Frequently Asked Questions

We get lots of queries regarding the services we provide to our customers so down here we are going to give answers to all your questions.

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Here is the list of some frequently asked questions about loans, factoring, line of credit etc. you can get answers for your queries here.

Q. What is Hard Money Loan?

Hard money loans are primarily utilized for real estate transactions and are money from an individual or company and not a bank. It is usually taken for a short time. Terms for loan can often be negotiated between the lender and borrower.

Q. What is an SBA loan?

An SBA loan is guaranteed by the U.S. Small Business Administration. It is a government agency that offers financial programs to small businesses.

Q. What is a commercial loan?

A commercial loan is done between a business and a bank, used to fund operating costs and capital expenditures. Companies generally have to provide financial statements to prove their ability to repay. These are short term loans These can be rolled or renewed to extend the life of loan.

Q. What activities qualify for an SBA loan?

The activities like business acquisitions, expansions and start-ups are common purpose for SBA loans. It can also be used to fund an owner-occupied real estate purchase, constructions, equipments, furniture, and tenant/leasehold improvements or to provide working capital.

Q. How do I qualify for merchant cash advance?
Approval for merchant cash advance is based on your monthly credit card sales. Your profit margin is checked instead of your credit. The portion of your profit is automatically applied to your debt every month. The lender asks for verifiable proof from you so that you can honour the payment agreement.
Q. Should I get a business loan or line of credit?

Business loan present you with one time lump sum whereas business line of credit give you an ongoing pool of money. From business loan you will owe interest on the full amount of money while in business line of credit you only pay the interest on the money you use.

Q. What is invoice factoring?

It is the selling of invoices for immediate cash without taking an additional debt or diluting equity.

Q. When do I receive the money after selling then invoices?

Then factor usually submits payments for all invoice within 24-48 hrs of receipt though it could take longer, Always read the policies and guidelines for each factoring company.

Q. What is a business loan?

It is a 1-3 years unsecured loan given by banks, NBFC’s (Non banking finance companies) without asking for any collateral, guarantor of any assets. This type of borrowing is eligible for the entitles like proprietorship, partnership, private limited or public limited company.

Q. What is short term business loan?
This loan is given for the period of few months to the year which can be from the bank or from any financial institution just to meet the cash need.
Q. What is financing guide?
Financing provides the funds to the businesses for the daily operations, activities, and projects they are thinking of investing in.
Q. What is microloan?
Microloans are so small that banks do not take the pain to lender it. So for microloans there are micro lenders or non profit organizations are available.
Q. What is domestic factoring?
In this the factoring comes from the transactions which are related to the domestic sales. In which every party having the transaction is in same country.
Q. What is business line of credit?

It is revolving loan that allows access to a fixed amount of capital, which is used by small business to meet their short-term needs. It can be used to finance short term working capital requirements, like- purchasing inventory.

Q. What type of property do hard money lenders lend on?

They can lend on any type of property such as single family residential, multi-family residential, industrial, land, retail and office buildings. Some can lend on owner-occupied residencies but others don’t due to extra regulations required to fund these loans.

Q. What type of industries can use invoice factoring?

Any business in any industry can be factored. Some of the most common industries factored are- freight and transportation, staffing and payroll, construction, oil, gas and energy, textile and garments, agriculture, government contracting, information technology nad telecom.

Q. Is factoring similar to bank loan?

Factoring and bank loans are different. Loans are issued by banks to established companies and must be paid back whereas in factoring advanced on existing receivables and is offered based on then credit of the company being invoiced.

Q. What is hard money lenders term?

Generally hard money lender term is 12 months, but longer terms of 3-4 years are also available depending on the borrower and lender.

Q. What is merchant cash advance?

It is not considered as a loan instead it is an advance in cash which is available only on the basis of the credit sales a business do.

Q. Why there is the need of financial management?

Financial management is need just because it generates money, manages the cash flow, and also helps to strategize the funding.