What is an investor term loan and how is it different from a standard term loan?
An investor term loan is a private lender who has their own proprietary underwriting process. Different private lenders like different types of industries and each private lender has their own approach to how they look at a business.
How does it work?
For investors, we typically need to collect the prior and current year P&L and Balance Sheets, 6 months of bank statements, and an Executive Summary. We can always help the business owner with the Executive Summary if needed.
Rates can be anywhere from 8% – 27% simple interest, monthly payment, and the terms are typically 1-5 years.
How long does it take?
The entire process from submission to fund is about 2 weeks for deals under $500,000, more complex structured debt in the millions can take up to 30 days.
Who does this make sense for?
Investor loans are great because they make sense for anyone. Some of the key points which make them attractive are that you can have a FICO score under 630, unfiled tax returns, and be 1 year out of bankruptcy.
How do I know if I qualify?
We will setup a call with the investor to review the previous year and current year profit and loss and balance sheet, the business will need to show profitability.