many benefits to our program is building your business equity through new equipment purchases, and a short re-payment period of this new collateral. As a result of this short repayment period, you can own equipment free and clear in as little as six months. With additional marketing, you can build up sales and potentially add a solid accounts receivables history. Both the equipment and cash receivables are assets that can be used as collateral for future loans or lines of credit.

The fifth "C" is your Cash Flow. Often when reviewing business plans the two key pass/fail areas are the management team and the current and projected cash flow. With a steady cash flow financial lenders are more reassured that the lender will not need to solely depend on the collateral.

With your five C's in place, you can choose which road to follow, SBA or US Business Finance Corp' cash advance solution.  Should your capital requirements be greater than $100,000 and repayment terms are greater than a year, US Business Finance Corp. will assist you in locating a local SBA office to complete your funding request.  However, many of our clients will also secure a Business Cash Advance from US Business Finance Corp. as part of their funding strategy; we look forward to your call!