Financing can be confusing because there are so many different programs, lenders, and guidelines.
A business owner may qualify with one lender and be declined by another.
A homeowner looking at a reverse mortgage may get different answers depending on age, home value, existing mortgage balance, property type, and other factors.
The questions below cover some of the things I am asked most often.
Business Financing FAQs
Can I get equipment financing with bad credit?
Possibly.
Bad credit makes financing more difficult, but it does not always mean the deal cannot get done.
Some lenders may also look at:
- Monthly business revenue
- Time in business
- Down payment
- Equipment value
- Type of equipment
- Existing debt
- Cash flow
- Additional collateral
- Overall strength of the transaction
A borrower with a 550 credit score and strong business revenue is a very different deal from a borrower with the same score and little or no revenue.
The full transaction matters.
What credit score do I need for equipment financing?
There is no one minimum credit score that applies to every lender.
Some lenders want stronger credit.
Others may work with borrowers in the 500s depending on revenue, time in business, down payment, and the equipment being purchased.
In some cases, even lower credit may be considered if other parts of the deal are strong enough.
How much down payment do I need?
It depends on the lender and the transaction.
Some borrowers may qualify with little or no money down.
Other transactions may require 10%, 20%, 30%, or more.
A larger down payment can sometimes help make a difficult deal work.
Can a startup get equipment financing?
Yes, some lenders work with startups.
The requirements are usually different from programs available to established businesses.
The lender may look more closely at:
- Personal credit
- Owner experience
- Down payment
- Equipment type
- Industry
- Cash reserves
Can I finance used equipment?
Yes.
Many lenders finance used equipment.
The lender may look at:
- Age
- Condition
- Mileage or hours
- Equipment value
- Seller
- Purchase price
Older or highly specialized equipment may be harder to finance than newer equipment with strong resale value.
Can I buy equipment from a private seller?
In many cases, yes.
Private-party transactions usually require more documentation.
That may include:
- Bill of sale
- Proof of ownership
- Equipment photos
- Serial number or VIN
- Condition report
- Seller information
How fast can equipment financing close?
That depends on the transaction.
A straightforward deal can move quickly.
Private-party transactions, challenged credit, older equipment, larger loan amounts, or missing documentation may take longer.
Can I get working capital with bad credit?
Possibly.
Some working capital programs focus heavily on monthly revenue and bank deposits rather than credit alone.
Credit still matters, but it may not be the only factor.
What can working capital be used for?
Working capital can be used for many legitimate business purposes, including:
- Payroll
- Inventory
- Marketing
- Expansion
- Repairs
- Seasonal expenses
- New contracts
- Business opportunities
- Unexpected expenses
What is revenue-based financing?
Revenue-based financing is business funding that is often underwritten primarily around the revenue and bank activity of the business.
Lenders may look at monthly deposits, time in business, average balances, existing debt, and other cash-flow factors.
Can merchant cash advances be consolidated?
Sometimes.
There are programs that may help consolidate or restructure multiple merchant cash advances.
Qualification depends on factors such as:
- Monthly revenue
- Number of existing positions
- Current balances
- Payment history
- Bank activity
- Overall cash flow
Is a business line of credit better than a working capital loan?
It depends on how the money will be used.
A line of credit can make sense for recurring or unpredictable expenses.
A lump-sum working capital loan may make more sense when the business has a specific use for the funds.
There is no one answer that is right for every business.
Reverse Mortgage FAQs
What is a reverse mortgage?
A reverse mortgage allows an eligible homeowner to access a portion of the equity in the home without making a required monthly principal and interest mortgage payment.
The borrower still owns the home and remains responsible for property taxes, homeowners insurance, maintenance, and other loan requirements.
How old do I have to be for a reverse mortgage?
For a traditional FHA-insured HECM reverse mortgage, the borrower generally must be at least 62 years old.
Some proprietary reverse mortgage programs may allow younger borrowers.
Do I still own my home with a reverse mortgage?
Yes.
The homeowner remains the owner of the property.
The reverse mortgage is simply a loan secured by the home.
Can I get a reverse mortgage if I already have a mortgage?
Possibly.
An existing mortgage does not automatically prevent someone from qualifying.
The existing mortgage generally needs to be paid off through the reverse mortgage transaction.
Whether enough equity is available depends on the borrower’s age, home value, interest rates, current mortgage balance, and program guidelines.
Do I have to make monthly mortgage payments?
A reverse mortgage generally does not require a monthly principal and interest mortgage payment.
However, the borrower is still responsible for property taxes, homeowners insurance, maintenance, and any other required property charges.
How much money can I get from a reverse mortgage?
That depends on several factors, including:
- Age
- Home value
- Interest rates
- Existing mortgage balance
- Type of reverse mortgage
- Program guidelines
There is no one percentage that applies to every homeowner.
What is a HECM?
HECM stands for Home Equity Conversion Mortgage.
It is the FHA-insured reverse mortgage program and is the most common type of reverse mortgage.
What is a jumbo reverse mortgage?
A jumbo or proprietary reverse mortgage is a private reverse mortgage program that is not FHA-insured.
These programs may be useful for homeowners with higher-value properties.
What is a reverse mortgage line of credit?
A reverse mortgage line of credit may allow the homeowner to leave part of the available proceeds unused and access those funds later.
This can be useful for future expenses, emergencies, repairs, or retirement planning.
Can I use a reverse mortgage to buy a home?
Yes.
A HECM for Purchase may allow an eligible homeowner to buy a new primary residence using a combination of personal funds and reverse mortgage proceeds.
What happens when the borrower dies?
The reverse mortgage becomes due when certain maturity events occur, including the death of the last borrower.
Heirs may have options, including paying off the loan and keeping the home or selling the property.
Can my heirs keep the home?
Possibly.
Heirs can usually keep the home if they are able to satisfy the reverse mortgage balance under the applicable program rules.
Does bad credit prevent me from getting a reverse mortgage?
Not necessarily.
Reverse mortgages use a financial assessment, but the underwriting is different from a traditional forward mortgage.
Credit history can matter, but it is not evaluated in exactly the same way as a conventional loan.
Still Have Questions?
You do not need to know which financing program you need before contacting me.
If you are a business owner, tell me what you are trying to finance.
If you are a homeowner considering a reverse mortgage, tell me what you are trying to accomplish.
From there, I can help you figure out which options may be worth looking at.
Call or text Shawn at (714) 271-8524 or email Info@TheBroker.Finance.