Frequently asked questions

Financing

Alternative lending is any type of financing that falls outside of the traditional banks and credit union lending. Alternative lending can be a good option for businesses that do not qualify for a traditional loan or can’t find favorable terms.

Alternative lenders typically have a faster application process and thus faster funding than traditional lenders. Some lenders provide same-day or next-day financing. However, this can come with a higher price. Alternative lenders also require lesser documentation than traditional lenders, but interest rates and APR are generally higher compared to traditional lenders. Alternative lenders often offer more flexible terms and may be better for startups, businesses with bad credit, and businesses in need of small loans.

It is possible, but applicants with low credit scores may have a harder time getting approved for traditional loans. Small business owners with bad credit scores as low as 580 typically can only access loans with higher interest rates. They must also demonstrate strong stable cash flow to qualify for a business loan, and lenders may require collateral. For these reasons, alternative forms of financing may be a better option.

This is also possible with some lenders that specialize in serving business applicants with bad credit. Still, these loans often come with higher interest rates and other fees. One favorable option is to consider alternatives like a secured credit card.

A hard money loan is a short-term financing option that typically mandates the borrower to provide an asset, such as a home, as collateral to secure the loan.

No. Hard money loans are only offered by private and hard money lenders.

Hard money loans can be used for house flipping, which is a real estate investment strategy where an investor acquires a foreclosed or distressed property, fixes it, and then sells it for a profit. The purchased property can also be fixed and used for rental purposes, serving as an investment for passive income. Additionally, hard money loans can be used to acquire commercial property when the borrower does not qualify for a conventional loan.

Typically, individuals with a FICO score of 620 or above are likely to be approved for hard money real estate investment financing, and those with a score of 720 or higher may qualify for the lender’s best rate. The minimum FICO score required is 500.

Dropshipping

Read 43 Most Popular Question About Dropshipping

 

Yes. You will pay the actual cost of stocking, picking, packaging and shipping the Items, along with other overhead expenses and a huge mark-up.

Yes, you can under certain  conditions. If you own the items prior to listing or have an Agreement with a wholesale supplier to list and sell their items. A user Agreement from Another retailer or marketplace does not fulfill this requirement.

Drop shipping (ebay.com)

Turnkey Dropshipping Store

A turnkey dropshipping store is basically a business ready to use the moment you get it in your hands. It normally comes with the products and has all the apps and integrations to start selling online as soon as you get ownership of it.

The primary benefit of owning a turnkey dropshipping store is that it gives you the opportunity to get into ecommerce business by owning your own pre-loaded store and offers you the path to passive income.

You also save time and money, since most of the work has been done for you by the provider, instead of you trying to figure it all on your own.

You can search online for providers that sell pre-loaded Shopify and Etsy stores, ebay Amazon FBA and Amazon Affiliate stores.

Cost may range from few hundred dollars, up to about a thousand, depending on the amount of inventory that is pre-loaded on the website and additional services, if any, that the seller provides. However, buying stores like Amazon FBA, Amazon Associates, Amazon Affiliate and ebay can be quite expensive, over six figures or in the millions of dollars.

It’s possible to get an SBA 7(a) loan to purchase an ecommerce business, but the requirements are lengthy and a good FICO store 690+ are required, among other things. The process may take 60 to 90 days for SBA 7(a) loan, although SBA 7(a) Small loan takes 2-5 business days.

Yes. There are alternative lenders that specifically caters to ecommerce businesses for this purpose. Besides using your working capital loan to purchase inventory, you can also use it for advertising, marketing, etc.

Professional Fee/Success Fee

We do not charge any fee if a lender that we have a relationship with agrees to pay us a referral fee for each application that we streamlined and submitted.

However, in situations where our relationship with that lender does not include the payment of a referral fee, we assess a reasonable Success fee upon loan approval. In this case, a fee of $299 will be due and payable to the service provider.

This is stated in the Agreement. No fee is charged if your application is declined.

We will notify you after we review your pre-application, prior to submitting it to one of the lenders, accordingly. Whether the fee is applicable to you or not will depend on the type of relationship we have with the lender to whom we refer your pre-application.

Fix and Flip Loans

In general, loan amounts range from $50,000 to $3,000,000. Very few lenders entertain loans less than $50,000. In select high-value markets such as Los Angeles, San Francisco, New York City, Austin, Miami, and other areas, some lenders may consider loans up to $7,000,000.

Up to 90%. A small number of lenders will consider financing 100% of the purchase. Most lenders max out at 85%

10% to 20%.Most lenders require a down payment of 15%. Only a few lenders will consider 0% down

Up to 70%. Most lenders max out at 65%. Some lenders go up to 75%

100% of rehab costs are typically covered by most lenders, with the funds for the entire rehab budget being provided and controlled by the lender. However, a small percentage of lenders may require investors to contribute to the rehab costs, and this is more common in commercial real estate value-add projects.

The loan term is 12 months, with an option to extend up to 3 years, featuring an interest-only payment structure. This implies that you are required to make monthly payments covering only the interest costs throughout the entire term. Upon the conclusion of the payment term, a balloon payment must be made to settle the remaining balance.

7.5% to 13%. Most fix and flip loans have an interest rate of 9%

1 to 3 points. Most lenders charge 2 points.

(a)Rehab budget – Investor has to present document or spreadsheet showing all the work that needs to be done and how much it will cost.

(b) Contractor readiness – must be ready to work.

(c) Sufficient Cash Reserves – in case project goes over budget or takes longer to sell.

(d) Experience – Most lenders require investors to have done 1 complete flip project in the past 2 years. Some lenders don’t require any experience but will ask for a higher down payment and higher reserves. Without experience, they will only consider “light” rehab.

(e) Minimum Credit Score – 500. Most of the national lenders require 620+ FICO score. Many of the local or regional lenders don’t care about the score but will run a credit report, even if they don’t care about credit score.

Single Family residence, Condominiums, Townhome, Duplex (2 residential units), Triplex (3 residential units), Fourplex (4 residential units)

Long-Term Residential Loans

$75,000 to $2,000,000

Up to 80% for value-add projects

Up to 30 years (some lenders offer 5, 7, or 10 years term)

SBA 7(a) LOANS

The SBA 7(a) loan is the principal loan program offered by the Small Business Administration (SBA) for small businesses in the United States. It is primarily administered by banks, along with a limited number of non-bank lenders, that actively participate in the SBA lending programs.

Ecommerce

Is a fulfillment service that allows businesses to use Amazon to store, pick, pack, and ship customer orders.

Most Amazon FBA start-up businesses would like to start with $2,500 to $3,000 in stock; although, many start with as little as $500, to avoid taking a risk.

This depends on your sales, quality of products as well as price point. According to JungleScout, about 50% of Amazon sellers make an annual average profit of $12,000 to $300,000.

No, you don’t have to be a registered business to sell on Amazon. However, having a registered business provides you with the opportunity to separate your personal financial liabilities from business liabilities. This registration may also shield you from potential legal consequences that could arise from creditors during the course of doing business.