When SBA funding, and line of credit funding is not available, term loan options are available with certain lenders using a business owners personal credit to obtain a term loan for the business. This is perfect for people with irregular cashflows such as an injury attorney needing working capital or someone wanting to buy a company for under $250,000 where SBA would not be available.
This program does not consider business income. When we are reviewing a business owner for the Unsecured Loan program, we need to review 2 years of theclient’s personal tax returns to determine their AGI. They must have owned the same business for 2+ years
The program requires a minimum credit score of 700+ on all credit bureaus. Most lenders now require a 720 credit score. A client with a 699 credit score will not be eligible for the program. A minimum of 3 – 4 major credit cards are required, preferably less than 25%utilization with a 3-year repayment history. -No bankruptcy or foreclosures in the last 10 years-No short sales, charge-offs, or settled accounts in the last 7 years-Collections and child support delinquency must be paid before funding can take place-No Multiple Late Payments.
Pre-qualification is within three business days after we receive the information necessary to complete a soft credit pull. Funding is typically complete within 30 days. Some clients can get
through the program faster. Speed of funding will depend, to some extent, on how quickly clients reply to requests from our processors or lenders. Larger funding amounts may take up to 45 days.
The Unsecured Bank Loan program provides term loans, not lines of credit. A general rule of thumb for loan amounts is no more than double the annual income. The maximum DTI is 36% for all lenders with one exception. One lender does allow a higher DTI however, their rates will be higher. Loans will appear on the client’s personal credit report, with the exception of one lender. The program provides loans that will be deposited into the client’s bank account.
The rates typically range between 8.5% – 14%. Terms are 5 – 12 Years. Lenders are selected based on the client’s overall credit profile.
There is a 10% fee charged to the borrower on the program. This fee is the cost of doing this unsecured. Once again, the program is based on their personal credit, income, and debt. We can not use business income, business bank statements, or other business assets in determining loan amounts.