What Are the Business Funding Requirements?

business funding requirements

Your business could benefit from financing for equipment, materials, payroll cash, and many other funding options.

Platform Funding can help your business secure financial backing with just a few steps and minimal documentation. Learn more about what kinds of business funding are available and which funding requirements must be met to increase your chances of approval. 

Business Funding Options

Business loans come in more than one shape and size. There are several types of loans and repayment models to suit every kind of borrower and lender. Find out which kind of financing matches your business’s needs. 

Business Loans 

Business loans are a specific form of credit that is offered to businesses by lenders under particular terms. In exchange for the money and the lending services, lenders typically require fees and interests in addition to the principal borrowed amount as repayment. Rates and terms vary wildly between loans, so shopping around is an ideal practice.

Revenue Advances

A revenue advance is a type of funding based on the cash flow of your business. This type of revenue advance considers your business’s income provided that you have meticulous record-keeping skills. Revenue-based repayment is determined by the sales you make, and your payments are never more than a certain percentage of your revenue.  

Commercial Fleet Financing 

Commercial fleet financing is for businesses that need additional forms of transportation to make their business operations run more efficiently. Funding is generally based on longer-term commitments and is meant to establish equity in the fleet vehicles as a return asset. You can also write off depreciation expenses for the fleet vehicles on your business taxes as you build equity. Commercial fleet financing provides funding to the following transportation industries:

business funding

Inventory Financing 

Inventory financing helps smaller to medium-sized businesses acquire the inventory they need to make sales while at the same time using the inventory as collateral for loans. Inventory financing is a form of credit wherein businesses may not have initial access to other forms of funding; smaller start-ups often use inventory financing. A revolving credit line to supply necessary inventory is a practical part of doing business. Be sure your business plan is decisive for the one, three, and five-year models for best results. 

Invoice Factoring

Similar to accounts receivable, invoice factoring provides your business with an advance of credit based on the monetary amount of outstanding invoices. Invoice factoring, however, relinquishes your autonomy for collection and control, unlike account receivable financing. Invoice factoring works by selling your unpaid invoices to a factoring company which then collects the payment from customers. After the whole collection chain is said and done, your business only retains about 80% of the original invoice payment. 

Accounts Receivable Financing 

Rather than invoice factoring, accounts receivable financing is also often referred to as invoice financing. A lender will extend a certain amount of money to your business based on your invoices. The unpaid invoices work as collateral to determine how much money to loan your business in the approval process. While there are some fees and apparent interest charged, your company will retain 100% of the collections from the customer invoices, and you are still in control of handling the accounts.

Payment Processing Solutions 

Payment processing solutions are sometimes also referred to as merchant cash advances. Like other revenue advances, payment processing solutions are usually for people who have less than perfect credit. Once a documentable influx of cash flow can be confirmed, your payback model is based on your credit card sales. Rather than pay back in different increments, the repayment happens automatically through the payment processor that your business pays for. Each day a certain percentage of sales is held back until the reimbursement is satisfied.

business funding requirements

Equipment Leasing 

Equipment leasing is ideal for growing businesses that rely on technology and equipment for their business model to thrive. Owning much of your own business and equipment is a good practice when you consider collateral weight. However, in tech-heavy industries, obsolescence can render nearly new equipment useless thanks to quick changes and advances in the field. When you lease equipment, you can build equity as you go or walk away at the end of the lease for a more up-to-date model. In this format, your business can have consistent access to the materials you need without wasting money. 

Purchase Order Financing

Creative financing at its finest, purchase order financing is a solution for businesses that may have struggles convincing lenders to sign on to extend them credit based on little proof or less than definitive proof of repayment. Repayment ends up being a negotiated percent of your profit margin, but often the purchase order is so large that it might be a year’s worth of income. Finding funding terms that you agree with to make such sustainable sales is rooted in the underwriting factors and the creditworthiness of your customer. 

Business Funding Requirements at Platform

Securing all the necessary documents for loan requirements can be an overwhelming task. That’s why Platform Funding has streamlined the process to remove confusion and keep it safe, simple, and timely. We know that your primary focus is running a business, and that’s what we want you to focus on while we deal with the paperwork. So contact us or apply to get funded now.

funding requirements

The Pre-Approval Process 

To apply for the pre-approval process and secure an offer that you can either accept or refuse and walk away from with no obligations or questions asked, you’ll need:

  • Just a few minutes of your time to fill out the brief online application 
  • Three months of business bank statements 

The Formal Approval Process 

If you are pre-approved, Platform Funding will create a funding offer just for you and your business. If you want to move forward with the offered terms and rates, we can typically get you funded within 48 hours of your application. Since the funding offer is unique to your business, your originator will tell you which documents you need for the formal approval process. 

To learn more about securing funding for your business, contact Platform Funding today for simple, fast, and secure financing.