Unsecured Loan Requirement Guidelines

535 views
469 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
535
On SlideShare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Unsecured Loan Requirement Guidelines

  1. 1. Enterprise ProgramFUNDING • $50,000 -$250,000 in unsecured credit lines (business checking) • Our Unsecured Business Finance Program (Business Credit Cards) is an option for clients who do not qualify for Business Lines of Credit. • Includes automatic qualification for equipment financing; subject to leasing program eligibility requirementsCOSTS / FEES • $0 to start the program –No application fees -NO RISK! Following preliminary underwriting approval, we require a $3,000 advance on your fee which is 100% refundable. • Client pays 8% of all approved funding up to the first $150,000 and 7% on funding above $150,000; fees can be paid from new funding obtained.APR ON FUNDING • Prime rate + 2 – 6%; Rates vary based on market changes, industry code, state of incorporation, credit profile, etc.OWNER / BUSINESS REQUIREMENTSOWNER: At least one owner meeting all of the following requirements: • 600 + FICO Score (True Credit Score > 700) Enrollment in True Credit during application review and funding period is required. • 20% ownership in the corporation applying for credit; all owners with at least 20% ownership must provide an application. • No derogatory credit marks in the past 12 months* • No judgments or liens in unpaid status* • No bankruptcies in past 5 years* (for clients residing in DE, MD, NJ, NY, PA, FL, VA, CT, NH, MA, RI, IL, IN, KY, MI, MO, OH, WI, WV and Wash DC). No bankruptcies at all in other states. • Owner must maintain a clean profile through the program. This includes avoiding mortgage changes and additional car loans. *Assistance with credit repair is available through a 3rd party provider BUSINESS:Page 1 of 10 (Brenda Lee - BLee@Cprofit.com, 626 606 1129)
  2. 2. • Annual gross revenue must be $350,000 on prior year tax return; interim financials are helpful in establishing increased sales but cannot be used as a substitute for meeting this requirement. • Two or more years time in business with two or more years most recent business tax returns. Interim financials are helpful in identifying upward sales trends and profit trends but cannot be used as a substitute for tax returns, which have been filed. • Clean business history with no judgments or unpaid (late or behind in payments) loans.KEY FEATURES & BENEFITS  Compound Profit specializes in helping our clients get the funding they need. Our funders have helped thousands of companies achieve their funding objectives. From personal to business credit improvement and from loans to lines of credit and even government backed SBA loans, our clients depend on our expertise and associations with numerous lenders, to get funding fast and at the best rates. Our team constantly tracks a wide and ever-changing range of lending guidelines, amount of funding available per lender, regional and industry specific lenders, special offers and promotions (such as 0% interest rates). We know who the “relationship” funders are who are willing to work with us and our clients, especially when times get tough. This gives us a distinct advantage over working alone.  Qualifying businesses can get large business checking lines of credit ($50 - $200k each), exceeding funding available through our Unecured Business Finance Program (Business Credit Card) even with multiple credit partners.  An individual business can qualify for up to $250k per funder, (subject to the funding limits connected with either annual sales or annual gross profits). In addition, depending on the strength of the file, up to 3 funders could approve lines up to $250k; greatly increasing the total amount of financing that can be achieved.  Businesses can qualify for business lines of credit with an owner having a lower FICO score than required for our Unsecured Business Finance Program (Business Credit Cards) since the focus of the qualification and approval process is on business history, particularly what is seen in business tax returns.  Funding can be used for any business purpose, including payroll, inventory, equipment, and even operating capital.Page 2 of 10 (Brenda Lee - BLee@Cprofit.com, 626 606 1129)
  3. 3.  Unsecured credit lines available through this program do not require any personal assets or personal property for collateral / security.  Typically, business credit lines require payment of interest only, on a monthly basis. Compares favorably to fixed term loans offering no flexibility in monthly payments.  Clients can deposit however much money they want to use directly in to their business checking account at any time and only pay principal and interest on the amount of the credit line used.  Interest rates on business lines of credit are "institutional level" rates ranging from 2 - 6% plus prime, depending on the credit and financial profile of the owner (guarantor) / business.  Our Business Lines of Credit Program also can help improve a client’s personal credit profile and score. Lots of business owners take on personal debt to grow their businesses (equipment, legal, licenses, inventory, rent, payroll, etc.). A personal loan is secured to assets, in many cases, to the business owner’s personal residence. This sounds great when the business is doing well, but becomes very scary if the economy dips. With our funding, clients can utilize funds available in their new business checking account to pay down business related personal debt. Again, doing this improves their personal credit and it actually helps build their business credit profile, because business debt is intended for business purposes and looked upon favorably by funders.  Service charges and interest expense are a tax write off, saving our clients significant tax expense which helps cover service charges for funding. This exemplifies the primary difference between personal and corporate funding and there are many benefits to this; the fact that our clients can leverage this money to build their business while writing off any interest expenses really helps justify the costs. The alternative is to use other types of funding that are paid for with money earned after tax, which increase costs significantly.  Having a few lines of credit instead of just one business line is a sound strategy. Reasons include: It helps build the strength of your business credit faster and, by having multiple lines funders are reporting under the business credit file, each funder sees that you have credit lines with others who they compete with so they will be more likely to work with you because they don’t want to lose your business.Page 3 of 10 (Brenda Lee - BLee@Cprofit.com, 626 606 1129)
  4. 4.  Following review and processing of your application, we compile a list of funders that will approve a given application and which won’t. Furthermore, our team has direct relationships with the underwriters at these funders to determine how much financing they will offer – within a certain range. This allows us to determine which funders to stay away from and helps minimize the number of credit inquiries to only the funders that will approve a client for business financing. The end result is we maximize the amount of credit we obtain for our clients and their business. This process helps us expedite the funding process.  Clients are free to pay our fee with their new credit lines.  Fees are not due until invoicing is complete by the funder which does not occur until each funding is complete and physically in the hands of and ready for use by our clients.  While most of our clients want to realize the benefits of using credit lines to strengthen their business credit, for those clients who cannot qualify due to issues with their personal credit, we can refer you to a specialist to assist with credit repair for very reasonable fees. Fees are among the most competitive in the industry and all clients receive a no cost, no obligation consultation. Above all, if agree upon improvement objectives are not met, there is no charge for the service.  Fees are only 8% on the first $150k and only 7% on lines that exceed $150k; hence, these fees represent an excellent value in relation to the total amount of funding obtained.  Business lines of credit require no added fees for cash out or balance transfers from personal credit cards, making these extremely cost efficient for businesses that need access to cash.  The funding process is fast. Once you return the completed contract funding is generally completed within 4 - 6 weeks.Page 4 of 10 (Brenda Lee - BLee@Cprofit.com, 626 606 1129)
  5. 5. ADDITIONAL GUIDELINES: • Credit line amount, per funder, will not exceed 10% of annual sales if cost of sales is limited to labor (generally service only businesses). • Credit line amount, per funder, will not exceed 10% of annual gross profit (sales less cost of goods sold) if cost of goods includes labor and other materials and/or goods (generally product manufacturing or retail / wholesale sales company). • Revenue, ownership and time in business criteria must be met. • Personal credit criteria must be met. Necessary credit repair should, ideally, be completed prior to application. • Business owner(s) must document sufficient income to service personal debt and not create risk that a need for increased income will affect future business cash flow. A general rule is that Income must cover $12k per adult in household and $6k per dependent, plus monthly payments associated with personal debt. Shortfalls are deducted from business profit for analysis purposes. • Business has no existing debt which includes UCC filings typically associated with Accts Rec.; Inventory; Other Lines of Credit, SBA loans, etc. Some debt may be permissible but depends on many other factors concerning business performance and overall ability to service new debt. Unsecured Business credit card debt is not a factor. • Business must show enough positive cash flow and revenue to service new and existing debt. In some cases a credit line large enough to service new debt and existing debt may be provided to allow refinancing of existing debt (effectively removes debt with UCC filings from other lenders). Cash flow / revenue forecasts and business plans are not considered. • Business must be profitable in prior year and ytd. • Business must not show decline in sales (ytd trend vs prior year); in some cases a decline in 2010 vs. 2009 may affect eligibility. Sales forecasts are not considered. • Collateral is not required for an unsecured line of credit and therefore is not a factor. Consideration of secured finance alternative requiring collateral is at the sole discretion of the funder, and if proposed, can be considered provided the applicant is receptive. All unsecured business lines of credit do involve UCC filings as described previously. • Business must not be in restricted industry (construction, residential real estate investor, restaurant, automotive dealership, non-profit).Page 5 of 10 (Brenda Lee - BLee@Cprofit.com, 626 606 1129)
  6. 6. • Individuals seeking to acquire an existing business (meeting all requirements) should have previous experience in the industry and ideally experience working for the firm being acquired. APPLICATION – ADDITIONAL REQUIRED DOCUMENTS  Completed Enterprise Program application (for each owner 20% or greater)  2 years most recent personal tax returns (each owner on application) *  2 years most recent business tax returns*  Current year interim financials (income / expense statement and balance sheet)  Articles of Incorporation identifying ownership  Organization and fictitious name statement NOTE: Personal and business tax returns must be currently filed. Extensions for the latest year tax returns are not acceptable and will automatically disqualify the client until the returns are filed.Page 6 of 10 (Brenda Lee - BLee@Cprofit.com, 626 606 1129)
  7. 7. Unsecured Business Finance ProgramFUNDING • $10,000 -$150,000 in unsecured credit lines (business and / or personal credit cards) • Personal Credit Cards are an option for clients who do not qualify for Business Credit Cards • Includes automatic qualification for equipment financing; subject to leasing program eligibility requirements • Program available for Canadian-based businesses and guarantorsCOSTS / FEES • $0 to start the program –NO RISK! • Client pays 12% of all approved funding; fees can be charged to new cards if desiredAPR ON FUNDING • Business Credit Cards = 7 – 20% depending on client credit profile, banks issuing the cards and location of the client and / or bankBUSINESS REQUIREMENTS • New corporations and Startups are OK (Franchises!)GUARANTOR REQUIREMENTSNeed 1 Guarantor With: • 680 + Vantage Score (FICO > 580) • No late payments and / or other derogatory marks in past 6 months • No judgments or collections in unpaid status • No bankruptcies • At least 1 bank card with 3 yr. history or $3k limit; if no car loan or mortgage 2 bank cards needed • Guarantor must maintain clean profile throughout the program (avoiding mortgage changes and new loans during the funding process )Page 7 of 10 (Brenda Lee - BLee@Cprofit.com, 626 606 1129)
  8. 8. KEY FEATURES & BENEFITS • Compound Profit specializes in helping our clients get the funding they need. Our funders have helped thousands of companies achieve their funding objectives. From personal to business credit improvement and from loans to lines of credit and even government backed SBA loans, our clients depend on our expertise and associations with numerous lenders, to get funding fast and at the best rates. Our team constantly tracks a wide and ever-changing range of lending guidelines, amount of funding available per lender, regional and industry specific lenders, special offers and promotions (such as 0% interest rates). We know who the “relationship” banks are who are willing to work with us and our clients when times get tough. This gives us a distinct advantage over working alone. • Available to all business entities including: sole proprietorships (not incorporated, with DBA filed), C corps, S corps, LLCs; DBA‘s only are OK. • Applicant does not need an existing business to qualify. Funding is available to start-up and franchise businesses. • Most businesses which don’t qualify for traditional loans due to poor credit, no financials or bad years from the current economic climate, can still get up to $150,000 using their personal credit alone. And these businesses can double or triple this funding by adding additional guarantors. Details are available in a separate document we can provide for reference and application processes are no different than for any applicant. • Funding can be used for any business purpose, including payroll, inventory, equipment, and even operating capital. • UBF can build the strength of a client’s business credit score for future expansion such as large cash credit lines and SBA loans. • Unsecured credit lines available through this program do not require an assets or personal property for collateral / security. • Another great benefit to this type of funding is the ability to improve a client’s personal credit profile and score. Lots of business owners take on personal debt to grow their businesses (rent, payroll, etc.). A personal loan is secured to assets, in many cases, to the business owner’s personal residence. This sounds great when the business is doing well, but becomes very scary if the economy dips. With our funding, clients can transfer personal debt (balance transfers) that requires no collateral at all. Again, doing this improves their personal credit and it actually helps build their business credit profile, because business debt is intended for business purposes and looked upon favorably by banks. Plus, banks issuing cards are always happy to see clients moving balances from other banks to their bank. So transferring personal debt to business debtPage 8 of 10 (Brenda Lee - BLee@Cprofit.com, 626 606 1129)
  9. 9. will strengthen both their personal and business profiles and credit ratings dramatically. So now they have less personal debt and a strong business credit profile.  Service charges and interest expense are a tax write off, saving our clients significant tax expense which helps cover service charges for funding. This exemplifies the primary difference between personal and corporate funding and there are many benefits to this; the fact that our clients can leverage this money to build their business while writing off any interest expenses really helps justify the costs. The alternative is to use other types of funding that are paid for with money earned after tax, which increase costs significantly.  Clients have the flexibility to make payments that are no more than the low minimum monthly payment banks require. • Many of our UBF program banks will offer a 0 - 3 % APR for 6 months to 1 year; significantly lowering the cost of this capital and increasing the attractiveness of “balance transfers” from personal credit cards. • Having a few lines of credit instead of just one business line is a sound strategy. Reasons include: It helps build the strength of your business credit faster and, by having multiple lines banks are reporting under the business credit file you will be able to negotiate every 6 months or so to lower your interest rates and increase the limits on your lines…….each bank sees that you have credit lines with other banks who they compete with so they will be more likely to work with you because they don’t want to lose your business to other banks. • The funding process is fast. Once you return the completed contract funding is generally completed within 2 – 3 weeks. • During the creation of our client proposal, our funder compiles a list of banks that will approve a given application and which banks won’t. Furthermore, our funder has a direct relationship with the underwriters at these banks to determine how much funding they will offer – within a certain range. This allows us to determine which banks to stay away from and limits the number of credit inquiries to only the banks that will approve a client for business funding. The end result is we maximize the amount of credit we obtain for our clients and their business. This process helps us increase the accuracy the proposal we provide all clients and helps expedite the funding process. • Clients are free to pay service charges associated with funding with newly obtained credit cards. Arrangements are made directly with our funder’s customer service department upon receivingPage 9 of 10 (Brenda Lee - BLee@Cprofit.com, 626 606 1129)
  10. 10. funding from each bank. Charges are not due until invoicing is complete by the funder which does not occur until each bank funding is complete. One funder will request an existing credit card which may be charged for fees associated with the initial credit lines approved and which occur before the new cards are actually received. Once new cards are received they can be used for payment of fees. • A “cash-out” option is available to assist with transactions that cannot be supported via credit cards. Details are available in a separate document we can provide for reference and arrangements can be planned with our funder at any time the client desires. Fees charged by the funder are considerably less than prevailing fees charged by banks issuing credit cards. • All applicants, including those with credit scores too-low-to- qualify can utilize a qualifying “credit partner” to achieve funding goals. Credit partners can be existing owners, a friend, spouse or family member. Again, a separate document is available to describe this simple process, as well as procedures for eventual removal of the partner as guarantor. • While most of our clients want to realize the benefits of using cards to strengthen their business credit, for those clients who cannot qualify, our resources enable us to refer you to a trusted partner who specializes in credit repair for very reasonable fees and payment terms. These clients also have the option of selecting a credit partner. Another option is our Personal Finance Program, which is an unsecured program for many clients. These cards can provide badly needed funding and can, depending on the client’s credit profile, include up to 2 business credit cards. Our fee for this service is the same and activity on these cards does report to your personal credit. Many client’s in this situation take advantage of this very strong option and then continue to work with to improve their personal credit to the level needed for funding in additional business credit cards or other business funding programs we offer. • Selected funders offer Unsecured, low interest, fixed APR term loans which can help clients convert business credit lines (credit cards issued by our funder) in to a structured term loan. These loans can reduce long term APRs once credit card promotional rates have expired. Additional information is available on request. • Compound Profit also has a direct relationship with a major and reputable credit repair firm. They specialize in helping clients removing derogatory records which can increase credit scores. This tool can assist most all clients in improving their personal credit scores to qualify for funding and / or increased funding. Fees are among the most competitive in the industry and all clients receive a no cost, no obligation consultation. Above all, if your credit improvement objectives are not met, there is no charge for the service.Page 10 of 10 (Brenda Lee - BLee@Cprofit.com, 626 606 1129)

×