Sale-Lease Back Financing

Sale-leaseback transactions allow businesses to use their equipment to raise capital while retaining possession of their business equipment. This is done by selling some, or all of their business equipment that is owned free and clear, to a leasing company. The business receives cash for the asset sale and then signs a lease agreement for that same asset so the business (lessee) can continue to use it. At the end of the lease contract, ownership of the asset is transferred back to the lessee. 


Asset-Based Financing

An asset based loan (ABL) is a generic term that describes a type of business financing that is secured by company assets. These loans are usually offered by non-bank lenders that will not require the borrower to have strong credit as part of their loan decision. ABL companies make loans based primarily, or entirely, on the value of the business’ assets. This is a valuable option for those where the business, or business owners, have less than perfect credit. 

 
Commercial Property Purchase

A Commercial Property loan is a debt secured by real estate that is usually not zoned for residential use. The property is used solely for business purposes (i.e., restaurants) or a combination of residential and commercial use such as a high rise apartment building with retail stores on the ground floor (mixed-use). Commercial buildings can be owner occupied, single tenant or multi-tenant and come in many varieties such as retail centers, parking structures, office complexes, hotels and apartment buildings with 5 or more units. 


Accounts Receivable

Accounts Receivable Financing allows a business owner to accelerate cash flow by borrowing against their open invoices. The lender secures the debt by placing a lien against the business’ A/R as well as other business assets. In return the business owner receives cash in advance of payments due from their customers. 


Merchant Financing

This type of small business financing is characterized by shorter payment terms (up to 24 months). The money that is borrowed can be used for a wide variety of business expenses and is normally repaid through small payments subtracted from the business bank accounts each day. This is often easier for the business owner to manage compared to the larger monthly payments and longer payment terms associated with traditional bank loans. Merchant finance companies can vary greatly in their qualifying criteria. Some look for stronger, more established businesses, while others will work with companies as new as a few months in business. 

 
Business Loans

A generic term used to describe a type of loan where 100% of the loan proceeds are to be used for business or commercial purposes. Business loans can be used for many purposes including start-up financing, expansion or to buy an existing business. These loans are usually secured through a combination of business and personal assets, but can also be unsecured depending on the loan amount and business credit. The repayment terms are usually 1-5 years or more based on the businesses cash flow and profitability, although some loans can be made for longer periods

 
Equipment Leases

An Equipment Lease is a long-term rental agreement for commercial equipment as defined by Section 38 of IRS code. Leases can be structured on almost any type of equipment, both new and used. Because the initial out of pocket cost to lease equipment is normally much less than buying it, this is an extremely attractive financing option for many business owners. Depending on how the lease is structured, the business owner (lessee) will have the ability to purchase the equipment at the end of the lease term, or return the equipment. 


Purchase Order Financing

“PO” financing is a non-credit sensitive form of financing that is normally used in the manufacturing sector when a business has insufficient cash on hand to fill their customer orders. A PO finance company provides the manufacturer with a cash advance based on a percentage of the value of the goods ordered by their customer. The business then uses the cash to cover expenses related to fulfilling that order. The PO finance company is normally repaid when the business’ customer pays for the products they ordered. The finance company subtracts the amount borrowed plus their fees and interest, then passes the remainder on to the borrower. PO financing provides a business with working capital to pay suppliers and enables them to execute orders for customers where they might otherwise have to decline the order. 

 
Lines of Credit

LOC’s come in different varieties but usually is a short-term “revolving credit” instrument issued by a bank or other non-bank financial institutions. The term “revolving” indicates that the business has an established credit limit that it can use repeatedly. The business can draw money off that credit line to cover expenses but must repay some, or all of the amount borrowed each month in order to keep the line open. Credit lines can be secured by a lien against business assets, real estate or even unsecured depending on the overall strength of the business. This type of financing is sometimes called a “credit line”, “bank line” or a “revolver”. 

 
Factoring

Factoring is a term used to describe the discounted sale of Commercial Accounts Receivable. In a typical factoring transaction a business sells its accounts receivable (invoices) to a third party (factoring company) for less than their actual value. This gives the business a large portion of the invoice value now to pay operating expenses, without having to wait the normal 30 days for their customer to pay the invoice. The factoring company then collects payment from the business customers directly. Factoring is normally not credit sensitive so it provides brokers with another opportunity to help start-up businesses or those with less than perfect credi

 
SBA Loans

The SBA or Small Business Administration guarantees loans for businesses in certain industries that meet the SBA lending criteria. These loans are made by banks or other commercial lending institutions and not by the SBA directly. If a business meets the lending criteria the SBA can guarantee as much as 80 percent of the amount the business borrows. Lenders look much more favorably on this type of loan request because they have significantly less exposure if the business defaults on the loan. There a number of different SBA programs but the two major categories are called “7-A” and “504”. Loans funded under the 7-A program can be used for many different purposes including start-up capital, working capital, franchise purchases, equipment financing, etc. Loans made under the 504 program are much larger and designed to help businesses purchase owner-occupied commercial real estate. 

 
Working Capital

A working capital loan is a generic term used to describe financing offered to a business for the purpose of covering day-to-day operating expenses. These are normally shorter term loans secured by a lien against business assets, but can also be unsecured. Working capital loans are frequently used to cash flow shortages caused by unanticipated expenses or by “seasonal” business to cover expenses in their slow period.