FAQs
Most frequent questions and answers
Are the rates variable or fixed?
Both. You can find either Fixed or Variable Annual Percentage Rate (APR) Term Loans.
What are the payment terms?
The payments are made monthly and can range from 1 year in term to max
10 years.
Are business term loans unsecured on secured?
A Business Term Loan is generally unsecured against personal assets, yet average business term loan does encompass the business’s total assets.
UW decision making what do I need to be prepared for?
1.Profitability we will look at your global cash flow business and personal to make certain you are in the approved debt ratios vs reported profit.
2. Credit of good quality (business and personal scores) matter as well as being clean of liens of judgements
Items typically needed to apply?
Previous year of bank and merchant processing statements (if applicable), two previous years business and personal tax returns. Also 2 years prior financials on the business, a debt schedule, and personal financial statement will all be required.
What type of Construction Invoices do you Factor?
We finance invoices in two installments: the advance and the rebate, meaning we will advance a portion in the prepayment phase then once the total invoice has been paid we will remit the balance.
How long does it take for funding once approved?
The capital is provided right after you submit the invoice for financing. The typical range from 70% to 80% of the face value of the invoice, less any retainage amounts. The funds are either wired or sent via ACH to your business checking account. The rebate is deposited to your account once your commercial client or GC pays the invoice, on their regular schedule. The rebate consists of the remaining 20% to 30%, less the factoring fee.
I am a General Contractor (GC), can I apply?
You must be a subcontractor. We cannot finance general contractors directly. GC please seek out our Accounts Receivables financing options.
Is it mandatory that I and the GC are bonded?
You must not have a bond for the project (though your GC may be bonded).
What if there is a lien on my receivables?
Your receivables must be free of liens.
What if I have a few IRS or State Tax issues being resolved at the time?
Your company must not have major legal or tax problems.
What if I am on my first construction job can start ups apply?
You must have experience in the construction industry.
What is Capital Lease / Finance Lease / $1 Buyout?
Sometimes also referred to as a nominal or ($1) dollar-buyout lease. These leases share the advantage of fixed monthly payments, yet while locking in a price to purchase the equipment at a set time.
What is a Sale/Leaseback?
Sale/Leaseback provides financing using your current equipment as collateral.
What are True Lease or Operating Lease (also known as fair market value
leases)?
The most notable feature of this type of lease great for lowering cost and exposure. The term typically knocks a quarter of the time off of the term. These equipment leases take a better accounting of the true market value of the equipment.
What are “P.U.T.” Option Lease (Purchase upon Termination)?
These leases are best for protection to secure your price at the end of the term, limiting your exposure and cost.
What is TRAC Lease?
A TRAC lease is a special type of true lease that is generally used for typically building and construction equipment vehicles like trucks, tractors and trailers. Like Caterpillar or John Deere.
Are there any time in business (TIB) requirements?
Yes, minimum 1 year TIB is required.
What of this is my very first sale to the market?
It is not limited to but it is best if your business has experience and previous transactions with client or other similar clients.
Will you look at any size deal?
Exceptions can be made yet our standard goal is for $100,000 transaction minimum.
What is most important: our credit or our clients?
Your client must be credit worthy and have provided a viable purchase order that meets the standard.
Must it only be a purchase order (PO) to finance?
We are flexible and can at times work with a Letter of Credit.
Must I be profitable or will you fund me if I am operating at a loss?
Your profit margins must be a minimum of 25%.
Can I obtain funding for my international businesses as well?
The business has to be located in the USA.
When can I submit an invoice for financing?
Once you have delivered your goods to your client and have received
their invoice.
What percentage of my invoice can I finance?
The highest end of the range is up to 90% of the eligible invoice to
you, yet 85% of the invoice is the norm.
Who makes sure that customer pays on time?
Internally that is handled in-house by the invoice management team, allowing you to focus on other areas of your business. We will make certain that your customer pays according to your invoice terms.
Once they pay how long does it take to release the remainder of the
invoice?
Right after we receive the final customer payment, the remaining balance will be released to you, minus fees and cost of capital.
What is the minimum value of Inventory you will consider?
Need a minimum of $500,000 in financing although over $1,000,000 is the
prefered norm.
How detailed do my inventory and its levels need to be reported?
You must have inventory management system with perpetual inventory. We will test your inventory system and appraise your raw materials and inventory.
Is this about my inventory levels?
No. You must also have reliable financial statements and we will check your accounting.
Are there up front soft costs?
Some of these functions are conducted by third parties who must travel to your plant or warehouse. Initial costs vary based on the size of the facility and the complexity of the line. Additionally, the financing company will need to monitor your inventory regularly, usually every 3 to 6 months. These examinations add to the maintenance cost of the line.This is the main reason we recommend you exhaust other financing options first.
Can I apply while still in route to deliver in order to take on more work?
No. In order for Freight Factoring to start off, first deliver the freight load to your customer.
Do I just send the invoice to you or bill my client directly?
Simultaneously if possible send the freight bill to your end user customer and the invoice to our UW team to start the process.
How soon can I have funds once I am approved?
Once approved you will soon after either receive a wire or an ACH deposit. Within 24-48 hours.
What is the term of that financing?
Once your client pays us back (minus the advance), then that transaction
is completed.
What is the max percentage of my invoice you would advance?
95% is the max we have ever done under rare cases.
Will I be guaranteed approval by the bank that Troy Business Groupintroduces me to via the Troy SBB network?
No. Neither Troy or our bankers can make that claim. Once you are advised of that specific bank requirements and you apply, it is solely up to the banks underwriting and credit committee if you are approved.
Will Troy Business Groupbe compensated by the bank or the Small Business Banker for my loan or line of credit?
No Troy is simply making an introduction under rare conditions some of our banks allow Troy and our client we referred to come to an agreed upon consulting fee. Which first off our customer must agree and then it can only be paid from their proceeds at their complete discretion. Our SBBs offer zero compensation, they are there to bridge the gap and walk a Troy referred client directly to the bank underwriting department.