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Unraveling the Power of Equipment Financing: A Comprehensive Guide

As the engine of a successful business continues to roar, understanding the facets of commercial equipment financing is critical for both seasoned business owners and aspiring entrepreneurs. One integral element that stands out in this arena is equipment financing, a unique and flexible financial tool that can propel businesses to new heights.

What is Financing?

It’s providing funds for business activities, making purchases, or investing. Financial institutions such as banks, credit unions, and finance companies provide these funds, which may come in the form of loans, leases, or hybrid loans known as Equipment Finance Agreements (EFAs).

Commercial vs. Personal

There’s a significant distinction between commercial and personal financing. Personal involves managing personal monetary affairs, including saving, investing, and budgeting for individual or family needs. It usually revolves around acquiring personal assets like homes, cars, or funding personal expenses or investments.

On the other hand, commercial is the allocation of loans and other forms of financial support to businesses. It covers an array of financing types, such as equipment, commercial real estate loans, business lines of credit, and more. Commercial finance focuses on bolstering a business’s operations, growth, or asset acquisition.

A Valuable Business Tool

Equipment financing, our prime focus, is a powerful commercial financing method that enables businesses to purchase or lease the equipment they need without shelling out substantial upfront costs. This method offers a way to secure advanced machinery, technology, or other business-essential equipment while preserving cash flow.

Benefits of Equipment Financing versus Cash

  1. Cash Flow Conservation: By financing equipment, businesses can preserve their cash for other crucial operations or unexpected expenses.
  2. Up-to-Date Equipment: Given the pace of technological advancement, equipment can become obsolete quickly. Financing provides the flexibility to upgrade as needed.
  3. Tax Advantages: Under Section 179 of the IRS Tax Code, businesses can deduct the full purchase price of qualifying financed or leased equipment in the acquisition year.
  4. Easier Budgeting: financing involves fixed monthly payments, helping businesses plan and manage budgets effectively.Check out more benefits here

Countering Common Misconceptions about Financing

Despite its numerous benefits, some misconceptions might deter businesses from considering equipment financing.

  1. Misconception: Financing is too expensive. Contrarily, with competitive interest rates and potential tax benefits, equipment financing can often be more cost-effective than upfront cash purchases.
  2. Misconception: My business won’t qualify. Many businesses, including startups and those with less-than-perfect credit, can qualify for equipment financing. Lenders consider various factors, not just credit scores.
  3. Misconception: The application process is complicated. While some financial tools can involve complex procedures, many lenders streamline their processes to provide swift and straightforward financing solutions.

In a competitive business landscape, effective financial management is key to sustainability and growth. Through financing, businesses can unlock potential, harnessing the power of advanced equipment while maintaining robust financial health. Don’t let misconceptions hold back your business’s growth—explore the possibilities that financing can offer today.

If you’re interested in learning more, we are always happy to chat with you; or you’re welcome explore our website and other blog topics. Ready to purchase? Fill out our no-obligation application!

Keywords: Equipment Financing, Commercial Financing, Personal Financing, Loans, Leases, Equipment Finance Agreements (EFAs)

5 Business Traps that Every Business Owner Must Avoid

 

There is nothing automatic about success in business. Even if you have a great deal of automation built into your business and its processes, there are always dangers lurking around the corner. 

 

Sometimes the traps are right there, at the foundation of the business, and others pop up later.

 

Regardless, here is a short list of items to avoid:

 

Business Trap #1 – A business that can’t “run” without you. 

Let’s say you started your own business. Congratulations, you are one of the 627,000 people each year who make the jump to doing so. But how many of those 627,000 individuals actually pay close attention to scale? 

 

Whether you own the business or the business ends up owning you often comes down to whether or not you have created a business that can succeed without you. 

 

If you haven’t then you are likely still trading time for money; and that’s not the definition of the American dream, is it?

 

The real key to owning a successful business is setting up systems and processes that allow the business to run without you.

 

Business Trap #2 – You don’t have a business development process.

Some businesses start out of the gate with tons of business, and the owner is sent scrambling to find help to serve customers. And yes, that is a good problem to have. 

 

But beware: if you don’t have a steady stream of new customers to replace the inevitable churn, you may find yourself OUT of business shortly. 

 

And often this doesn’t result from demand as much as awareness. You can’t assume that your ideal customer is going to show up and buy your product or services. There is a process for acquiring customers and it is impacted by Marketing, Sales and Operations. And despite what you may be hoping for—yes—it takes money to make money. So you will need to invest budget in the process of acquiring customers to overcome churn. Neglect this, and you may be out of business soon. And the statistics bare this out. More than 595,000 businesses close each year. Now, not all of that is caused by a lack of income due to a failed business development system, but you can be sure many are.

 

Business Trap #3 – Failing to recognize industry trends.

The invention of the light bulb didn’t exactly do wonders for the candle industry. Nor did the invention of the automobile stabilize the horse and carriage industry. It’s true there are some industries that are harder to disrupt than others. Remember when navigational devices like the Garmin and the TomTom seemed like a sure thing, until the iPhone (and other smartphones) made Maps software ubiquitous? 

 

A business owner doesn’t need to constantly look over the shoulder. But when industry trends—and possible disruptions—present themselves, it’s best not to ignore them. 

 

Being able to adapt your business to the coming trends is always better than being too late to the game. In the mid-2000s, book publishers that embraced the trend of digital platforms and eBooks did better than those who held out and therefore failed to monetize the digital publishing market.

 

Business Trap #4 – You fail to watch cashflow.

Simply put, cash flow problems can force business owners into bad decisions. Cash flow measures the ability of the company to pay its bills. The cash balance is the cash received minus the cash paid out during the time period.  This is where things can get tricky with cash flow management.

 

Up to 82% of business failures are due to poor cash management. A myriad of business strategies can affect (and also be affected) by cash flow. Pricing, hiring necessary personnel, and spending are all factors that impact cash flow. 

 

Having cash flow problems makes it harder to take advantage of opportunities that come your way.

 

Business Trap #5 – You still bootstrap when it’s time to finance. 

Perhaps you have been a cash-strapped business thus far. You only spend what you take home in profit. And many times, that is the wise decision. But there is a point at which the ability to grow to the next level can only come with funding or financing. 


True story: One business owner started a company that seven years later gave him a $4 million exit. He never borrowed money for that business. The entire seven years was spent bootstrapping. With his next company, his team of advisors told him it would actually be hard for him to have a more successful exit without infusing more cash into his business. After two rounds of 7-figure funding, he was able to grow the value of his new business to more than $15 million in less than two years.

 

Next Steps?

 

So you’re ready to look at financing for your business but you aren’t sure of the right next step? 

 

Let us help you.

 

Envision Finance Corporation looks beyond the transaction and focuses on building partnerships to ensure success and longevity with everyone. Envision Finance Corporation is a Veteran owned and operated, group of passionate individuals devoted to finding small, medium, and large businesses’ financing for equipment and working capital. With Envision, you’ll find transparency and integrity, and benefit from knowledgeable and efficient processes to get your business the capital it needs to grow and thrive.

 

Envision works with funding sources across the nation and vendors in virtually every industry. We find solutions for your financing needs. No one works harder for you than we do.

 

Contact us today using this form. We will get back to you!

 

10 Things to Consider When Starting a New Business

Welcome to the land of opportunity! The Small Business Administration (SBA) estimates that more than 627,000 new businesses are opened each year. At the same time, a little less 595,000 close up shop each year. So as you can see, starting a new business isn’t really that rare an occurrence in the United States. Neither, unfortunately, is closing one.

 

If the entrepreneurial spirit is moving you to be one of the 600,000+ who do open a new business each year, there are a handful of things you might want to consider first.

 

#1 Defining Your Target Market

What is your market? The key question to ask here, “Who am I selling to?” Or maybe more aptly, “Whose problem am I looking to solve?” Knowing your audience is the key to unlocking a lot of the really important decisions to make throughout your adventure of starting a new business. 

 

In addition to knowing WHO you’re selling to, it’s also vital to know the SIZE of the market you’ve selected. Is it large enough to justify a business? Does your target market have—and also dispense—the means to afford your product or service?

 

#2 Is Your Product or Service a Profitable One?

You’d be surprised how many would-be business owners fail to think this one through. If you have sufficient demand for your product or service, and you can produce (and sell) the product or service at a high enough margin, then you will have the profit to fuel your business. But if there is a breakdown with supply and demand, cost-to-price, or in production in distribution, your product or service could put you out of business FAST. 

 

What you sell is important, and how you produce and sell it also determines the viability of your business idea.

 

#3 How Much Money Do You Want to Make?

This could have easily been the #1 thing to consider, as this is why most people open a new business to begin with. And there is nothing wrong with that. But, before you go to the trouble of opening a new business, it’s important to know what you want (or need) to get out of the business. You could open and run the most popular bakery in town, but if you’re paying more in employee wages and equipment and rent than you have the margins to cover, then you may find you don’t have a business, you have a JOB—and possibly a low paying one at that! 

 

Be sure you know what you want to take home when all is said and done. This will help you make better decisions in all other aspects of your business.

 

#4 How much money will it take to operate the business?

 

Try to get as clear as you can with all aspects of running the business ahead of time to eliminate heartaches (and financial failure!) later. What will you need for business rent? Equipment? Materials? Technology? Staffing? Accounting and bookkeeping? Travel? These aren’t the only things to account for, but it’s a start. And of course the amount of money you need to operate the business may very well scale with its success. 

 

But at least get clear on what it will realistically cost to operate the business for the first year.

 

#5 How long will it take before you make your first sale?

 

Ahhhhh. Income. You trade your product or service for money. But how hot a commodity is your business idea. How long after you start operating (and incur expenses) can you expect to sell your goods. How long before you invoice? How long before you collect? For how long will your business be a cost center only? Be realistic in your projections. 

 

When you start to bring in money in is important to know how long of a runway you need before you can cover your expenses with actual income.

 

#6 When will you be able to quit your day job?

Roughly a third of all people who start a new business are already employed full-time. How you answer this question will be somewhat tied to your answer to #3. With one caveat, you might need to make the jump from your day job (and the safety net it provides) to your business sooner than you think. 

 

More involvement doesn’t always mean more success, but there’s a good chance you will need to double-down on your commitment at several points during your business’s life cycle to get it to the desired next levels.

 

#7 What are your sources of income?

Be clear from the beginning what products or services you expect to sell. And make sure that your market is clear on what you are providing. Ask yourself, What am I selling? In what ways am I collecting the money? Am I seeing all the potential income streams? If you are selling copy machines, should you also sell service contracts (even if they are re-sold and you’re just getting commission)? If you wanted to open a batting cage, would you offer monthly memberships in addition to one-off ala carte visits? If you decided to go into commercial printing, would you also offer web site design? 

 

Thinking through your “menu” invoiceable items is key to knowing just how much your business could be worth.

 

#8 What will your startup expenses be?

So this is a little different than question #4, which has to do with ongoing costs to operate your business. Your startup expenses, or many of them, will be unique to your first month or few months or operation. Some may consider all startup expenses to be those that are incurred before your first sale. Either way, some businesses are way cheaper to start than others. Knowing how much money you have—or can access—may be a determinative factor on what business you can—or should—start. Think of everything you need to start day one. And then estimate the expenses. 

 

Startup costs may be quite a bit higher (again depending on your industry) than normal ongoing costs, or they may actually be less. It just depends on what kind of business you open.

 

#9 What capital or equipment will you need to operate the business?

Yes, there are some businesses whose production (and perhaps distribution) requires large machinery or equipment to operate from day one. Will you be able to purchase these capital goods at a discount, like finding a business that’s closing and liquidating their equipment? Maybe. But it’s best to plan for the future—for the long haul. Plan your initial capital investments at the fair market value to give yourself a more realistic number on what it will take to capitalize your business idea. 

 

#10 Will you need business financing?

According to fundera.com, 29% of small businesses fail because they run out of capital. And 43% of small businesses applied for a loan last year. The thinking is that mostly capital-intensive products-based businesses need business financing—whether for inventory or equipment or some other recurring or non-recurring expense. But service-based businesses have also applied for, and received robust loans to fund or expand their businesses. In 2018, the average small business loan was $663,000.  

 

Whether you need $60,000 or $600,000 to fund your business dream, it is vital that you connect with the right partner for your business loan.

 

So you’re ready to look at financing for your business but you aren’t sure of the right next step? 

 

Let us help you.

 

Envision works with funding sources across the nation and vendors in virtually every industry. We find solutions for your financing needs. No one works harder for you than we do.

 

Contact us today using this form. We will get back to you!

 

What Does Section 179 Mean for Your Business?

According to the IRS web site, “The Section 179 deduction applies to tangible property such as machinery and equipment purchased for use in a trade or business, and if the taxpayer elects, qualified real property.”

 

Section 179 allows businesses to deduct the full purchase price of qualifying equipment in the year it was put into service. This creates a larger initial expense deduction (and all in the same tax year) than using a standard depreciation method, which in turn reduces the tax burden for the company.

 

This is a potential game-changer for companies needing to make a capital-heavy investment. 

 

Whereas in the past, all big expenses would be depreciated over a number of years and, in turn, keep your tax liability high. Now, using Section 179 with an Equipment Lease or an Equipment Financing Agreement might be the most profitable decision you make this year.

 

Why? Because the decreased tax liability that comes with the deduction will almost always exceed your cash outlay for the year when you combine a properly structured Equipment Lease or Equipment Finance Agreement with a full Section 179 deduction. It increases your bottom line enhancing while allowing you to add new equipment, vehicles, and/or software to your business.

 

Now Section 179 doesn’t apply to everything. For expenses to qualify as Section 179 deductions, they must be:

  • Tangible. Physical property such as furniture, equipment, and (off the shelf) computer software will qualify for Section 179. By contrast, assets considered intangible (such as patents or copyrights) do not. While buildings, structures, and land won’t qualify for Section 179, some equipment attached to the building does. This includes things like sprinkler systems, alarms, and climate control machinery.
  • Used more than 50% in your business. This means that equipment or property used mostly for personal reasons will not qualify..
  • Not acquired from a related party. This means no double-dipping! Your purchase will not qualify for Section 179 deduction if it also benefits family, relatives, or organizations with whom you have a relationship.

 

Equipment eligible for the Section 179 deduction includes heavy equipment and machinery, office and computer equipment, off-the-shelf software, some vehicles for business use, and more. It’s always a good idea to check with your tax or legal advisor for specifics. 

 

This means that if the equipment qualifies as a depreciable asset under Section 168, and is acquired for use in the operation of the business, it fits the criteria as a Section 179 deduction.

 

In addition to the Section 179 deduction, you may also be able to take an additional first-year bonus depreciation of 100% on business property that is new to your business. Bonus depreciation remains at 100% until January 1, 2023.

 

For tax year 2020, the IRS has increased the maximum deduction and the maximum amount of equipment that can be purchased by approximately 4%. This increase compares to the cost of living allowance implemented in the previous two years combined.

 

Some other Section 179 benchmarks to consider for the 2020 tax year:

 

  • Maximum amount that can be deducted is $1,040,000
  • Maximum amount of equipment that can be purchased (and take the full deduction) is $2,590,000
  • Equipment must be placed into service no later than December 31, 2020

 

One advantage to leasing or financing equipment and/or software and then taking the Section 179 Deduction is that you can deduct the full amount of the equipment and/or software, without paying the full amount this year. What’s more, the amount you save in taxes can actually exceed the payments owed, making Section 179 a very bottom-line friendly deduction. Yes, you read that correctly… in many cases, the tax savings from the deduction will make your bank account larger than if you never financed the equipment in the first place. It means you can augment your business capacity and increase the bottom line at the same time.

 

Your company can also lease equipment and still take full advantage of the Section 179 deduction.

 

The primary benefit of a non-tax capital lease is that you can benefit from the Section 179 Deduction, yet make smaller payments on your equipment. With a non-tax capital lease you can acquire and write-off up to the deduction limit worth of equipment this year, without actually spending that amount this year.

 

In other words, a small business that is managing cash flow can leverage a non-tax capital lease to minimize out-of-pocket cash, and still take the full Section 179 Deduction.

 

Ready to make full use of the Section 179 deduction? Then start planning now to take advantage of non-tax capital investment.

 

Next Steps?

 

So you’re ready to look at financing for your business but you aren’t sure of the right next step? 

 

Let us help you.

 

Envision works with funding sources across the nation and vendors in virtually every industry. We find solutions for your financing needs. No one works harder for you than we do.

 

Contact us today using this form. We will get back to you!

How Financing Services Help You Save Money

 

So your business needs money for capital or equipment. Sounds expensive. So what are your options? And which options are best for the long-term health of your business… and your pocketbook? Let’s review some ways that financing services for your business can actually save you money!

 

Here we go:

 

Why Pay More in Interest if You Don’t Have to?

Financing services can help you find the right amount of money for your business at the best interest rate, which could save you boatloads of money over time. For instance, let’s say you borrow $300,000 at a 9% interest rate and a repayment period of five years. Over the life of that loan, you will pay $73,650.60 in interest. If, however, you borrow that same amount at 10.5% interest and a repayment term of seven years, you end up paying $124,888.80,124.84 over that repayment period! That’s almost twice as much in interest with a 1.5% higher interest rate and a two year longer term for repayment.

 

Any good financing services company will help you understand the costs associated with interest and terms. 

 

Why Take Money Out of Your Own Profit (and Pocket) for the Business?

One method that some business owners use to secure new equipment or capital is bootstrapping. This means taking money out of your business’s profit to make a big investment in the future. While this using-cash-on-hand method may have its upsides, it may actually cost you more in the long-run. Why? Because the amount you have to invest will always be limited to the amount of profit (and the amount of that profit that you are willing to forego). Chances are, there isn’t enough profit to really secure the capital or equipment you need. If you or your stakeholders receive distributions from profit, then bootstrapping for capital or equipment means short-changing yourself and your stakeholders in the short-run. 

 

Again, financing a business for the use of capital or equipment is a lot like betting on your future, but with other people’s money. The idea that you have to go without profit (or take less of it now) because of capital or funding needs means you are ignoring the other options out there.

 

Business Financing Can Save You More than Money

While there are some alternatives to business financing—like getting an investor—you have to look at the long-term consequences of giving up equity in your company. With equity, you aren’t just giving up money, but giving up autonomy. Business financing in the form of a loan is paid back. And once that load is paid back, there is no more cash drain from the company (like there is with an equity investor). Let’s take this as a example:

 

We’ll use the $300,000 loan example again as a comparison.

 

Let’s say you get the 5 year loan at 3.5% interest and pay it back in five years. Your monthly payment is $5,457.52, which you will pay monthly for 60 months. Yes, as mentioned earlier, you are spending $27,451 in interest over the span of that loan repayment period.

 

But let’s say you get an investor who gives you the $300,000 for a 20% stake in your company. If your business’s monthly equity averages about $150,000, you will pay the investor $30,000 each of those months. That is one monthly payment is alone more than the total interest you pay in the 5-year loan scenario. And unlike the loan, which you pay off in 5 years, you will continue to pay the investor until… yep, you buy their share of the equity back.

 

The point is, getting an investor can be a huge cash suck on your business. And of course for the 20% stake, they will want a say in how you operate your business.

 

What Type of Loan is Right For You?

 

Now that we’ve established that business financing (in the form of a loan) can actually SAVE you money, it’s time to look at the two main types of financing. You’ll need to decide which is right for you:

 

  • Long-term business loans (6—30 years) – These common business loans are provided by lenders to businesses. Long-term business loans require repayment of the principal with interest and fees added to it. These business loans normally require regular payments on a set schedule, but repayment terms and interest rates can vary.
  1. Short/normal-term business loans (5 months—3 years) – A short-term business loan is intended to be paid off much faster than a regular business loan. Some common types of short-term business loans include merchant cash advances and invoice financing. Commercial equipment and working capital equipment upgrades are another reason for short/normal-term loans. (One alternative to borrowing money for a commercial equipment loan is equipment leasing. This will increase your operating expenses but mean less debt for your business.)

 

Next Steps?

 

So you’re ready to look at financing for your business but you aren’t sure of the right next step? 

 

Let us help you.

 

Envision Finance Corporation looks beyond the transaction and focuses on building partnerships to ensure success and longevity with everyone. Envision Finance Corporation is a Veteran owned and operated, group of passionate individuals devoted to finding small, medium, and large businesses’ financing for equipment and working capital. With Envision, you’ll find transparency and integrity, and benefit from knowledgeable and efficient processes to get your business the capital it needs to grow and thrive.

 

When you work with Envision Finance, what can you expect?

 

  • We typically ask for 3 months worth of business bank statements (personal bank statements will do if no separate business account exists), an Invoice/quote for your product or services, and your story. By story we mean what you do, where you started, where you plan to take the business, and where this transaction fits into that plan. 

 

  • For start-ups or people asking for large amounts (typically $100,000 or more) we require a Personal Financial Statement (PFS), Tax Returns (typically 2 years personal and business), and a Business Plan (typically only start-ups), and Current Interims (or current year-to-date financial statements).

 

Envision works with funding sources across the nation and vendors in virtually every industry. We find solutions for your financing needs. No one works harder for you than we do.

 

Contact us today using this form. We will get back to you!

 

 

 

Money. Money. Money. Without it, your business does not exist. And what you don’t know about money can definitely hurt you when it comes to your enterprise. 

Whether or not you got into business purely for the financial upside or not isn’t the issue. Even with more noble aims—not that the acquisition and growth of money isn’t noble in itself—no business can survive without an unfettered flow of money.

Knowing the numbers of your business is important, of course. But understanding business financing may be even more important. Why?

At some point, your business may want to grow, and financing (which infuses more money into your business) may be the way to do so.

Sometimes your business’s survival may even depend on it.

Business owners that only believe in bootstrapping (that’s where you only acquire things or make investments with the cash you have on hand) may be short-changing their company’s growth by not considering financing. So the first thing to understand about business financing is…

  • Business financing gives your business options that your current profit does not.
    If you feel like your business is hitting a glass ceiling that you can’t break through, it may be your attitude toward money. Sure, working simply out of profit feels like a less risky way to do business sometimes. But usually the long-term cost of not growing more aggressively can mean a precipitous decline for your business in the near future. Sometimes not opting for financing can mean not being able to afford the talent or equipment you need to take your company to the next level.

    True story: One business owner started a company that seven years later gave him a $4 million exit. He never borrowed money for that business. The entire seven years was spent bootstrapping. With his next company, his team of advisors told him it would actually be hard for him to have a more successful exit without infusing more cash into his business. After two rounds of 7-figure funding, he was able to grow the value of his new business to more than $15 million in less than two years.

    And if you decide that business financing is for you, then you are NOT alone. According to fundera.com, 43% of small businesses applied for a loan last year.

     

  • Knowing the different types of business financing, and choosing the right type for your business, is essential.

    Long-term business loans (6—30 years) – These common business loans are provided by lenders to businesses. Long-term business loans require repayment of the principal with interest and fees added to it. These business loans normally require regular payments on a set schedule, but repayment terms and interest rates can vary.

    An example of long-term business loans include those backed by the Small Business Administration (or SBA). The SBA works with private lenders but “guarantees” the loan repayment. This usually gets the borrower a lower interest rate and longer repayment period. The downside to this type of financing can be the paperwork required to apply and the time it takes to be approved.

    Some business owners borrow from their real estate assets. Equity loans and Home Equity Lines of Credit (or HELOC) are a couple of ways to “mortgage” your personal future for the sake of your business. The downside here is the additional personal debt you’ve added. Your debt-to-income ratio can affect your credit score and future personal purchases.

    Short/normal-term business loans (5 months—3 years) – A short-term business loan is intended to be paid off much faster than a regular business loan. Some common types of short-term business loans include merchant cash advances and invoice financing. Commercial equipment and working capital equipment upgrades are another reason for short/normal-term loans. One alternative to borrowing money for a commercial equipment loan is equipment leasing. This will increase your operating expenses but mean less debt for your business.

    A personal guarantee (PG) means you agree to put up personal assets as collateral to guarantee the solvency of the business loan. A bank will be more willing to loan you money if you have a personal guarantee.


Borrowing from friends and family – Unlike the previously mentioned forms of business financing, this kind of funding is less formal and has a different set of drawbacks. Usually reserved for business owners whose businesses can’t qualify for traditional loans, this relationship-oriented business financing can create more unintended consequences and scenarios that make it harder to sustain your business.

 

  • Financing your business is not the same as getting an investor. When you borrow money to fund your business, whether you get a guaranteed or non-guaranteed loan, you aren’t giving up any ownership in your company. The exact opposite is true when you ask someone to invest in your company. The money may look the same, but you’re usually giving up equity to get that money. And if the money you’re asking someone to invest in your business causes you to give up more than 50% equity, you are giving up control of your business to that investor. There may come a time in the life of your business in which you are willing to take on a majority partner or equity ownership, especially when you are looking to exit the business. But if it’s funding you’re looking for, business financing is the more conventional way to go. It’s true that you can often get a lot more money when you ask a firm to invest than if you just get a straight up loan… but the baggage involved with an investor may not be what you’re looking for.

     

    1. There are personal ways to fund your business. A friend of mine was once looking to buy the business he had served as a consultant for little over a year. He’d seen growth and the potential for more growth over that time. The owner wanted a steep price however… plus there were the first month’s expenses which were more than the prospective buyer had in the bank at the time. The owner’s suggestion: Use your personal retirement savings to buy the company. Of course, most 401K programs allow you to take a taxable distribution a limited number of times. Some 401K plans even allow for a loan, but only a certain amount—or percentage—of what’s in your account. Be careful with this option however… The downside of taking a distribution from your retirement plan is you are taking out funds that are growing in a tax-advantaged way.

       

  • Be prepared when it comes to applying for a business loan. Different lenders have different documentation requirements when it comes to your business loan application. Sometimes the number of documents required could increase with the loan amount you’re applying for. At Envision Finance:
  • We typically ask for 3 months worth of business bank statements (personal bank statements will do if no separate business account exists), an Invoice/quote for your product or services, and your story. By story we mean what you do, where you started, where you plan to take the business, and where this transaction fits into that plan. 
  • For start-ups or people asking for large amounts (typically $100,000 or more) we require a Personal Financial Statement (PFS), Tax Returns (typically 2 years personal and business), and a Business Plan (typically only start-ups), and Current Interims (or current year-to-date financial statements). 

 

Next Steps?

So you’re ready to look at financing for your business but you aren’t sure of the right next step? 

Let us help you.

Envision Finance Corporation looks beyond the transaction and focuses on building partnerships to ensure success and longevity with everyone. Envision Finance Corporation is a Veteran owned and operated, group of passionate individuals devoted to finding small, medium, and large businesses’ financing for equipment and working capital. With Envision, you’ll find transparency and integrity, and benefit from knowledgeable and efficient processes to get your business the capital it needs to grow and thrive.

Envision works with funding sources across the nation and vendors in virtually every industry. We find solutions for your financing needs. No one works harder for you than we do.

Contact us today using this form. We will get back to you!

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