Financing

Choosing the best Small Business Administration (SBA) lender can be a challenge as there are over 3,000 approved lenders for SBA loans in the United States. These lenders range from community banks to online lenders to large banks. We’ve reviewed the largest SBA 7(a) lenders based on the amount borrowed by their customers while considering the types of businesses they may specialize in lending to. SmartBiz is one of our recommended SBA loan providers. offers a streamlined application process and can match you with the SBA lender that will best meet your needs. It offers up to $350,000 for working capital and up to $5 million for commercial real estate, with funding in half the time of traditional banks. You can prequalify online in just a few minutes. Top 10 SBA Lenders by Funding Volume These SBA lenders are the largest by dollar volume in the last federal fiscal year (FY 2021), which ended September 30, 2021. We also provided the average amount of each SBA loan approved, the average interest rate, and repayment term over the past fiscal year. Eight lenders issued more than $500 million in SBA 7(a) loans during FY 2021 and an additional 80 lenders issued at least $100 million. While the list above reflects the 10 largest SBA lenders by dollar volume, picking the best SBA lender to work with to address your financing needs will depend on many factors. It’s important to find a lender that’s making loans in your geographic area, understands your industry, and can finance the amount you need. 1. Live Oak Bank is an SBA preferred lender known for its efficiency in lending to small business owners nationwide and for having specific industry expertise, such as franchise restaurants and self-storage facilities. This expertise can come in handy for niche industries that aren’t as well-known due to the knowledge the lender can have in that particular industry. Live Oak has a mixed customer service record but does have an A+ ranking from the Better Business Bureau. How to Apply for Live Oak Banking Company SBA Loans Live Oak Bank’s application is online, with a team of SBA lending experts available to provide guidance and support should you need it. A loan proposal may be available as soon as 24 hours after submitting all necessary documentation. While specific funding speeds aren’t available, up to 90 days is a reasonable expectation. 2. Huntington National Bank issued the most SBA loans nationally and came in second in dollars lent during the last fiscal year. This is impressive, considering it only offers SBA lending in 11 states, mostly in the Midwest but also in Florida and Colorado. Huntington has a large SBA team that’s dedicated to servicing many different businesses but highlights manufacturing, franchises, and restaurants. Most customer service reviews regarding their SBA lending are positive. How to Apply for Huntington National Bank SBA Loans Huntington National Bank provides SBA loans from $5,000 to $5 million. If you’re in an area serviced by Huntington National Bank, you can begin the application process by reaching out to an SBA specialist in your area. Huntington’s underwriting and approval timelines are similar to many SBA lenders, generally funding in 90 days. 3. Newtek Small Business Finance is an SBA preferred lender that works in all 50 states, with a primary focus on standard SBA 7(a) loans. While Newtek provides financing to a wide range of industries, some of its specialties include manufacturing and dental practices. Customer service reviews of Newtek over the past year have generally not been positive, particularly when it comes to their handling of Paycheck Protection Program (PPP) loans. How to Apply for Newtek Small Business Finance SBA Loans Interested applicants will start the Newtek SBA loan application process by submitting a form with basic information about you and your business. You’ll be assigned a lending specialist who’ll work with you through the whole process. Newtek will complete the application documents for you, and prequalification can happen in as soon as 48 hours. Funding times are around 90 days. 4. Celtic Bank offers SBA loans nationally. Celtic Bank features an online application process for SBA loans, which is something not all of the lenders on our list provide. Celtic Bank’s average loan amount is the highest of the 10 largest SBA lenders. Customer reviews of Celtic’s SBA lending are mixed. How to Apply for Celtic Bank SBA Loans With Celtic Bank, you’ll start by completing an online application. You’ll specify the amount you want to borrow and the purpose of the loan, along with basic information about your business, such as how long you’ve been operating and your estimated credit score. Celtic Bank says its process is quick, but there aren’t details on just how quick. An estimate of 45 to 60 days to fund is likely. 5. Byline Bank is an SBA preferred lender based in Chicago that provides loans to businesses throughout the country. A couple of its areas of expertise include agriculture and distribution. When applying for an SBA loan through Byline Bank, you’ll be paired with an SBA expert who’ll work to find a creative solution to meet your financing needs. Byline’s loan customer reviews are generally mixed. How to Apply for Byline Bank SBA Loans Byline Bank’s SBA process begins with completing an online form with some basic information about your business. Within a few days of the form being submitted, someone from Byline Bank’s team will reach out to you to discuss your financing needs. Its application and funding timeline isn’t readily available, but funding times will likely average around 90 days. 6. Ready Capital SBA focus is mostly on businesses that need higher amounts of financing than those offered in SBA Express loans. Its website advertises that it focuses on loans between $350,000 and $5 million, with underwriting driven by story and not solely the performance of the business. Ready Capital’s reviews are mixed—it received an F rating from the Better Business Bureau (BBB), due in large part to dissatisfaction with the Paycheck Protection Program (PPP) loan program, but got much more positive reviews on Lendio. How to Apply for Ready Capital SBA Loans Ready Capital has an online form that initiates the SBA application process. Within a few days, you’ll receive a larger application to complete. Approval and funding can take up to 90 days. 7. Wells Fargo SBA division has more than 400 employees and manages an SBA loan portfolio of more than $10 billion. It approved the second-highest number of SBA loans in the last fiscal year. With a presence in much of the country and a large team of SBA experts, Wells Fargo has expertise in many different industries. It’s worth noting that Wells Fargo will likely not fund new businesses without their owners having significant prior experience. How to Apply for Wells Fargo SBA Loans To apply for an SBA loan with Wells Fargo, you’ll need to go into a branch location and talk to a business banker. It doesn’t have an online application nor a robust online presence to initiate an application. The process averages around 90 days from application to funding. 8. Harvest Small Business Finance is a relatively new nonbank lender, having started in 2016. Its SBA loan program promises quick approvals and flexible service, with a willingness to finance up to 93% of the equity value of your collateral for financing needs. Due in part to the PPP loan program, it received an F rating from the BBB. However, customer service reviews elsewhere online are generally mixed. How to Apply for Harvest Small Business Finance SBA Loans Harvest provides an application form on its website but doesn’t have an email address or submission portal available to submit the application. You’ll need to call the bank directly to get instructions on submitting the application. Funding times take between 60 and 120 days, depending on the complexity of the deal. 9. Enterprise Bank and Trust services SBA loans in 13 states, including California and Texas. Enterprise promises approvals in as soon as 48 hours and funding in as soon as 30 days on some SBA loans, most likely the Express loan program. Enterprise highlights its expertise in working with businesses in many different industries. Enterprise receives generally positive customer service reviews online. How to Apply for Enterprise Bank and Trust SBA Loans Enterprise Bank and Trust offers SBA loans in 13 states, mostly in the Southwestern United States but also in Massachusetts and parts of the Midwest. If you’re in their geographic area, you can begin the application process by contacting them by phone or email via their SBA loan website. 10. U.S. Bank SBA loans are offered to businesses located within its footprint in the Western and Midwestern United States. Based on the average U.S. Bank SBA loan amount, SBA Express Loans are probably what’s driving the majority of the bank’s loan volume. If you need a smaller loan amount, U.S. Bank is worth considering. We considered U.S. Bank reviews about the company in general from across the web and found that online customer service reviews were mixed. It has an A+ rating with the BBB. How to Apply for U.S. Bank SBA Loans To start the SBA loan process with U.S. Bank, you can contact an SBA specialist online, speak with someone in a branch, or speak with someone on the phone. An application isn’t readily available on its website. While approval and funding times aren’t readily available, approval in approximately 90 days is likely. How to Qualify for an SBA Loan Qualifying for an SBA loan generally parallels the approval requirements for a conventional bank loan. You typically need the following to qualify for an SBA 7(a) loan: Minimum credit score: 680 Ability to repay: Your business needs to have positive cash flow or, for startups, positive cash flow projections, typically translating to a Debt Service Coverage Ratio (DSCR) of at least 1.25x. Collateral: The loan may not need to be 100% collateralized, but you should have some collateral, either business or personal. Equity: You’ll need up to a 25% down payment or equity investment if you’re starting a new business or if you’re acquiring a business or real estate. Personal guarantee: Every owner with at least a 20% stake in the company will need to personally guarantee the loan. These requirements are on top of the SBA’s specific eligibility requirements. You’ll be required to submit a personal financial statement through SBA Form 413 or your lender’s form to show what assets you have. Check out our SBA loan calculator to help estimate your payment. How to Apply for an SBA Loan The process of applying for an SBA loan is pretty similar for every lender. An application will be required along with a large amount of financial paperwork involving the business and its owners. To make the application process easier, you can refer to the SBA’s loan application checklist to find out what information you’ll need to provide. Many feel intimidated by the SBA loan process. , however, simplifies the SBA loan application process and can connect you with a lender that will meet your needs. SmartBiz offers up to $350,000 for working capital and up to $5 million for commercial real estate. If you’ve been in business for two years, are profitable, and have a credit score above 680, you can prequalify online in just a few minutes. Bottom Line The largest SBA lenders in the country are a mix of larger banks and nonbank lenders who specialize in SBA loans. Depending on where you live, not every bank on this list can service you; however, the majority of the 10 largest SBA lenders are available to fund loans in all 50 states.

Self-storage financing is used by small business owners to finance the purchase, renovation, construction, or expansion of self-storage units. Conventional bank loans, SBA 7(a) loans for commercial real estate, and SBA 504 loans are the most popular types of self-storage financing. is the number-one provider nationally for SBA 7(a) loans. They also provide SBA 504 loans. Live Oak has a lending team specifically dedicated to helping self-storage businesses obtain financing. Contact a Live Oak loan specialist for more information or to apply. What Self-storage Financing Is Used For There are several uses for self-storage financing, each slightly different, with various loans best suited to each situation. Self-storage Loans for New Construction New construction loans are used to build new self-storage facilities. It can be challenging to obtain financing to build a new self-storage facility unless the surrounding market is right. If the market is strong, many lenders are willing to lend for a new construction project. Having a market study done that identifies the characteristics of the general population and the current self-storage market in your area can help you get approved. Any self-storage construction project will have certain expenses that you will need to pay before you can ever rent out a single unit. Some of these expenses include: Unexpected costs that come up in site preparation Operating expenses during the lease-up phase Construction down payments Construction interest payments Typically, building a new self-storage facility will cost between $25 and $40 per square foot of storage space. In addition, the average new facility takes about three to four years to stabilize and reach average occupancy levels. This can help you calculate how much additional capital you will need for operating expenses like rent, loan payments, and a salary for yourself or a manager. Self-storage Loans for Acquisition Acquisition loans are needed when purchasing an existing self-storage facility. A lot of merger and acquisition activity in the self-storage industry is conducted by large investment companies and real estate investment trusts (REITs). It’s less common for independent storage facilities to buy others, but there are plenty of financing options if you intend to purchase an existing facility. Self-storage Loans for Expansion Expansion loans can be considered smaller construction loans because you’re adding on to your current facility and building those units from the ground up. Conventional bank loans are a good option for these expansions if you currently have a profitable storage facility that you’re adding on to, but SBA loans provide additional benefits. Self-storage Loans for Renovation When operating a self-storage business, it is essential to maintain its curb appeal. Therefore, having a well-maintained property is important. Your customers will be keeping their personal belongings in your facility, so you want to instill trust that their property will be protected and well kept. The two most common renovation projects for a self-storage facility are: Replacing the rolling doors: Raising the doors and lowering them constantly can create a significant amount of maintenance cost over time. This is typically the biggest capital expenditure for a self-storage facility, as it costs approximately $550 per unit to replace rolling doors. Reconfiguring storage units: It’s common practice within the industry to reconfigure the size of various units over time. While this can often be done with cash flow, it may require structural changes, making the task more difficult and expensive. Types of Self-storage Financing Once you know which type of self-storage project you are pursuing, you must decide what kind of financing you will obtain. Certain types of financing work better with specific types of self-storage projects. For a complete list of the best self-storage lenders, check out our buyer’s guide. Conventional Bank Loan When looking to renovate your existing self-storage facility, a conventional bank loan is an excellent option. Applying for financing through a bank with which you have a relationship is often beneficial, as they have easy access to your bank accounts to evaluate cash flow. This can often expedite the lending process for qualified borrowers. Conventional bank loans are also a good choice for refinancing an existing project. SBA 7(a) Loan for CRE Whether you want to finance new construction, acquisition, expansion, or renovation of a self-storage facility, SBA 7(a) loans for commercial real estate are a great option. SBA 7(a) loans can have repayment terms of up to 25 years, allowing a business to fund a major project and spread the payments out over a long period of time. They also enable you to finance construction interest charges and up to two years of loan payments into the loan amount. Also, unlike conventional loans, the SBA won’t require you to have specific self-storage experience if you can prove business expertise or a proven history of owning investment property. If you need more information about SBA 7(a) loans or are ready to begin the application process, is an excellent choice. They are the top provider of SBA 7(a) loans in the nation. SBA 504 Loan If you are looking to refinance your self-storage financing, an SBA 504 Loan is an excellent choice. It will often allow you to obtain financing at lower interest rates than you were previously paying and to consolidate multiple loans into a fixed payment. The term for SBA 504 loans is five to 10 years, with an extended amortization period that allows for lower payments. This results in a balloon payment at the end of the term. is a good choice for SBA 504 loans. Lendio is a broker that works with more than 70 financial institutions, and it will provide numerous potential matches for your application. Check out their website for more information. Bridge Loans While commercial bridge loans can be expensive, they are an ideal choice if you have the opportunity to buy a facility for an affordable price and need to close quickly. As long as you make payments on time with your bridge loan, it shouldn’t impact your ability to refinance quickly to a longer-term loan option. provides bridge loans to self-storage businesses to serve as interim financing between loans. You can begin the application process by entering your bridge loan needs into AVANA Capital’s loan builder—you can be preapproved within three days. If approved, you can receive funding in as little as 10 days. Lines of Credit A business line of credit is great to have for smaller projects or recurring capital needs. For example, when you have just a few rolling doors that need to be replaced, you don’t want to wait for a huge financing process to do it. Having a business line of credit on hand can help you deal with these smaller renovation projects, and it can ease the burden of any unexpected expenses that come up. offers a small business line of credit of up to $250,000. You will need at least $480,000 in annual revenue and at least 24 months of business operations to be eligible. You can prequalify online in minutes and get funded in one to three days. Hard Money Loans Hard money loans are typically short-term with repayment terms of 12 months. They are a good choice if you need to close quickly or have a weaker credit profile. Hard money loans are expensive short-term loans used to purchase or renovate investment properties. They aren’t as common in the self-storage industry as the other financing options. is our choice for the best hard money lender. It offers the lowest overall rates, with funding in five to 15 days. In addition, Kiavi lends up to $3 million for up to 12 months. What You Need to Get a Self-storage Loan Once you have decided what type of project you are financing, you can choose a loan type and lender. Each loan type has specific requirements and qualifications, and each loan type works best with specific types of self-storage projects. Choose a Loan Type and Lender There are primarily six different types of loans used for self-storage financing, each with a specific lender that we recommend. Check out our buyer’s guide for the best lender for each loan type. Qualifications While each specific loan will have its own set of qualifications, here are the general qualifications you are expected to meet to be approved for financing: Minimum credit score: 680 Minimum down payment: 10% Time in business: At least two years Debt service coverage ratio (DSCR): 1.25x or greater Credit history: No recent bankruptcies, tax liens, or foreclosures Documentation Needed Each type of financing will also require specific documentation. Here is a general list of documentation you should gather before beginning the application process: Three years of taxes (business and personal) A statement explaining the loan purpose A current balance sheet with debt schedule (if refinancing) Current profit and loss statement Financial statements (business and personal) Rent roll/occupancy report (if refinancing) Market feasibility study (if new construction) Business plan and resume of borrowers with emphasis on real estate/self-storage ownership experience Bottom Line There are many types of financing for self-storage loans. You should first consider which type of self-storage financing you will need before determining what type of loan to pursue. Certain types of loans work better for specific types of projects. However, SBA loans are usually the top options for financing self-storage projects.

SBA Form 1919 is the borrower information form filled out by applicants as part of the process of applying for a Small Business Administration (SBA) loan. This form includes personal and business-identifying information as well as responses to questions that range from citizenship status to the number of potential jobs created or retained through the loan. Filling this form out properly will minimize potential delays in loan approval. If you’re feeling overwhelmed by the SBA loan application process, we suggest partnering with a loan provider like . To qualify, you must be in business for at least two years, have a credit score of at least 680, and be profitable. You can get prequalified in just a few minutes and get funded for up to $350,000 in as soon as 30 days. Who Completes SBA Form 1919 Based on business structure, the individuals who need to fill out SBA Form 1919 are: Sole proprietorships: The sole proprietor of the business needs to complete the form General partnerships: All general partners and all limited partners with 20% or more equity in the business must complete the SBA borrower information form Corporations: All individuals owning 20% or more in the corporation as well as each officer and director, must fill out the form Limited liability companies (LLCs): All members owning 20% or more of the company, as well as each officer, director, and managing member, are required to complete SBA Form 1919 In addition, any key employee hired by the business to manage day-to-day operations, as well as any other person the SBA requires to provide a personal guarantee on the loan, must submit the borrower information form. How To Complete SBA Form 1919 Filling out SBA Form 1919 can be a bit difficult. However, submitting an accurate form will help prevent delays in getting your SBA loan approved. Section I: Applicant Business Information The first section of SBA Form 1919 is to be completed for the applicant business by a designated representative of your company. Once the information is provided, that designee will sign the form to attest to the accuracy of the borrower information being reported. Applicant Business Identifying Information In this section, the following basic identifying borrower information is required: Applicant Business Legal Name: Include your company’s legal name as reported on your organizational documentation and most recent federal tax returns. Also, indicate if your business is an operating company (OC) or eligible passive company (EPC). DBA or Trade Name: If you’re “doing business as” (DBA) another name or using a trade name that’s different from the legal name of your business, list it in this section. Applicant Business Primary Business Address: Provide the current address of your business. Project Address: If you’re looking to finance property or business operations located at a different location than your primary business address, include that address in this section. Applicant Business Tax ID: Provide the tax identification number for your business. Applicant Business Phone: Include the phone number for the primary business contact in this section. Primary Contact: List the name of the primary contact person here. This should most likely be the same as the person who is preparing Form 1919. Email Address: Provide the email address for the primary contact person. Amount of Loan Request: Include the dollar amount of the loan you’re requesting in this section. Purpose of the Loan: List the purpose of the loan in this section. Example loan purposes include purchasing real estate, refinancing existing debt, or purchasing fixed assets. Our article on SBA loans provides information on eligible uses of loan proceeds by SBA loan type. Number of Existing Employees Employed by the Business: Include the number of employees your business currently employs, including owners. Number of Jobs To Be Created as a Result of the Loan: Estimate the number of jobs that your business will create as a result of this loan. There’s no defined methodology for calculating this number, but try to provide a reasonable estimate. Number of Jobs To Be Retained as a Result of the Loan: Estimate the number of jobs that your business will preserve as a result of this loan. As with the number of jobs created, there’s no defined methodology. Small Business Applicant Ownership: Provide the name, title, ownership percentage, and address for each business owner. Make sure you reflect 100% of the ownership in this section. If you don’t have enough room to list all the owners, you can attach another sheet to provide the details. Include the name of the applicant business on the attachment, note it’s a supplement to SBA Form 1919 Section I, include all the required fields, and sign the bottom of the attachment. The next 11 questions mainly require either a yes or no response. Question 1: Co-applicants This question asks if there will be any co-applicants on the loan. If the answer is “yes,” the Section I: Applicant Business Application section of the SBA 1919 form needs to be completed and signed by an authorized representative for each applicant. Questions 2 and 3: Past SBA Loan Applications & Other Restrictions Question 2 addresses whether you have previously applied to the SBA, a lender, or a certified development company (CDC) for this project. If the answer to question 2 is “yes,” then you’re required to provide a separate attachment explaining the circumstances surrounding your prior loan application. The third question asks if you have been suspended, debarred (actual or proposed), or otherwise deemed ineligible or excluded from participation in the SBA loan program by any Federal department or agency. If the answer to this question is “yes,” then you won’t be approved for an SBA loan. You can work with your loan provider to understand more about what this means to you, or you can consider alternative financing sources if an SBA loan isn’t an option. Question 4: Franchise Businesses This question determines whether your business operates under a franchise agreement. The SBA has a list of franchises that it has approved for SBA loans, which may help your chances of approval if you’re a franchise business. Refer to the SBA Franchise Directory to identify if your franchise is included. Question 5: Business Affiliates This question determines whether your business has any official affiliates. According to the SBA, an “affiliate” includes: A parent company Subsidiaries and other companies that are owned or controlled by the applicant Companies in which an officer, director, general partner, managing member, or party owning 20% or more of the business is also an officer, director, general partner, managing member, or 20% or greater owner Companies or individuals with unexercised options owning 50% or more of the business’s stock Companies that have entered into agreements to merge with the business If you have any affiliates, provide the legal names of those entities as included on your most recent federal income tax forms. Refer to this SBA guide for more information about affiliates. Many of the subsequent questions refer to your business and your affiliates, so make sure you’re considering both the applicant business and any affiliates when answering. Question 6: Bankruptcy Protection Question 6 on Form 1919 deals with whether your business or any of its affiliates have ever filed for bankruptcy protection. Individual owner bankruptcy is addressed in Question 24. If there was a prior loss to the government resulting from a bankruptcy filing protection on the part of your business or any guarantors, then your loan cannot be approved. The extent to which a prior bankruptcy that didn’t result in a government loss will be factored into the decision to approve your loan is at the discretion of both the SBA and your lender. Be prepared to provide as much information as possible to your lender about the factors surrounding any prior bankruptcy filings. Question 7: Pending Legal Actions If your business or any affiliates are currently involved in a pending legal action, respond “yes” to this question. While having a pending legal action doesn’t necessarily mean your application will be denied, you need to be prepared to give your loan provider information about the situation. Honesty and transparency will go a long way towards building your case and establishing credibility with your loan provider. Question 8: Past Government Loans This section of the SBA Form 1919 requires you to answer if you have previously taken any other government loans. This includes other SBA loans, Federal Housing Administration (FHA) home loans, veterans loans, student loans, and disaster loans. Sub-questions (a) and (b) also require you to indicate whether any of these loans were ever delinquent or in default. Question 9: Export Activities This question evaluates your export activities. If you’re using this loan to expand your exports or begin exporting for the first time, try to estimate the total export sales that you’ll have if you’re approved for this loan. There’s no defined methodology for this calculation, but do your best to provide a reasonable dollar amount. Question 10: Help With Your Application This question determines whether you have received any outside help with your SBA loan application. If you hired a packager, provider (like ), broker, accountant, lawyer, or others who have specifically helped you with the loan application, answer “yes.” If “yes,” the person you hired is required to fill out SBA Form 159. Question 11: Business Revenue From Gambling This question determines whether any of your revenues are derived from activities related to gambling, loan packaging, or displays that are overtly sexual. If your business falls into these ineligible categories, the SBA won’t approve your loan. Questions 12 to 16: Conflicts of Interest This section of Form 1919 includes true or false questions that determine whether there’s a conflict of interest between any member of your company and the SBA or any other government agency. If you answer “false” to any questions, this doesn’t mean that your loan will be denied, only that you’ll have to use different SBA procedures. Some potential conflicts of interest that the SBA will ask about include: Whether you, your spouse, or another member of your household works for the SBA If any employee, owner, partner, attorney, agent, owner of stock, officer, director, creditor, or debtor of the applicant has worked for the SBA within the past year If a member of Congress, an appointed official of the judicial or legislative branch, or family member of such an individual is a sole proprietor, general partner, officer, director, or stockholder with a 10% or more interest in the business If any government employee with a grade GS-13 or household member of such an individual is a sole proprietor, general partner, officer, director, or stockholder with a 10% or more interest If any member or employee of the Small Business Advisory Council, a SCORE volunteer, or household member of such an individual is a sole proprietor, general partner, officer, director, or stockholder with a 10% or more interest Once you have completed Section I of the borrower information form and truthfully answered all the questions, an authorized representative of the applicant business must sign, date, and print their name and title. Section II: Principal Information Section II of the SBA Form 1919 is to be completed by key employees and by every individual with 20% or greater ownership in the business. Each of these individuals will need to prepare their version of this form. Once the information is provided, the individual or authorized business representative needs to sign the form to attest to the accuracy of the information reported. Principal Identifying Information In this section of the form, as a principal of the business, you’ll begin by providing the following basic identifying information: Principal Name: Include your full legal name Social Security Number or Tax ID: Provide your Social Security number or tax identification number Date of Birth: List your birth date in this section Place of Birth: If you were born in the United States, list the city and state in which you were born; if born outside the US, list the name of the foreign country Home Address: Provide your current address Home Phone: In this section, provide the number where you can most easily be reached, which can be your cellphone % of Ownership in the Small Business Applicant: Indicate your percent of ownership in the company in this section Veteran, Gender, Race, & Ethnicity Data: You can voluntarily disclose this information, which is collected only for program reporting purposes; the information provided in this section has no bearing on the credit decision made by the SBA or the lender Question 17: Current Legal Proceedings The SBA doesn’t support loans to people currently under indictment, on parole, or on probation. All criminal investigations must be resolved, and all parole and probations lifted before you can be considered for eligibility under an SBA loan program. If you have to answer “yes” to this question, you and the applicant business are ineligible for an SBA loan at this time. Questions 18 and 19: Past Criminal Activity These questions on the borrower information form deal with past legal offenses. If you answer “yes” to these questions, you may still be eligible for an SBA loan, but you’ll need to complete SBA Form 912 in addition to SBA Form 1919. That will give the lender additional information to conduct a background check and character determination to see if you and your company are still eligible for an SBA loan. You must report all of your criminal offenses, excluding minor vehicle violations. This includes convictions, guilty pleas, no contest pleas, pretrial diversions, paroles, and probations, regardless of how long ago they took place. Don’t lie or leave off information in this section, even if it was a felony from 20 years ago. If you leave off this information, you won’t get a loan, and you’ll be committing a crime by knowingly signing the form while stating that all information is correct. Question 20: Application Prohibitions This question addresses whether you’re currently prohibited from applying for this type of loan. If you have been suspended, debarred (actual or proposed), or otherwise deemed ineligible or excluded from participation in the SBA loan program by any Federal department or agency, then you won’t be approved for an SBA loan. Question 21: Child Support Payments This question applies to individuals who own 50% or more of the business applicant and asks if you’re more than 60 days delinquent on any legally required child support payments. If the answer to this question is “yes,” then the SBA won’t be able to approve your loan request. Question 22: US Citizenship This section of form 1919 determines whether you’re a US citizen or have received lawful permanent resident status. If you aren’t a US citizen, provide your Alien Registration Number. Lawful permanent residents are eligible for SBA loans. Some non-US citizens are also eligible for SBA loans but need to meet additional requirements to qualify. Having real estate collateral and operations located in the US, a management team made up of US citizens or lawful permanent residents, or an established business with more than one year of operational history can all help a non-US citizen qualify. Question 23: Affiliated Business Interests This borrower information form question pertains to whether you have any ownership in businesses that are considered affiliates of the applicant. You can identify whether other businesses you own are considered affiliates by referring to Question 5 in Section I of SBA Form 1919. Question 24: Bankruptcy Protection This question addresses whether you have ever personally filed for bankruptcy protection. If there was a prior loss to the government resulting from your bankruptcy filing protection and you’re required by the SBA to provide a guarantee on the loan, then the loan to your business cannot be approved. The extent to which a prior bankruptcy that didn’t result in a government loss will be factored into the credit decision is partially at the discretion of the SBA and your lender. That said, you should be prepared to provide as much information as possible to your lender about the factors surrounding any prior bankruptcy filings. Question 25: Pending Legal Actions If you, or any business you control, are currently involved in a pending legal action, then you need to respond “yes” to this question. This includes divorce proceedings. While having a pending legal action doesn’t necessarily mean the SBA loan application will be denied, you need to be prepared to provide your loan provider with information about the situation. Honesty and transparency will go a long way towards building your case and establishing credibility with your loan provider. Question 26: Past Government Loans This section of the borrower information form requires you to disclose whether you have previously taken any other government loans. This includes other SBA loans, FHA home loans, veterans loans, student loans, and disaster loans. Sub-questions (a) and (b) also require you to indicate whether any of these loans were ever delinquent or in default. Bottom Line While the amount of paperwork required to get an SBA loan can seem overwhelming, taking the time to truthfully complete SBA Form 1919 will help you in the process of getting your SBA loan approved. Providing false information or failing to disclose required borrower information may cause your application to be denied or significantly delayed. Do you need other SBA loan forms? We’ve got you covered: SBA Form 912 Statement of Financial History SBA Form 159 Fee Disclosure Form & Compensation Agreement SBA Form 413 Personal Financial Statement

Small businesses looking to purchase or lease vehicles, fleets of vehicles, or even certain equipment can use commercial auto financing to obtain these assets. Both traditional and online lenders offer financing options with various terms, funding amounts, and required qualifications. By using business auto financing, companies can manage cash flow by spreading out the cost of large asset purchases over a period of time. If you’re looking for a commercial auto loan, National Funding is an excellent choice. It offers loans to businesses that have at least six months in operation and $150,000 in annual revenue. National Funding can lend up to $500,000 for up to five years. Check out website for more information or to apply for financing. Who Commercial Auto Financing Is Right For Commercial auto financing is useful to businesses for many reasons. It allows a company to purchase or lease vehicles for employee use, transport customers, transport goods, and keep personal and business vehicles separate. While commercial auto financing is similar to personal auto financing, there are three important differences: The vehicle is for business purposes: Unlike personal vehicle financing, lenders may ask for a business plan or company financial statements if the vehicle is to be used for business purposes. The vehicle can be titled in the business’s name: This allows the business owner’s credit and assets to be protected if the business cannot repay the debt. However, many lenders will still require a personal guarantee for the loan or lease, making the owner still financially liable for the business debt. Some tax deductions are available: Ownership and operation costs can be deducted from business taxes, as well as depreciation. Section 179 of the tax code allows for the business to take the entire deduction at once. Consult your tax professional for more information. General Terms for Commercial Auto Loans Numerous lenders, both traditional and online, offer commercial auto loans with various rates, fees, terms, and requirements. The table below includes some general requirements to expect when you start shopping for a lender. How To Get a Commercial Auto Loan 1. Determine Your Budget There are a few different factors to consider when determining your budget. First, you need to figure out what monthly payment your business can afford in relation to your monthly revenue. Additionally, you should budget for recurring expenses, including fuel, maintenance, and storage fees for heavy-duty vehicles. You also need to consider how much more revenue the vehicles will generate as part of the budget calculation. For example, a trucking company can generate more revenue with the purchase of additional trucks. All of these factors will determine what you can afford to purchase. 2. Choose a Vehicle and Lender Once you have a budget in mind, start looking for vehicles and shopping for lenders. Our buyer’s guide will give you a list of the best commercial auto loan providers. While you begin the process of choosing a vehicle and a lender, it’s also a good time to review your business credit to get an idea of your chances of being approved. 3. Gather Documents Each lender will require different documents during the loan application process. Here’s a list of some of the documents that your lender may require: Tax returns (business and personal) Business financial statement (profit-loss) Business incorporation agreement Federal tax ID number Bank statements (business and personal) Business plan Additional cash flow statements 4. Apply for Financing Once you have determined your budget, chosen a vehicle, selected a lender, and gathered your documents, it’s time to apply for financing. Most online applications can be completed in minutes, with approval in less than 24 hours. 5. Accept the Loan Terms & Sign for the Vehicle Once the lender has approved you, review the terms and conditions of the loan carefully before signing. Pay close attention to the interest rate, repayment terms, and any restrictions the lender places on your vehicle selection. Some lenders will limit how old a vehicle you can choose and how many miles that vehicle can have. If the terms and conditions are agreeable, sign the loan paperwork and complete the vehicle’s financing. Buying vs Leasing Sometimes buying vehicles or equipment outright might not be in the best interest of your business. Depending on whether you intend to keep the vehicle or equipment long-term, an equipment lease might be the more affordable option. Buying With a commercial auto loan, the business has the right to put as many miles on the vehicle as it wants. Once the loan is paid off, the business owns the vehicle and can transfer it to a new owner or keep it. Also, there are usually no prepayment penalties associated with commercial auto loans. On the negative side, the lender may require a down payment. The repayment terms will likely be longer with higher payments than leasing. Because the terms are longer, the vehicle will not retain as much value at the end of a loan, making it less valuable to trade in or sell. Leasing Whether you use automobile or equipment leasing, the advantages include lower payments and shorter terms. In addition, leases with a walk-away option can save your business money by allowing you to walk away from a sizable balloon payment. The lease may not require a down payment either, although you may be required to pay a security deposit or the first month’s payment. On the negative side, annual mileage limits might require businesses to pay extra for additional miles. In addition, the ownership doesn’t transfer to the business owner automatically at the end of all leases. If a business doesn’t have a lease that includes a walk-away option, the business could face a large balloon payment. Commercial Auto Financing vs Equipment Loans When financing commercial trucks, many lenders will require you to take out an equipment loan or lease instead of commercial auto financing. You can check out our guides on equipment loans and equipment leases for more information. If you are ready to move forward with an equipment loan, offers loans of up to $5 million for up to 60 months with no minimum time-in-business requirement. Bottom Line Commercial auto financing allows a business to purchase or lease vehicles, fleets of vehicles, or even certain types of equipment. As a result, companies can spread out the cost of large asset acquisitions over a long time. Businesses can purchase vehicles and equipment or lease them. Leasing vehicles and equipment can provide additional benefits to both short-term and long-term cash flow. Businesses should consider all factors involved with commercial auto financing before choosing a lender or a leasing company.

When looking for a business auto loan, there are many factors a small business needs to consider before applying for financing. For example, a business should look at how much it needs to borrow, the maximum term of the loan, the interest rate offered by the lender, any specific requirements regarding the age and mileage of the vehicle, and minimum annual revenue and time-in-business requirements. By using a business auto loan, companies can manage cash flow by spreading the cost of large asset purchases out over a period of time. Depending on what a business is trying to finance, either a business auto loan or equipment loan might be the right choice. For example, some lenders will only finance large commercial vehicles under equipment loans rather than business auto loans. Here are our eight choices for the best business auto loan providers: : Best overall—low rates without funding restrictions on dealership vehicles : Financing for dealerships and private vehicles : Online lender with terms similar to traditional banks : Companies in the West or Midwest that need new or used vehicle financing : Established East Coast businesses that want low-cost financing : Funding up to $5 million for a fleet of vehicles : Borrowers with low personal credit scores : Businesses looking for equipment loans rather than a traditional auto loan Bank of America Bank of America is the best overall choice for a business auto loan due to its low starting annual percentage rate (APR), lack of funding restrictions, and easy-to-meet qualifications. You can finance a vehicle with up to 75,000 miles that’s up to five years old and have funding in one to three days. The only drawback is that older vehicles or higher-mileage vehicles may not qualify. Borrowers looking at higher mileage vehicles should consider Wells Fargo or Crest Capital for business auto financing. You can visit website or stop into a branch location to get the application process started. Wells Fargo Wells Fargo is another excellent choice for a traditional lender providing business auto loans. The starting rates are a little higher than Bank of America, and the $100,000 loan maximum might not be enough to meet every business’ need. Otherwise, the terms and qualifications are borrower-friendly. You can visit the website or stop into a branch to apply for business auto financing. Crest Capital Crest Capital is an excellent choice for businesses looking for an online lender with terms similar to a traditional lender. Crest Capital promises funding in as soon as four hours for loan amounts of less than $250,000. However, additional documentation is required for loans of more than $250,000, which slows down the application process. Crest Capital’s requirements are a little more stringent than the first two lenders on our list, with the lender listing a minimum credit score and time in business requirement. To apply for business auto financing with , visit its website. U.S. Bank For businesses located in the Midwest and western parts of the United States, U.S. Bank is an excellent choice for a traditional lender. You can get financing of up to $250,000 with up to 84 months to repay the loan. The factors that push U.S. Bank down the list are the regional nature of the bank combined with higher credit score and time-in-business requirements than other lenders on this list. To apply for a loan with , visit its website or stop into a bank branch. PNC Bank If your business is located on the East Coast, PNC Bank is a good choice for business auto financing. Its terms are very similar to U.S. Bank’s terms. You can borrow up to $250,000 for up to 72 months. However, PNC Bank does have some of the most stringent time-in-business requirements, as your business must be operating for at least three years to qualify. Bank of America, Wells Fargo, and South End Capital are lenders on this list that have no minimum time-in-business requirements. To apply for business auto financing with , stop by a bank branch or click on its website. Celtic Bank Celtic Bank works with the Small Business Administration (SBA) to provide loans for fleet purchases. The SBA provides a partial guarantee for Celtic Bank business loans. This allows for very low rates on large loans. It offers the largest loans on our list, at up to $5 million. However, because Celtic Bank works with the SBA and offers large loan amounts, more strict qualification and documentation is required. For more information on this financing option, check out . National Funding For business owners with bad credit, National Funding is a good choice for business auto financing. Interest rates on these loans are higher, so borrowers with strong credit profiles should shop around for the best rates. You can borrow up to $500,000 for up to five years. Businesses must be in operation for at least six months and show an annual revenue of at least $250,000. Visit website to apply for business auto financing. South End Capital For businesses looking for auto financing that might fall into the equipment category, South End Capital is an excellent choice. It’s also a good choice for lower credit borrowers as the minimum credit score needed to qualify is 625. Qualified borrowers can borrow up to $5 million for up to 60 months. There are a variety of repayment schedules available. It should be noted that the origination fees range between $399 and $599, which are higher than those of some lenders on this list. However, there are no minimum time-in-business requirements, which makes it a good choice for startups. Stop by website to apply for equipment financing. How We Evaluated Business Auto Loan Providers When comparing the best business auto loan providers, we analyzed several factors to find the lenders that provided the best terms and services. The criteria we used to evaluate the best business auto loans were: Rates and fees: Collateral for the loan is the vehicle being purchased—lower interest rates than other types of business financing Loan amounts: The total amount that can be borrowed to purchase the vehicle Repayment terms: How often payments will be due and the maximum repayment term Qualification requirements: What credit score, time in business, and annual revenue requirements each company has Vehicle restrictions: The age and mileage limits put in place by each lender Speed of funding: How quickly the loan will be approved and how long it’ll take to receive funds Bottom Line Business auto financing provides companies with affordable financing for individual vehicles, fleets of vehicles, and even equipment financing. Each lender on this list has different qualifications and terms, so you should compare rates and terms from multiple lenders before deciding where to apply for financing.

A small business line of credit is best used for ongoing expenses like payroll, inventory, and working capital. It has shorter repayment terms and higher interest rates than term loans, and you’re only charged for the amount you borrow. To apply, you’ll need to prepare financial documentation, select a lender, and submit an application. A fast way to get a small business line of credit is with . Their online application requires minimal information, and businesses can be funded in as soon as 24 hours. Bluevine offers lines of credit as large as $250,000, with rates starting at 6.2% and terms up to one year. The six steps for getting a business line of credit are: determine why you need funding, meet the qualifications and requirements, consider the costs and terms, gather your documentation, compare small business line of credit providers, and submit your application. 1. Determine Why You Need Funding Business lines of credit are typically used for ongoing expenses such as inventory, payroll, and general working capital. If you answer “yes” to any of the following questions, then a small business line of credit is a good financing option: Is this a regularly occurring business expense? Does the business have sufficient cash flow to repay the principal and interest within one year? Can I take advantage of the revolving feature for future financing? Does my business need access to financing on demand for unpredictable expenses? If you’re financing a larger project, such as a big piece of equipment that will require payments over several years, an equipment loan may make more sense. Additionally, if you need financing due to unpaid invoices from your business or government customers, then invoice factoring could be a less expensive option for your business in the long term. 2. Meet the Qualifications & Requirements To qualify for a line of credit, the following minimum requirements and qualifications need to be met: Personal credit score: At least 600 Annual revenue: $50,000 or more Time in business: Six months or longer Collateral: Blanket Uniform Commercial Code (UCC) filing typically required Personal guarantee: Typically required A blanket UCC filing pledges your business assets as collateral for the loan in the event of default, and it’s typically required. The personal guarantee is a signed promise to a lender, backed by your personal assets, that you’ll repay a loan. The vast majority of lenders will require this. Also, most traditional banks will have higher minimum qualifications for credit score, revenue, and business history than online lenders. While some lenders offer financing to businesses that have been in operation for as little as six months, newer businesses should consider other startup financing options should they have difficulty obtaining a line of credit. 3. Consider the Costs & Terms The typical terms you can expect for a small business line of credit are: Average APR: 20% to 50% Credit limit: Up to $250,000 Repayment term: Typically six to 12 months Repayment schedule: Weekly or monthly Unsecured lines of credit typically don’t exceed $250,000 and have repayment terms of six to 12 months, with both weekly and monthly payments available. If you need a larger line of credit or a longer term, a local bank may be a good option. Many traditional lenders will review your line of credit on an annual basis and may adjust the credit limit based on business profitability, how the line of credit was used, and any balances that are still outstanding at the time of review. Keep in mind that interest rates and fees vary widely between lenders. Online lenders typically charge a bit more but have easier qualification standards while traditional lenders charge less but have stricter guidelines for approval. 4. Gather Your Documentation The details you’ll typically need to provide when applying for a small business line of credit are: Business name and address Personal information including name, address, Social Security number, and income Phone number Tax ID Nature of business Date business was established Number of employees Annual gross revenue Many traditional lenders will request additional items such as financial statements and the last three years of tax returns for both you and your business. In a few instances, a lender may request accounts receivable and accounts payable aging reports to determine if you qualify. If you need faster funding, an online lender may only request a few months of bank statements, thereby speeding up the decision-making process. 5. Compare Small Business Line of Credit Providers When deciding whether to work with an online alternative lender, a traditional bank, or a credit union, there are some important factors that small business owners should keep in mind. First and foremost, you’ll need to determine how much you’re going to need and how quickly you’ll need funding. While you can get approved for larger lines of credit with a bank, it’ll typically take much longer to do so. The best lines of credit are also revolving, allowing you to reborrow funds once they’ve been repaid. Traditional Bank or Credit Union Your local bank or credit union can be a great place to start applying for a business line of credit, especially if you already have your business checking account with them and have an established relationship. Banks and credit unions typically offer better overall terms and lower interest rates, but the application process will require more documentation than an online lender and can take 30 or more days to get funded. If you’re having trouble qualifying for an unsecured business line of credit, a bank can also offer you an asset-based secured alternative backed by your accounts receivables, inventory, or equipment. Online or Alternative Lender If you would like to complete your application online or need access to funding quickly, you should apply for a fast online business loan. You’ll typically receive a smaller credit limit, but the paperwork required is minimal, and you can qualify and get funded as quickly as one business day. While credit line limits are typically advertised up to $250,000, businesses will usually be approved for $6,000 to $30,000. One good option for a line of credit is . Bluevine offers a line of credit up to $250,000 for terms of up to 12 months and both weekly and monthly payments. You’ll need to have at least $480,000 in annual revenue and a credit score of 625 or greater to qualify for starting rates as low as 6.2% of the draw amount. 6. Submit Your Application Online lenders and many traditional banks will allow you to submit your application entirely online, and it typically takes a matter of minutes to complete. Smaller banks may still require a paper application or may provide you with an editable PDF that can be submitted by email to a lender. Although many traditional banks now offer an online application, you may need to be located near one of their local branches. Tips on Getting Approved for a Small Business Line of Credit Getting approved for a small business line of credit depends on meeting basic qualifications around credit, business history, and revenue. Beyond those basic requirements, a few other tips can help improve your odds and manage your expectations about the approval process: Have a plan for how you will repay the funds: When you apply, many lenders will ask you why you need a line of credit. It can be for working capital, operating expenses, or to help with cash flow because of seasonal variation in revenue. Make sure you budget in the payment so that you can manage those funds within your cash flow and not hurt your business’s bottom line. Boost your credit and business performance: If you haven’t checked your credit score, . If you find that your score is low or that your business performance is struggling, you can seek out the services of mentors and advisors through SCORE or the Small Business Development Centers (SBDC). Be ready to accept less than what you apply for: Lenders don’t always approve the full amount of a line of credit application and will base their decision on your company’s revenues, debt exposure, or lack of history if it’s a newer business. While this is an inconvenience, it does set the stage for a credit limit increase in the future, assuming payments are made on time. Alternatives to a Small Business Line of Credit Choosing the right mix of business financing is important to ensure that your business is well equipped to expand and serve your customers. You’ll typically find that your business is best served by taking advantage of several forms of financing for different purposes. Some financing alternatives to a business line of credit are: Term loans: When your business needs financing for a big project that requires getting a large advance of funds upfront with longer repayment terms, you should consider getting a term loan. If you need a term loan but still want the option of a line of credit, selecting a lender that can provide both will save you time and effort. Invoice factoring: If your business is earning sufficient revenue but your customers aren’t paying their invoices quickly enough, invoice factoring may be an option for your business. Invoice factoring allows you to sell your invoices for up to 90% of their value upfront and collect the remainder minus a factoring fee when the invoice is paid. Credit cards: A business credit card can be a better option, especially if the amount of financing you need is less than $20,000, or you regularly make purchases online for your business and a credit card is required for payment. If you make credit card payments on time, you’ll likely save on finance charges and help build your business’ credit. We have a list of recommended small business credit cards that can help you find the best option for your business. Bottom Line Whether your business needs financing for payroll or regular maintenance, a business line of credit is a great option. When applying, you should have financial information ready for both you and your business and select a lender that’s likely to approve you for the terms and rates you need.

A uniform commercial code (UCC) filing is a notice registered by a lender when a loan is taken out against a single asset or a group of assets. A UCC filing creates a lien against the collateral a borrower pledges for a business loan. The uniform commercial code is a set of rules governing commercial transactions. When a business owner receives financing secured by collateral, a lender can file a UCC lien against the assets pledged by the business owner. This secures the loan or the factoring contract. The lien prevents the business owner from selling the collateral or obtaining additional financing using the same collateral as security. UCC filings are first come, first served, meaning that if the borrower defaults on the loan, the first lender to have filed against the collateral will have the first rights to the asset. Liens automatically expire after five years, although they can be renewed on long-term loans. When Are UCC Liens Used? UCC liens are often used on non-titled equipment. While UCC filings can be used on titled vehicles, those liens are usually filed directly on the vehicle’s title. This direct form of lien filing makes it harder to transfer the ownership of the vehicle without settling the lien. Lenders can file liens on many types of assets, including: Commercial instruments Inventory Investment securities Large operating equipment Letters of credit Office equipment Real estate Receivables Vehicles Anyone can check the status of UCC filings using a public UCC search provided on the National Association of Secretaries of State website. Types of UCC filings Lenders can use one of two types of UCC liens when securing assets in exchange for financing. A lender can file a UCC lien against specific collateral, or the lender can use a blanket UCC filing to cover all business assets. UCC Lien Against Specific Collateral When a lender files a UCC lien against specific collateral, the lender secures interest in one or more assets but not against all company assets. This is most common when purchasing equipment and for inventory financing. For example, a farmer who buys a piece of farm equipment would have a UCC lien filed by the lender on just that specific piece of equipment. Blanket UCC Filing In some cases, a lien against specific collateral may not provide the necessary security for the lender. In this case, the lender would file a blanket UCC lien over all of a company’s assets. This provides more security to the lender and allows the business owner to borrow larger amounts of money. However, blanket liens can make it challenging for the business to get additional funding until the lien is satisfied or the lender removes it. The UCC-1 Financing Statement Lenders must file a UCC financing statement with the secretary of state in the state where the borrower incorporated their business. Creditors file this to make a UCC claim valid. The UCC-1 financing statement describes the lien, the identity of the lienholder, and the identity of the debtor. All UCC lien filings are public records and give notice to other potential lienholders or creditors that the assets a borrower pledges as collateral are encumbered. This secures the collateral for the lender and ensures that borrowers cannot pledge the same asset for multiple financing products. Effects of a UCC Filing A UCC lien only impacts a business if it needs to borrow additional funds or defaults on a loan. Otherwise, a UCC filing has little to no effect on a business’s operations. However, you should consider the following risks associated with UCC filings before applying for a loan: Impacts Business Credit Your business credit report will show all UCC liens for the past five years. This is an excellent way to see if there are liens on your credit that the lender did not remove after the lien was satisfied. While a UCC lien will not impact your business credit score, lenders can see existing liens, payment history, and amounts borrowed on business loans. Potential lenders can use this information in loan decisions. Prevents Use of Collateral for Other Loans If assets are tied up in a UCC filing, especially with a blanket UCC lien, a business owner will not be able to use them as collateral for additional loans. Because UCC liens are first come, first served, a lender usually will not take a second position behind a previous UCC filing because the risk is too great in case of default. Three options for getting financing with an existing UCC filing include: Asking lenders to carve out assets from the blanket lien: A lender might be willing to release some collateral from a blanket lien so it can be used as collateral for a new loan. However, this can be difficult, as the lender with the UCC blanket filing must have sufficient value in the remaining collateral to consider releasing assets. Refinance the current loan: In many cases, to change the collateral on an existing loan, the loan will have to be refinanced. In this case, the collateral can be changed so certain assets are not included in the refinanced loan. Find a lender willing to take a second lien position: Maybe the most difficult of the three is finding a lender willing to take the risk of being behind another lender in lien positioning. A business likely will have to be well qualified with strong credit for a lender to consider taking such a risk. Puts Collateral at Risk Any secured loan comes with the risk that the collateral could be repossessed if the borrower defaults on the loan. A UCC filing is no different. If a borrower defaults on a loan secured by a UCC lien, the lender can take legal action to repossess and potentially sell the collateral to avoid a charged-off loan. How to Remove a UCC Lien The first step to removing a UCC lien is to pay off the loan. Lenders are required to release the collateral from a loan when it has been satisfied. When the loan has been satisfied, the lender will file a UCC-3 financing statement amendment which removes the UCC lien. If the borrower is struggling to remove a UCC lien, they can submit a letter to the lienholder. A borrower can also swear an oath of full payment with the secretary of state’s office. The state will then remove the UCC lien. Lying about UCC liens can result in specific penalties, including fines or jail time, so be sure the loan has been paid in full before going this route. To check to see if a lien has been released, the National Association of Secretaries of State has provided links to each state’s UCC lien information. Review your initial UCC-1 financing statement for details on how the lien is listed with the state. Bottom Line A UCC filing is a common practice for lenders providing equipment financing to businesses. As long as the lien is satisfied, the only potential drawback might be the limited ability to obtain additional financing for the company until the lien is released. You should make sure liens are released after loans are satisfied so the collateral can be used for additional financing if needed.

Purchase order (PO) financing is a working capital solution used to fund inventory for outstanding customer orders. When businesses deal with significant growth or face a spike in demand, purchase order financing can help meet those challenges. We have researched several PO financing companies, selecting the top five options that will serve the needs of many businesses. : Best overall option for small businesses : Best option for larger businesses : Best option for smaller purchase orders : Best option for lower rates : Best for flat-fee pricing SMB Compass: Best Option for Qualified Small Businesses Why we like SMB Compass: We ranked SMB Compass as the best overall option for small businesses because it provides purchase order financing starting at $25,000 and can finance up to $10 million. While it may not be ideal for businesses operating on a lower profit margin, this minimum provides well-qualified smaller businesses with a purchase order financing option. Its competitive rates are also attractive for qualified businesses who are seeking financing. King Trade Capital: Best Option for Larger Businesses Why we like King Trade Capital: King Trade Capital has completed more purchase order financing deals than any other company, with more than $2.5 billion funded since 1993. They’re one of the few PO financing companies that will finance up to $20 million in purchase orders. For businesses seeking larger amounts of capital in a purchase order, King Trade Capital is a great option to consider. Liquid Capital: Best for Smaller Purchase Orders Why we like Liquid Capital: Liquid Capital offers financing of purchase orders as small as $20,000, which is the lowest starting point among the companies we reviewed. Liquid Capital’s financing rates are competitive within the industry and their repayment terms allow purchase order repayment out to 90 days. If you have smaller purchase orders in the $20,000 range, Liquid Capital is a great option to consider. 1st Commercial Credit: Best Option for Lower Rates Why we like 1st Commercial Credit: 1st Commercial Credit offers borrowers the lowest starting rates of the companies we surveyed, starting at 1.5%. These low starting rates make 1st Commercial Credit a great purchase order financing option if your business’s profit margin is high enough to qualify. PurchaseOrderFinancing.com: Best for Flat Fee Pricing Why we like PurchaseOrderFinancing.com: PurchaseOrderFinancing.com’s pricing structure is a flat fee, which may be advantageous, as it offers predictability in determining pricing. Rates range from 3% to 6% regardless of the term, with maximum funding amounts up to $25 million. This lender is arguably best suited for larger companies, given the initial funding minimum of $500,000. How Purchase Order Financing Works Purchase order (PO) financing works like this: first, a business asks a lender to facilitate a transaction between its suppliers and its customers. After receiving an order from a customer, that order is presented to a supplier for a price quote. The quote is then forwarded to the lender for approval, and capital is transferred to the supplier to fulfill the order. Once the customer’s order is filled, the business issues the customer an invoice that’s payable directly to the lender. When the customer pays the invoice, the lender deducts the financed amount and any additional fees and interest. The business owner then receives the difference, and the transaction is complete. Who Purchase Order Financing Is Best For Purchase order financing is one of the best ways to finance growth for your business, especially in these types of situations: Small businesses with spikes in demand: If your business signed a new distributor and demand for your product spiked, PO financing makes a lot of sense. Businesses with reliable suppliers: The more experienced and reliable your supplier is, the more likely you’ll get funding. This can free up capital for other investments in the business. Startups seeking to fuel growth: Taking advantage of PO financing can be a lower-cost way to fuel growth while meeting customer demand. Companies wanting to reduce capital in shipping: Businesses using overseas suppliers often pay for goods long before they can invoice a customer. By financing your purchase orders, you can use your capital to invest in other parts of your business instead of having it tied up in an order. How We Evaluated Purchase Order Financing Companies The criteria we used to evaluate purchase order financing companies for businesses include: Industry experience: When your business uses purchase order funding for inventory, you’re entrusting the financing company with the relationship of your supplier and customer. Loan amount: Your business should have the flexibility to fulfill its orders without having to work with additional lenders. Rates and fees: Most PO financing companies charge rates based on how long the invoice is outstanding. Minimum qualifications: PO financing companies look closely at the creditworthiness of your suppliers and customers as well as your profit margins. Unlike traditional business loans, your personal credit score isn’t a major factor. Funding terms: Your customers repay the purchase order financing when they settle the invoice. This means that most financing companies will restrict the number of days the total transaction can take to 90 days, which includes manufacturing and shipping. Funding speed: Every purchase order funding company we reviewed offers funding in one to two weeks. Lenders conduct due diligence on your business, your suppliers, and your customers before approval. Experienced lenders may be able to reduce that time because they have experience working with your suppliers. Based on the criteria outlined, we feel confident recommending as the best overall purchase order financing company because of their longer terms of repayment, ability to work with smaller and mid-sized businesses, and competitive rates. Bottom Line Businesses that need capital to pay a supplier utilize purchase order financing to help fulfill those orders. Companies of varying sizes and industries can take advantage of purchase order financing to advance capital, ensuring orders get fulfilled and the business can grow. The purchase order financing companies we have recommended here are all excellent choices for helping your business out.