Different debt products

Ryan Chen
January 08, 2025

Hi there,

Welcome to Loancater’s weekly newsletter. This is approximately a 4-minute read.

In today's newsletter, we’re going to go over the different types of funding you get, their requirements, their rates, and why people use it

We are going to go over…

Merchant Cash Advances
Commercial Real Estate Cash Out Refinances / Purchases
Commercial Real Estate Bridge
Equipment Financing / Leasebacks
0% Interest Credit Cards
SBAs
Lines Of Credit

Schedule a FREE strategy session with us here for a business loan.

Merchant Cash Advances

This instrument has an annualized rate of 30-50% with funding sizes from 5k - 2M. The requirements are 550+ credit and a business that has been around for over 6 months as well as no previous defaults. They are paid back daily, weekly, and sometimes monthly with closing time in 24-48 hours.. The reason why business owners take these products is because they are quick and have lenient underwriting. A last minute payroll is a prime example.

CRE Cash Out Refinances / Purchase

This is a form of asset back lending with terms typical between 7-30 years with rates floating or fixed at the range of 8-13%. They are paid back monthly and require and can close in as quick as 30 days. The requirement is to either have a real estate asset(for a refinance) or 25% of the purchase price(for a purchase). Business owners take these loans to get working capital or to buy new real estate.

Commercial Real Estate Bridge

This is similar to the above except the term is shortened to 12-36 months and the payment schedule could potentially be weekly. The closing time is 2 weeks.

Equipment Financing / Leasebacks

This is used to purchase heavy machinery like a bulldozer or backhoe or anything that is movable. The leaseback is just a way to get a loan by using the equipment as collateral. Rates are typically 11-18% and terms are 12 - 60 months.The requirement is to have either 35% for the down payment or any machinery that is movable you already own. The closing time is 2 weeks. Business owners use these products to expand their investment in house or to get working capital.

0% Interest Credit Cards

This credit card is 0% for only the first 7-12 months. Rates are then 12-23% variable. Requirements are to have 700+ credit, no missing payments, sub 30% utilization and under 5 inquiries. These funds are as quick as the first 30 days.

SBAs

This is a 10 or 25 year note depending on whether you get the 7a or 504 with rates at 3% above prime. Closing time is 3 months and the requirement is to have collateral to cover the loan, 680+ credit, and a profitable business or a plan to become profitable. The SBA would have to approve the issuing bank request to issue the loan and they guarantee 75% of the bank potential loss. Often used for purchasing a business or restructuring debt, it can also less commonly be used purely for working capital.

Lines Of Credit

This product is self explanatory and the rates and terms vary depending on if you get this from a private credit or a bank. The problem with a credit line is that when you really need it and the bank senses you're in trouble they will close it. Stress tests these lines often if you have to call someone manually to borrow by calling it to see if you can withdraw that amount or if they have to ask the reason why. (if they ask if the credit line is not real). If it’s through an automatic portal and you connect your main bank account through that platform then you will want to check in periodically.

How I Can Help You

If you like this newsletter and want to work with me, there are a few ways we can do so:

You can apply for a business loan here (link)
You can apply for credit repair by emailing [email protected] “I want credit repair”
You can apply for a free 30 minute strategy session for credit card processing & ACH here (link)
You can refer clients to me. Any clients you refer to that close we will pay you 10% of the gross margin on the transaction.

Or, you can reply to this email.

I reply to absolutely everyone.