sales Archives • Small Business

Business Sales Loan. Definition of a business sales loan or loan based on sales.

For a Sales loan or business loan against sales, Small Business Loans Depot offers niche sales loan and business loan against sales financing based on the Gross Sales of the Business. The vast majority of businesses have sales and will pre qualify. The funds can be used for any purpose, marketing, advertising, inventory, expansion, additional employees, cash flow, any reason. Did you know you could find a lender that could give your business a loan against it’s sales? Go to our features and benefits section or call to quickly learn how this program can solve your company’s cash flow needs quickly and effectively.

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Please get this info back to me and then we will look to put together an offer and term sheet on Friday.

To qualify for this sales loan, or business loan against sales, businesses provide their last 6 months complete business checking account statements. They then complete the one page application. A business also has the option of providing the most recent year’s business tax return, for which a higher amount may be obtained. If the total monthly deposits are high, the final approval may be higher. The customer can choose from 3 to 18 month repayment terms, though 6 to 12 months are the most frequent approval terms. The majority of approvals allow the customer to decide which of these options they want.

FAQ’s, Frequently asked Questions:

What is a Sales loan?

Funding amounts for this sales loan as well as business loan against sales range from $5,000 to $250,000. Up to 125% of the total dollar amount of monthly deposits can be approved. If the customer deposits $10,000 per month, up to $12,500 can be approved. Approvals are generally obtained in 1 to 3 business days.

If the company’s beginning and ending balances, especially average daily balance, are high, the final approval amount tends to be higher. Should the customer have more than one business account, then statements for both accounts should be submitted. Providing statements for more than one account will get the highest amount approved. Seasonal businesses should submit the most recent 12 months business checking account statements.

As an example, a snow plowing business is highly seasonal with at least 3 or 4 months in the winter being the highest volumes. Instead of a lower approval amount or denial, provide the last 12 months statements for the highest chance of approval and highest approval amount.

How can I increase business sales?

Use like a line of Credit. This Sales loan, or business loan against sales is basically a line of credit that the customer uses at their discretion. Since the most common loan terms are 3, 4, 6 and 9 months, this sales loan and business loan against sales product is used as a bridge loan in most cases. If the customer is approved for $100,000, they can use the full $100,000, or they can choose to use $50,000 initially, then another $50,000 in a second take down. Once the line has been repaid, it can be used again immediately by the business, or left dormant for months, then used again.

Periodic Line Size Increases. Upon continued usage, the line size is increased over time. Existing customers are the most preferred. Better deals are not given to new customers. A customer that is doing a second or third renewal will always receive a higher line size than an initial customer. After a few renewals, the credit line is often 100% or 200% higher than the original approved line.

Line not shown on individual credit report. This Sales loan, or business loan against sales is not listed on the individual’s personal credit file. business credit is established with the primary business credit bureau agencies such as Experian business credit report, Dun and Bradstreet and Paynet.

Features of a sales loan or business loan against sales product include:

No advance payment fees or application fees. Low credit score is accepted. Credit scores below 500 can be approved.
No restrictions on how the working capital is used. No collateral is required. This is an unsecured transaction.
Complex and difficult transactions routinely done Quick and Easy application process
The entire process take only five to eight business days

What are the credit criteria looked at for this Sales loan, or business loan based on sales?

The average daily balance.

Dollar amount of Monthly deposits.

Ending bank balances

Business checking account beginning balances.

Gross income Flat or increasing Gross Sales from year to year.

Net income. It is also expected that Net income figures will be relatively flat or increasing from one year to the next.

Overdrafts. The bank statements are analyzed for the total number of overdrafts and NSF instances. 5 is the maximum.

Businesses have long looked for financing based on Sales, rather than requiring excellent credit, collateral and financial statements. A Gross Sales Loan is available now. Funding ranges from $5,000 to $250,000 with a fast turnaround. Upon approval, funding can take place within 1 business days. 4 months time in business and a 500 or higher credit score is required. In some instances, the credit score can be below 500. What is a Gross Sales Loan?

Features and benefits

Only 3 months in business required and credit scores below 500 accepted are also accepted.

Complete the Secure DocuSign 30 Second Application now
Or call us at Tel: 1-919-771-4177, or Questions?

This loan is set up in practice in similar fashion to a line of credit. Your business decides how much in funds are wired into your business checking account. The customer is approved for $50,000. 50,000 is then wired into the customer’s account within 1 – 3 business days after approval. Upon repayment, the customer can renew the line for another round of funding.

Frequently asked questions:

Question: We have 2 major business checking accounts with significant balances. Can we combine the two accounts to get a much larger line size?

Answer: Rather than do 1 large line size for 2 accounts, we can establish 1 line for each account. This allows your business to accommodate the cash flow needs for each account. It also prevents the business from overextending it’s available cash flow from 1 account.

Question: Our Sales went down from the previous year to the current year. Will that hurt our chances?

Answer: Your business still has an excellent chance of getting an offer. We will look at the most recent three to six months of gross sales to determine what the approval amount will be. If your sales in the most recent three to six months went down dramatically from month to month, then the approval amount for the loan based on gross sales may be lower than if the sales had been steady. Higher sales in the last three months will give you a higher offer.

Question: After we pay it off, do we have to re-apply again from scratch?

Answer: You only provide updated statements for the last 3 months to renew. Funds are wired into your business checking account at closing.

Question: Are financials or collateral required?

Answer: Collateral and financials are not required to qualify. Depending upon the amount of the approval and the customer’s requested amount, the customer can choose to provide financial statements in order to qualify for an even higher possible amount.

Question: What if I don’t use the line?

Answer: Nothing happens. Submit the most recent statements when your business needs funding again.

Sample Gross Sales Loan Transaction:

Magic Muffers in Doraville, Georgia needs $30,000 in working capital. They did not qualify for other types of loans and another bank declined them for a property loan.

Magic Muffler has $450,000 on sales per year. They apply for a Gross Sales Loan and complete a one page application. The company also submits their last 6 months business checking account statements.

The approval for Magic Muffler is for $35,000. The customer wishes to proceed and gets the loan documents in their E-Mail. They fax back the completed loan documents. The paperwork is reviewed and a final verbal verification of the transaction is completed with the customer.

Funds are wired to the customer’s account within 24 hours.