A Line of Credit... Just in Case
There are two types of SBA Loan programs available to small businesses and nonprofits affected by Covid-19 under the CARES Act Fiscal Stimulus Package. The Paycheck Protection Program (PPP) and The SBA’s Economic Injury Disaster Loan. The below summarizes the details of the SBA’s Economic Injury Disaster Loan Program. We will summarize the Paycheck Protection […]
Small businesses that are looking for payroll funding to make payroll, used to not have many options. Commercial banks don’t move fast enough and Factors take even longer. However, if you are looking for a fast line of credit for payroll funding then Financing Solutions line of credit can be in place in 48 hours. […]
To start a small business, you begin with your own ambitions and vision but in order to keep being successful, you may want a business line with no personal guarantees. Financing Solutions provides business lines with no personal guarantees or in other words, a business line of credit. The line requires no collateral, no personal […]
Nonprofit board members have an important responsibility. Your organization expects you to oversee its activities, maintain adherence to bylaws and keep track of the financial condition. But should the same board member loan money to their nonprofit organization as well? As a board member, you want your nonprofit to succeed. Therefore, when there is a […]
If you have ever sweated out the fear of missing payroll for your business, you are aware that time is of the essence. There are not many funding options available to choose from, other than using credit cards or funding money from a rich relative. However, if you have ever turned to a factor , […]
Missing payroll is probably one of the most stressful events in a business owner’s life. When speaking to a business owner about it, the stories they often tell revolve around a time in their life when they lost a great amount of sleep. Having to miss payroll disrupts relationships between a business owner and their […]
You’re about to miss payroll and you start looking for a quick line of credit by typing payroll funding company in Google. Whether it’s a client payment (or payments) that are late or an unexpected business expense that came up; you’re afraid of sending shock waves through your company by missing payroll. Telling your employees […]
Personal guarantees are a financing tool designed to reduce the risk to a lender if a borrower defaults on a loan or line of credit. As with all things related to risk, personal guarantees don’t eliminate it. They merely shift it from one party to another. In this case, the risk shifts from the lender to the person signing the guarantee.
The crux of the agreement is that the person signing the guarantee, called the guarantor, will pay the lender an agreed-upon amount no greater than the outstanding amount of the loan or line of credit if the borrower defaults.
For various reasons, people tend not to want to be guarantors for a business loan or line of credit. Continue reading to see some of the risks involved in signing as a personal guarantor.
Many businesses without lines of credit don’t think about obtaining one until it’s almost or already too late. They wait until they’re short on payday, their creditors are calling, or they’re unable to meet their obligations due to not enough revenue or a lack of cash flow.
So how does having a business line of credit avoid getting into this situation? The keyword when it comes to planning for a credit line is “prepare.” Be ready before you get into trouble, before you have cash flow and funding problems, and before you run into a shortfall. All of these are great times to consider getting a business line of credit. Because, when the time comes, you might not be able to arrange a credit line to get you out of a jam and cover necessary business expenses.
So you’ve gone to one bank and credit union after another looking for a line of credit for your nonprofit and they’ve all turned you down. You don’t understand why. Your financials are in great shape. Your board is responsible and qualified. Your management is top-notch. Plus, you’ve been around for forever and a day.
The truth is that it probably isn’t your fault. Banks and credit unions are extremely hesitant to extend lines of credit or loans to nonprofits for a number of reasons. Keep reading to find out why and what you can do about it.
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