15 questions
Can loan fees reduce the amount my business receives?
Yes. Some fees may be deducted from the advance rather than paid separately. Compare the net amount received with all repayments and charges. A stated loan amount is not necessarily the cash available for your purchase.
Link to this answer ↗Is a factor rate the same as an interest rate?
No. A factor rate is commonly used to calculate a repayment amount, while an interest rate is expressed in a different way. Neither should be compared without the term, payment timing and fees. Ask for an annualized comparison where available.
Link to this answer ↗How do weekly repayments affect business cash flow?
Weekly payments create a different cash requirement from monthly installments. Compare the due dates with customer receipts and ordinary operating expenses. Do not judge affordability only by dividing an annual total into twelve months.
Link to this answer ↗Can a business line of credit charge for unused funds?
Some facilities include maintenance, commitment or unused-line charges. Others charge primarily when money is drawn. Read the fee schedule and ask how a quiet month is billed as well as a fully used month.
Link to this answer ↗Does every credit-line draw have a separate repayment term?
Structures vary. A draw may have its own repayment schedule or form part of a revolving balance. Ask how new borrowing affects existing payments and whether repaid amounts become available to borrow again.
Link to this answer ↗Can used business equipment qualify for financing?
Some lenders finance used equipment, subject to their age, condition, value and seller requirements. Provide the machine details early. A lower purchase price does not automatically mean the same financing term as new equipment.
Link to this answer ↗Can installation charges be financed with equipment?
Ask the lender to identify eligible costs on the supplier’s itemized invoice. Delivery, installation, taxes or initial software may be treated differently. Do not assume the whole project is covered because the equipment itself qualifies.
Link to this answer ↗What is a balloon payment on a business loan?
It is a larger payment due at the end of the agreed schedule. Include it in the affordability comparison from the start. A low regular installment can conceal a substantial final obligation that still needs funding.
Link to this answer ↗Does early repayment always save money?
No. Savings depend on how charges are calculated and whether prepayment fees or fixed repayment obligations apply. Ask for the payoff amount at several dates before signing, rather than assuming every unused month eliminates interest.
Link to this answer ↗Can a lender require a personal guarantee?
Yes, depending on the product and underwriting. A personal guarantee can create obligations beyond the business itself. Review its scope and consequences with an appropriate adviser before accepting; limited liability status does not automatically remove it.
Link to this answer ↗What is a blanket lien in business financing?
It can give a lender a security interest across a broad range of business assets, rather than only one purchased machine. Ask exactly which assets are covered and how the lien affects future borrowing or asset sales.
Link to this answer ↗Can I compare financing before selecting an equipment supplier?
You can explore likely requirements, but a final equipment financing decision may need the actual invoice and machine details. Get a cash price from suppliers first so you can compare the product cost independently from financing.
Link to this answer ↗Can a seasonal business request a different payment schedule?
Some lenders offer structures suited to uneven revenue, but availability and cost vary. Provide realistic seasonal cash-flow information and ask for the complete schedule. Do not assume a standard loan allows skipped or reduced payments.
Link to this answer ↗Does an SBA guarantee mean my business is guaranteed approval?
No. An SBA guarantee supports the participating lender; it does not promise that every applicant will qualify. The business must meet applicable program requirements and the lender’s underwriting conditions.
Link to this answer ↗What should I compare before renewing a business credit line?
Review the new rate, fees, limit, security requirements and whether renewal involves a review or payoff. Confirm that access to unused credit continues. A renewal should be assessed as a financing decision, not assumed to be automatic.
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