Andrew Wan

A hard money loan is a form of short-term financing for real estate and typically has easier qualification requirements compared to traditional forms of financing. It can also be easier to get approved if you have bad credit. Unlike traditional loans, hard money lenders can issue financing on properties that need repairs. These flexibilities, however,…

The debt service coverage ratio (DSCR), or debt coverage ratio for short, is a financial measure of a company’s ability to pay debts from its cash flow. Here is the DSCR formula: DSCR = Annual Net Operating Income Annual Debt Obligations In general, a DSCR of 1.25 or greater is viewed favorably when it comes…

A business loan cosigner is an individual who promises to make payments on the loan if the other borrower(s) are unable to do so. Getting a cosigner can improve your odds of landing a loan approval. However, you should be aware of the risks involved with doing this. For instance, missing a payment on a…

The Small Business Administration (SBA) offers a line of credit program where funds can be used to cover temporary, short-term, and cyclical working capital needs. Some examples of what an SBA line of credit can be used for include inventory, labor costs, administrative expenses, and funds to help with the rehabilitation or repair of commercial…

As a general rule of thumb, business loans are the best option if your company needs funding. This is because merchant cash advances (MCAs) are an expensive form of credit that we typically recommend only as a last resort. However, both MCAs and business loans can be beneficial if used properly. Funds from each of…

As a business owner, it’s possible to use a home equity loan (HELOAN) for business purposes. Although you’ll need to own a home with sufficient equity, it may be more suitable compared to a traditional business loan because its qualification requirements can be easier to satisfy. You can get a home equity business loan by…

Accounts receivable (A/R) financing, sometimes referred to as invoice financing, can provide your business with funds if you have unpaid invoices you’ve issued to customers. This can be helpful for companies that have a large amount of earned revenue that is yet to be received. It’s usually possible to get up to $10 million in…

If you’re looking to acquire commercial real estate (CRE), buying and leasing are two options you can consider: Buying real estate typically requires more cash upfront but it allows you to build equity, has more flexibility in making modifications to the property, and has fewer long-term variable costs. Leasing real estate requires less upfront money,…

A letter of credit is issued by a bank or other financial institution as a way to guarantee payment in the event the customer does not pay. This can be especially useful when conducting business internationally or when making large complex purchases where failure to receive payment could result in cash flow issues. Companies that…

If you’re applying for a business loan, lenders can check both your personal and business credit scores: Bad personal credit is usually defined as having either a FICO credit score below 580 or a VantageScore of 600 or less. Bad business credit is often defined as having a PAYDEX score below 50, a FICO SBSS…

SBA Express loans are government-backed loans issued by individual lenders and can provide up to $500,000 in funding, usually with a 10-year repayment term. Funding speeds are much faster compared to other types of loans backed by the Small Business Administration (SBA), typically around one month, and this is because lenders often have reduced documentation…

Liquidity risk is a company’s ability to meet its short-term debt obligations. It is generally lower when you can convert assets into cash quickly and is typically higher if that is a process that will take a longer time. Liquidity risk for business owners is an important concept to be aware of as it can…