Cliffmoor Funding Group answers business loan questions from Pine Bluff, Arkansas owners: whether a loan needs a down payment, how much a business can borrow, using a line of credit for payroll, and how a loan payment is calculated, with an illustrated payment example.
Can you get a business loan without putting money down?
You can get some business funding without putting money down. Working capital loans and lines of credit are not tied to a purchase price, so there is nothing to put down. Some equipment financing covers the full price because the equipment secures it. Purchases of a business or real estate are where partners expect money down.
The six options page shows which structures tie to a purchase and which do not.
How much can I borrow for a small business loan?
How much you can borrow for a small business loan is set by each partner from your deposits, revenue, existing debt, credit and the purpose. A rough self-check: the new payment, added to existing payments, should fit inside your slowest month of deposits with room left over. The request form asks for a requested amount range and an annual revenue range so a partner starts from realistic figures.
Can I use business line of credit for payroll?
You can use a business line of credit for payroll, as long as the draws are repaid when receivables come in. A line that stays fully drawn for months to meet payroll is a sign the gap is not temporary, and a term loan or a change in the business's cash cycle may serve better. The line of credit page explains draws and renewals.
How much is a business loan payment?
A business loan payment depends on the amount, the rate, the term and the payment frequency. Equal monthly payments on a term loan include interest on the declining balance plus principal.
Illustration only, invented figures: $75,000 at an 11% annual rate over 36 months is about $2,455 a month, $88,395 in total and $13,395 in interest (our arithmetic). The calculator runs the same math for any figures.
Do business loans require down payment?
Business loans require a down payment when the money buys something specific: a business, real estate, sometimes equipment. The partner sets the amount. Loans for operating needs, such as working capital, have no purchase price to put money down against.
Does a business loan require a down payment?
Whether a business loan requires a down payment also depends on collateral. Where the purchased asset holds its value, as some equipment does, a partner may fund the full price. Where it does not, as with a build-out or goodwill in a business purchase, the buyer's own money shares the risk. Ask each partner for its requirement in writing.
Other questions? Call (870) 218-9619, read how a request moves, or use the contact page.
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