Frequently Asked Questions About Business Funding

What types of business funding are available?

Businesses have access to various funding options, each designed for different needs:

• Traditional Bank Loans: Long-term financing with fixed payments
• Merchant Cash Advances: Flexible funding based on future sales
• Equipment Financing: Specific funding for equipment purchases
• Business Lines of Credit: Revolving credit for ongoing needs
• SBA Loans: Government-backed loans with favorable terms

How quickly can I get business funding?

Funding speed varies by option:

• Merchant Cash Advances: 1-2 business days
• Online Lenders: 2-5 business days
• Traditional Banks: 30-90 days
• SBA Loans: 60-90 days

What documents are typically required?

Common documentation requirements include:

• Bank statements (3-12 months)
• Tax returns (1-3 years)
• Financial statements
• Business licenses
• Credit card processing statements (for MCAs)

What credit score do I need for business funding?

Credit requirements vary by funding type:

• Traditional Bank Loans: Usually 680+
• SBA Loans: Typically 640+
• Alternative Funding: Can be as low as 500
• Merchant Cash Advances: Focus more on revenue than credit

How are repayment terms structured?

Different funding options offer various repayment structures:

• Traditional Loans: Fixed monthly payments
• MCAs: Percentage of daily sales
• Lines of Credit: Pay interest only on used amount
• Equipment Financing: Fixed payments until equipment is paid off

What happens if I miss a payment?

Consequences vary by funding type:

• Traditional Loans: Late fees and potential default
• MCAs: Payments adjust with sales volume
• Lines of Credit: Late fees and possible rate increases
• Best practice: Communicate with provider if difficulties arise

Can I get funding with a new business?

Options are available for businesses at different stages:

• New businesses: Alternative funding, equipment financing
• 6+ months: Merchant cash advances, short-term loans
• 2+ years: Traditional bank loans, SBA loans
• Focus on revenue and growth potential for newer businesses