The Small Business Owners Guide to Merchant Cash Advances: Unpacking the Merchant Cash Advance

Most small business owners cannot access financing from their bank or through Small Business Administration programs because of various requirements which include high credit score requirements and voluminous financial reporting requirements. So, many small business owners turn to alternative lenders who offer less rigorously attained products such as Merchant Cash Advances to finance their business needs. However, many small business owners who take on such financing know little about MCAs. In fact, we also find that many MCA brokers do not understand much about what they are selling. The purpose of this series of articles is share vital information about what Merchant Cash Advances are, what they are not, and important information for small business owners to consider when either working with or considering securing.

By Thomas Tramaglini, Managing Director – BRP Onesta
About Thomas Tramaglini

The Stats Don’t Lie – Small Business Owners Need and Want Funding

According to the US Small Business Association (SBA), in 2020 there were over 32 million businesses in the United States and the US Census Bureau reported that nearly 10 million new businesses were started during the years 2020 and 2021.

As small businesses begin to grow, small businesses usually need some sort of financing so they can expand their operations. For instance, a restaurant owner may need to add new equipment because that equipment might quadruple their revenue. An HR Firm may need to hire more staff because they are attempting to insert themselves in a local market that is targeted. Some small businesses also take on short term financing to close gaps in revenue or to realize better cash flow. Regardless of use, small business owners need and want business financing. In 2020, the SBA also reported that over 50% of all small businesses have borrowed money in the past 5 years.

However, with it being so hard to secure low-cost financing, what do small business owners do to attain the funds necessary to run and grow their businesses?

The Merchant Cash Advance

The need for small businesses to attain funding combined with difficulty of small businesses to attain funding from banks has served as the catalyst to the alternative lending industry growing into a multi-billion-dollar industry.

That said, one of the most common avenues for small business owners is the Merchant Cash Advance.

What is a Merchant Cash Advance (MCA)?

An MCA is not a loan but an advance of a business’ future receivables. Lenders gauge how much to advance a small business owner in several ways, including previous credit card sales and revenue going into their business bank account. Variables such as industry, number of deposits, daily balances among others are used by the lender to hedge risk. Regardless, MCA lenders offer to advance a portion of a small business’ future sales as well as an agreement with the business owner on the percentage of future sales which are being sold to the lender.

A Merchant Cash Advance (MCA) is one of the easiest funding options for small business owners because MCAs are unsecured, do not require strong credit, usually do not require collateral, and require little documentation (if any). The average MCA file can be funded within a day and usually requires several months of business bank statements.

Interest and Terms

MCAs do not carry interest. Advances carry factor rates, which are also called buy rates that are simply an agreement of how much of a small business’ future sales will be paid to the lender. Some advances may also collect repayment terms by taking a portion of business’ credit card receipts each day as well until their agreed sale of future receivables is completed. MCA payback frequency varies depending on the risk and bank account statistics. For instance, if a borrower wants to have a monthly or weekly payment the lender gauges that opportunity off the average daily balance of the business in the business bank account. When daily balances are variable or lower MCA lenders may require a daily payment.

Probably the most negative part of an MCA is cost of money. MCAs can be expensive. That is, MCAs can be as high as +50% in payback. Also, most advances carry origination fees for the work by the lender, which can be as high as 10% of the loan. MCA cost of money is like how credit card cash advances operate and, in some cases, better.

Advantages of MCAs

Merchant cash advances have several advantages for small business owners, and some can include:

  • Fast funding – Some MCA companies can fund small businesses in 90 minutes.
  • Most MCAs do not have UCC liens.
  • MCAs are not usually reported on personal credit.
  • Funds are unsecured.
  • Payment frequency can be flexible at times.
  • Most MCAs do not carry a personal guarantee.
  • Easily refinance options which can cut costs.
  • No early payback penalties.
  • Small business owners can build a relationship with the lender ultimately securing better programing.
  • Few required documents (including taxes) for funding.

Is an MCA right for your business?

This article focused on the need and application of the Merchant Cash Advance for small business owners. In part, MCAs can be a beneficial piece to a small business and its growth. However, MCAs should be taken with caution, as business owners should know the rules, payback terms, as well as the associated profit margins.

If you have questions, you can always contact our team here.

You can always explore our discounted options for Merchant Cash Advances which we usually find financing 10%-20% lower than our competitors.

Dr. Thomas Tramaglini is the Managing Director for BRP Onesta, a company that supports small businesses. By offering a host of important and affordable services that small business owners tend to not have time to do themselves, the team at BRP Onesta can help small businesses grow infinitely. Although located in on the famous Jersey shore, BRP Onesta serves clients in all 50 states, Puerto Rico, Mexico and Canada.


The Ease of Finding Pandemic Disaster Loan Cheaters

In 2021, the SBA Inspector General suggested that nearly $80 billion of funding may have been fraudulent and the number is getting larger. However, while many criminal cases include complex investigations, finding EIDL or PPP fraud on the surface is quite easy. This article highlights how easy it really is to find those who may have committed COVID-19 Relief fraud and several techniques that the government can and probably is using to find those who committed fraud from the pandemic funding programs.

By Thomas Tramaglini, Managing Director at BRP Onesta
About Thomas Tramaglini

Since the onset of COVID-19 Relief offered small businesses during the pandemic, fraud has been reported as rampant. Considerable action has been taken to underscore the importance of oversight as well. Since President Biden vowed to ramp up oversight of the Pandemic Programs passed by Congress during the Trump Administration and after as well, the Department of Justice has prosecuted many small business owners and legislation has been passed that make oversight a long-term reality.

However, finding pandemic fraud is not hard. Video evidence is not needed. The proof is in the data and the trail of data which applications can be tied to.

Pandemic fraud was easy.

Many small business owners (and some were not small business owners) used a host of different tactics to defraud the US Government’s PPP and EIDL programs from March 2020 through August 2021. Some of these tactics include bank and wire fraud, identity fraud, as well as the submission of false documents such as quarterly tax reports and taxes.

In our industry, we have seen fraud for many years. Commonly, we see fraudulent bank statements regularly, as well as other fake documents such as false payroll data, tax forms, etc. However, when the Trump Administration rolled out pandemic relief in good faith, many small business owners did not return

the favor. They saw “free money” and clearly did whatever it would take to get funded.

We have written extensively about many of the fraud cases and background of cases that continue to pop up in the news, as well as new indictments and convictions in the following articles:

Small Business owners are accountable for what they attested to when submitting their pandemic relief applications

When small business owners filed applications for PPP and for EIDL, they attested that the information they were submitting was true. For instance, in the standard PPP application, the small business owner had to “certify that the information provided in this application and the information provided in all supporting documents and forms is true and accurate in all material respects. I understand that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable under the law, including under 18 USC 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to $250,000; under 15 USC 645 by imprisonment of not more than two years and/or a fine of not more than $5,000; and, if submitted to a federally insured institution, under 18 USC 1014 by imprisonment of not more than thirty years and/or a fine of not more than $1,000,000.”

Therefore, small business owners who knowingly filed requests for disaster relief funding knew in advance of accountability, and they hedged that they would never be held accountable for submitting false (or verifiable) information.

Evidence is Easy to Be Found

Unlike many criminal cases that are cloak and dagger and require massive, complex investigations to uncover hidden evidence, investigating COVID-19 fraud is relatively easy because there are verifiable data and a paper trail leading the way to who done it.

Anyone Can Mine EIDL and PPP Data

The SBA has released a host of PPP and EIDL data which can be found here:

BackOffice Depot Data for Download

Feel free to download all public data as because the data are public data under the Freedom of Information Act (FOIA).

Cross-Checking Data is Not Hard

In many cases, people believe that the government is not very smart.

However, what is needed to find fraud is not hard and the government does not have to be smart to outsmart stupid. Anyone who has access to data can find those who possibly committed fraud with a simple V Lookup or the use of a Pivot Table using Microsoft Excel. Here are a few simple ways that the government is using data to find those who may have committed fraud.

Were the companies who submitted applications, operating?

During review and underwriting their EIDL or PPP loans, the SBA and many lenders did not ask for articles of organization or incorporation or even back up that the company was operating. For instance, anyone can download any of the spreadsheets that we have on our website (see above) to pull the data for themselves. We have easily accessible datasets listing have every pandemic relief loan given from March 2020 through October 2021.

One can go through the list of businesses and just Google the businesses. It is easy to find businesses who are operating and who are not. Websites report scores of data on businesses including number of employees, how many trucks are in operation, and more.

The easiest data to find discrepancies are with the larger EIDL and PPP loans that were taken by small businesses. For instance, I was able to download all loans for PPP over $150K and then sort the column with loan amounts. I was easily able to then choose 10 loan recipients at random. Just in my cursory review I was able to find 1 trucking company that received $700,000+ but they only had listed on the USDOT site that they had 2 trucks. The same business also showed on the EIDL website that they had listed 4 employees. Given the PPP rules for how much salary was able to be delivered in funding, something there seems fishy. The other company I found listed in the 10 companies I reviewed also received $700K+. The company seemed to not have a website, business in good standing, did not file an annual report for more than 6 years, or have any notable information which demonstrated a legitimate business. I even Googled the business address, and the business address was a vacant home sold more than 2 years ago.

Matching tax data with PPP/EIDL Applications

Tax data. It is that simple.

Simply put, the IRS has a record of every tax return and report of quarterly payroll data.

One can easily take the PPP dataset, combined with the data from the IRS (which the Department of Justice or Inspector General for the SBA) should be able to cross-reference using a V Lookup or Pivot Table and find matching and non-matching numbers. Those who submitted quarterly payroll data (940/941) which does not match the IRS records should immediately be investigated.

I am going to guess (however, I cannot give the government that much credit) that the IRS and SBA have begun cross-checking these data and found many fraudulent applications.

The same governmental agencies should also be able to cross-check income from 1040s or 1120 (or other forms) to see if what was submitted was really what was submitted. That is, many people or small businesses do not file taxes. However, when submitting their applications everyone did. It wasn’t until much later on during the pandemic that the SBA began asking for tax transcripts. One can only think of the millions of loans that were approved without any check of tax forms or the infamous 3506T review.

Were some people really that stupid?

The answer is yes.

As aforementioned above, we have written extensively on the subject, as far as ranking the most dubious losers who defrauded the government.

Congress recently passed legislation that extends the statute of limitations out to 10 years for pandemic fraud. It is likely that those who cheated, will be called on it.

Dr. Thomas Tramaglini is the Managing Director for BRP Onesta, a company that supports small businesses. By offering a host of important and affordable services that small business owners tend to not have time to do themselves, the team at BRP Onesta can help small businesses grow infinitely. Although located in on the famous Jersey shore, BRP Onesta serves clients in all 50 states, Puerto Rico, Mexico and Canada.

Get Your Creative Business Discovered With These Promotional Ideas

Your creativity speaks for itself, but your prospective customers need to find you before they can become raving fans. Getting your creative works discovered can help you generate enough income to turn your creative passion into a full-time income. Use these tips from business expert Thomas W Tramaglini to promote and grow your creative business, whether you’re an artist, fashion designer, cake decorator, or other type of creative business owner.

By Julie Morris, Guest Contributor and Author

Read more of Julie’s work here.

Write a Business Plan

Promoting a business without a clear plan won’t do much good. Write a business plan that provides a business overview, what you do or sell, your planned business structure, funding and financial plans, and your marketing plan. This makes it easier to grow and guides your decisions on promoting your business.

Craft a Marketing Plan

Any business, whether small or large, needs a marketing plan. This is essential to map out a clear strategy for how you will reach your target market and achieve your desired sales goals. Without a marketing plan, it is all too easy to waste time and money on inefficient or ineffective marketing campaigns. Instead, a good marketing plan will help you focus your resources and make the most of your budget. It will also give you a roadmap to track your progress and measure your success over time.

Don’t Underestimate Facebook Ads

Facebook Ads is an effective way to reach out to potential customers on the world’s largest social media platform. By targeting a specific audience and using carefully crafted ad copy, you can create ads that are both eye-catching and informative. Facebook Ads can be used to promote special offers, drive traffic to your website, or simply raise awareness about your brand. Opt for free online templates with a library of design features to create Facebook Ads quickly and easily. Once you’re done, simply upload it for viewing.

Use Video

Video marketing is an important strategy with 86% of businesses incorporating it into their marketing strategy. They’re also effective; 86% of consumers decided to buy something after seeing a video from the company, and 73% of people prefer short videos over text-based articles and other content types. Videos work well with creative businesses because they show off your product. You can also create behind-the-scenes videos, such as the process for making your item, which helps you connect to customers. Post the videos on your social media channels where people can share them and help you reach new customers.

Partner With Other Businesses

Reach out to established businesses to see if they’ll display or sell your products. For example, a local coffee shop might display your paintings and offer them for sale, or a retail shop might let you set up a small display of your crafts. You can also promote each other’s businesses on social media to make it mutually beneficial.

Be Charitable

Supporting a community cause or donating some of your items can get your designs in front of more people. You might donate one of your creative pieces to a silent auction for a charity fundraiser. Another option is sponsoring a community project or a kids’ sports team to get your name on their marketing materials. You can also donate your services to nonprofits. You might design graphics for a charity if you’re a graphic designer, for example.

Promote Your Creativity

Getting your work in front of more people can help you grow your business income significantly. It takes time, but it’s worth the effort if it generates customers and helps you realize your dreams of success. Have a clear business and marketing plan, and make sure social media is a key component of your advertising. Partnering with other businesses and being charitable to the community can also make a difference. Every little bit will help put your business on the path to grow and flourish.

The Blacklist.

While small business owners continue to need financing to support and grow their businesses, as the economy continues to tighten so are lending options. If You Have Had an Issue Paying Back Your Term Loan, Line of Credit, or Merchant Cash Advance, You Are Probably on a Blacklist. In recent years internet and alternative lenders have become more organized and sophisticated in their quest of protecting themselves from borrowers who have had payback issues in the past. This article explores the different ways lenders protect themselves from those who have had payment issues before.

By Thomas Tramaglini, Managing Director at BRP Onesta |
About Thomas Tramaglini

Small Business Owners Need Money

From growing their businesses with new equipment to general working capital, small business owners are constantly in the hunt for financing for a multitude of reasons. In fact, nearly 1 in 2 business owners will seek financing of some type this year (I previously provided an overview of the statistics of how many small businesses are looking to borrow money for their business and for what purposes). Furthermore, when the economy hits bumps lenders like banks tend to tighten their parameters for lending. During the Pandemic, many months went by when lenders had $0 in total lending.

One simple statistic stands out – in 2021 nearly 32 million small businesses were in existence. Banks delivered only 12,000 or so SBA 7(a) loans during the same year.

Can The Past Haunt Small Business Owners When They Need Money?

The simple answer is YES.

In the olden days of the Merchant Cash Advance and term loans (2008-2020), there were always lenders who did not have the tools to do enough background on companies or small business owners and lenders would fund those who had bad payment performances in the past.

Today, internet and alternative lenders use several different tools that prevent funding those who have had issues paying back loans, lines of credit, and merchant cash advances.

One Strike and You Are Out

All in all, most lenders use one or more of the tools listed below to protect themselves. What this means is that if you have any issues with any payback, you will not get funded again. Period.

Harsher Than Bankruptcy

Small business owners who default or settle on loans, lines of credit, and merchant cash advances find themselves on a blacklist. Most lenders do not want to lend to those who have had issues with borrowing. In fact, the small business owner is permanently rejected by most lenders. If lenders decide to take a chance on the small business, the factor rates or interest can go as high as 60%.

On the other hand, filing for bankruptcy puts you in a bind for a bit. However, in most cases internet and alternative lenders will fund the small business owner if they do not have liens that are excessive. Some lenders have waiting time of up to 2 years before they will lend to the business.

Overall, this demonstrates that being on a borrowing blacklist is worse than having a bankruptcy.

What are the tools?

Founded in 2015, is a popular tool for online and alternative lenders. Lenders who belong to upload their lending experiences ultimately painting a picture of many small businesses who have taken loans and merchant cash advances with their companies. Recently, reported that they now have over 50,000 records on file.

Why is this important? provides lenders a robust database so they can better inform their approval process. These records provide categorical data such as suspicious activity, slow payers, split payers, and COVID-19 Hardships. Lenders can also find out if small businesses have taken on recent or defaulted funding that might not appear in a business’ bank statements. Regardless, small business owners should know that lenders are not stupid and if you have had issues with your MCAs or loans, you will probably have some issues taking another loan or MCA.

From our knowledge, here are the lenders who use DataMerch:

4 Pillar Funding | 501 Advance | 60 Day Capital | Ace Funding | Advantage Capital Funding | AJ Equity | Alternative Funding Group | American Stimulus Funding Group | Arsenal Funding | Avanza Capital | Balboa Capital | Bank of Cardiff | Biz2Credit | BlueSky Advance | Breakout Capital Finance | Business Capital Providers | Business Fund Corp | ByzFunder | CAN Capital | Capital Stack / E-Prodigy | Capybara Capital | CashFund | Cashium | Central Diligence Group | CFG Merchant Solutions | Channel Partners | Circadian Funding | CMS Funding | Coast Funding | Cooper Asset | Corporate Development Group | Credibly | Diamond Advances | Dynamic Capital | Edge Capital | E Financial tree | Elevation Capital | Eminent Funding |Enova ( OnDeck – The Business Backers – Headway Capital ) | Everest Business Funding | Expansion Capital Group | Express Capital Funding | Family Business Funding | FAVO Funding | First Down Funding | Flexibility Capital | Fora Financial | Formula Funding | Forward Financing | Fox Business Funding | Fundamental Capital | Funders App(24 Capital) | Fund GGC | Fundfi Merchant Funding | FundKite | Fund So Fast | GCap Holding LLC | Gemini Funding Group | General Merchant Funding | Backd | Global Funding Experts | Go Cap Advance | Good Funding LLC | Greenbox Capital | Green Note Capital Partners | Greenwich Capital Management | GRP Funding | Harper Advance | Highland Hill Capital | IBEX Funding Group | Imperial Advance | In Advance Capital | IOU Financial | Ironwood Finance | Irwin Funding | JRG Funding | Kalamata Capital Group | Kodiak Funding | Legend Advance Funding | Lendbug | Lendflow | Lendora | Lendr | LG Funding | Libertas Funding | Liberty Capital Management | Liberty Funding | Liquidbee | Mckenzie Capital | MD Capital | Meged Funding Group | Merchant Advance | Merchant Cash Group | Merchant Refi | Millstone Funding | Monera Capital Group | Mulligan Funding | National Funding | Novac Equities | PAC Western Financial | Parkview Advance | Paz Funding Source | PIRS Capital | Premium Merchant Funding | Progressive Equity Partners | Quicksilver Capital | Radium² Capital Inc | RBR Global | RDM Capital Funding | Reliable Fast Cash | Reliant Funding | Savent Financial | SCA Funding Solutions | Select Funding | Silverline Funding | Skyfi Capital Partners | Small Business Funding | SOS Capital | Spartan Capital Group | Specialty Capital | Sprout Funding | Super Fast Capital | The Fundworks | The LCF Group | Thor Capital Group | Torro | Unlimited Bucks | Velocity Group USA | Vertex Funding Group | VitalCap Fund | Vivian Capital Group | Vox Funding | Wellen Capital | Westfair Holdings Group | Westwood Funding | Wide Merchant Group | World Global | Wynwood Capital Group | Yarrow Financial | Yes Lender | YM Ventures | Zahav Asset Management

NYS Court System

One place that online and alternative lenders check for issues with loans, MCAs or just other issues which might be a red flag for borrowers is the New York State Unified Court System (New York State Courts Electronic Filing). This website yields a host of legal cases from New York State but importantly, most alternative lenders are in New York so anytime there is a default, and a lender files a Judgement, that Judgement is listed.

If you are a small business owner and default on a loan or merchant cash advance and you are served with a lawsuit or received a judgement, it will likely be listed here because most lenders are located in NY. The good news is that you can satisfy your Judgement which will be listed on the site after doing so. The bad news is that once you have a Judgement listed on this website it becomes very difficult to ever get funding for your business ever again. In some ways, have a Judgement posted on this site can be worse than a bankruptcy.

Would you like to see if you have anything listed? is the link that used to access the files.


Online and alternative lenders use different clearinghouses who curate a multitude of data. From publicly reported data to credit records, these datasets provide a robust amount of information about potential borrowers and businesses. There are a few clearinghouses our there (others like Chex Systems) but here are a few that we know are commonly used.


LexisNexis provides business research and risk management services to various industries. These include lenders, insurance companies, vendors and more. These companies use LexisNexis to verify personal and business credit history (PayNet does this too), public records (PACER), and application history. And they use LexisNexis to assess risk on applicants. Inaccurate information, data which doesn’t match your application, or negative items in your LexisNexis report can have a drastic negative impact on your business. This is especially true during the application process.

Business owners can request a copy of their LexisNexis report and decrease the probability of surprises during the application process. Click Here to Request Your Report

What to do if you have a negative payment history and you need financing?

If you have negative payment history and cannot get small business funding, there are a few options that might work.

Personal Loans

One way that small businesses can get financing is through personal loans or credit cards. While this can be a barrier, in many cases because the small business has been blacklisted so personal loans may still be available. Plenty of companies out there exist who supply personal loans to people such as Sofi and Best Egg. While you may burden your personal credit, this may be your only option.

Collateralized Loan

Simply, when lenders see you have a negative history from lenders, they may balk at lending your business money. However, some lenders may ask for collateral. That is, by putting a lien on a piece of real estate or equipment, the business may receive the funding they are looking for.

To see some of the options for collateralized loans, click here.

Business Credit Funding

In a previous article, I covered what business credit is. Business credit is the establishment, building, and maintaining of a successful borrowing and payment of credit on goods and services. Business credit is established under the business’ Employee Identification Number (EIN) and is not associated with the business owner’s social security number.

As long as you have good credit and have established business credit, you can get business funding on your EIN number. There are term loans, lines of credit, and credit cards that can be used when small business lenders refuse to loan money to your business because you had an issue at one time.

Sign Up for Our Secret Sauce Newsletter which shares information on trends, lending and grants for Small Businesses and receive the link to 1 Tradeline Who Gives Business Credit for Free Click Here

Not sure if you can get funded?

Over the years, we have seen just about everything small business owners have done to get funded. Specifically, we could write a book about some of the shenanigans some business owners who have negative payment histories have pulled to get funded.

When our clients or small business owners get declined for loans or merchant cash advances and ask why? Notwithstanding that many times the clients do not tell us they had issues with paying a loan or merchant cash advance, they should understand there are tools that lenders use, and it is very possible they are blacklisted.

So, if you are a small business owner who has had issues with paying back a lender, lenders are getting more informed, and they should be aware of this. Lenders are not stupid and if you had issues paying back a loan or merchant cash advance, rightfully so you will probably not be able to access more capital for your business. In fact, you will probably not find an easy road finding capital for another business as well.

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Dr. Thomas Tramaglini is the Managing Director for BRP Onesta, a company that supports small businesses. By offering a host of important and affordable services that small business owners tend to not have time to do themselves, the team at BRP Onesta can help small businesses grow infinitely. Although located in on the famous Jersey shore, BRP Onesta serves clients in all 50 states, Puerto Rico, Mexico and Canada.

Affordable, “Recession-Proof” Financing Options for Small Businesses

On July 11, 2022, for the first time ever the exchange rate between the US dollar and the EURO reached parity. With the volatility of a recession and uncertainty looming across the global market, small business lenders and community banks will certainly think twice in providing loans. What is abundantly clear is that small business owners will continue to rely on financing to sustain and grow their businesses. This article explores several recession-proof ways small businesses can take on business financing without the worries of the recession affecting their options.

By Thomas Tramaglini, Managing Director at BRP Onesta
About Thomas Tramaglini

Recessions never good for the economy. BUT…sometimes recessions can be good for small businesses.

While there would be few who would suggest that a recession is good, during recessions there can be

opportunity for small businesses to thrive.

For instance, some industries like grocery stores, home health care, bars and restaurants with liquor sales, maintenance services, and the sweets industry tend to gain quite well. Regardless, small business owners right now should be thinking about the next 12 months and how they can capitalize on consumer demands which come along with a recession.

Small business owners need to position themselves now for the future. They should budget for balancing the everyday costs of running their businesses and focusing on increased efficiency. However, the most important thing small business owners should be working on now is their mindset. Their mindset should be to play like you are losing. This amplifies consideration of efficiency, effectiveness, and streamlining waste. This also allows small business owners to focus on risk.

The need for business financing.

Without a doubt, the small business financing industry is back after the pandemic. Companies like eNOVA (who owns OnDeck) posted record earnings in 2021. Other small business lenders have pushed forward with earnings and expanded. Credibly, a major small business lender based in Michigan announced that it had secured at $50M credit facility for its small business lending division in July of 2022.

Record profits infers record lending to small business owners. That is, if lenders are lending more than ever, small businesses are taking more than ever. With the return from the pandemic, small business owners need access to capital that not only makes sense, it must be helpful.

Recession-Proof small business financing.

With small business lenders thriving, so are programs which small business owners should be focusing on before the recession hits. While some would indicate that we are already in a recession, with the parity of the Dollar and the EURO the admission of recession appears to be coming soon.

Small business owners need to look at the signs and find financing products which are recession-proof. That is, recession-proof products tend to have the following commonalities:

  • The terms allow for cash flow which does not kill profit margins.
  • Financing products carry terms which are reasonable. Many times, while rates for longer terms seem to be lower, they are much more expensive because you have the financing longer.
  • The product allows you to save while you pay back the financing.

Small Business Grants

Small business grants are free money for small businesses which are provided by government, non-public, and for-profit entities. Most small business grants provide business owners an avenue to apply for a bigger goal. For instance, the US Department of Labor has hosted grants to small businesses in places of high poverty for the development of careers and creation of new jobs.

While it takes time and effort to research and apply for grants, the end game can be worth it as small business grants are funds which do not need to be paid back. However, grants are not always rosy. As I wrote in a recent article:

Purpose – Along with most grants is purpose. That is, grants have purposes. For instance, State grants or Federal grants may focus on a bigger picture such as developing jobs or creating a new product that might help the public.

Restrictions as well as Reporting – Grants have restrictions and reporting requirements which generally ensure that the grant is being used the correct way. Further most grants have time limits for attaining results and reporting those results to an overseeing organization or entity.

Matching Funds – Many grants come along with a requirement for the organization to match the funds from the grant with their business’s funds. Matching funds can be tricky as many small business owners apply for grants with matching funds and do not even know that matching is a requirement.

To help you get started, we always keep and refresh small business grants which are available to small business owners (

Term loans

Term loans are easy to apply for and usually provide small business owners terms from 1 year out to 5 years. Approvals are based on underwriting guidelines specific to the industry, amount of loan, monthly revenue, credit score, business credit score, and time in business.

Small business term loans usually have set fixed interest rates and payments can be daily, weekly, bi-weekly, or even monthly. For most term loans under $150K the only documentation needed tends to be an application, business bank statements, as well as proof of business. Some lenders ask for taxes if your funding request is for more than $150,000 or on a case-by-case basis.

Average Range for Borrowing: $1,500 to $550,000

Rate(s): 7% – 38% APR

Credit Score Requirement: 600

To apply for pre-qualification (no credit pull) for a Small Business Term Loan Click Here.

Equipment Term Loans with Rebate

Some equipment loans carry rebates which can be advantageous for small business owners. That is, a

lender will lease to the small business a piece of equipment and provide a rebate at an amount which is parallel to the costs of the equipment loan. For instance, if it is determined that the equipment loan is for $25,000, the equipment is then amortized with interest over 60 monthly payments, without origination or fees. Then, upon receipt of equipment, a rebate is provided for the business owner for the equipment at the amount the equipment costs.

What is beneficial about the loan is that to an extent, equipment is tax deductible under Chapter 179 of the IRS Tax Code so what you are paying back is tax deductible. Also beneficial is that this loan is not one that counts as an MCA position and having a longer term make the payments more affordable than traditional term loans.

Average Range for Borrowing: $20,000 to $100,000

Rate(s): 15% – 20% APR

Term(s): 5 years

Credit Score Requirement: 680

Business Credit Score: Paydex Score of 80

To apply for pre-qualification (no credit pull) for a 5 Year loan click here.

Line of Credit

Lines of credit have the most flexibility. For instance, the beauty of a line of credit is that you only draw what you need when you need to. Applications for lines of credit are fast and have flexible terms.

Range for Borrowing: $1,500 to $250,000

Rate(s): 7% – 28% APR

Term(s): Variable

Credit Score Requirement: 680

To apply for pre-qualification (no credit pull) for a line of credit, click here.

Short Term Loan

Short term loans are those which go from 6 months to 5 years. Most short-term loans have weekly payments and little underwriting requirements. Further, credit is less important and while rates tend to be higher for small business owners, there is minimal paperwork needed and funds can be disbursed in as fast as 1 hour.

Average Range for Borrowing: $2,500 to $500,000

Rate(s): 8.99% – 34% APR

Credit Score Requirement: 450

To apply for pre-qualification (no credit pull) for a line of credit, click here.

Consolidation Loan

Consolidation loans present a host of different options for small business owners who already have debt or would like to combine working capital already taken. There are different consolidation programs available which small business owners can use to ensure that they have the maximum economic performance they can have.

For originators, loan consolidation is an art. There are virtually dozens of ways to consolidate loans which can be helpful. Once you apply, our team will craft an option which provides you a simple, affordable road map for consolidation and beyond.

Average Range for Borrowing: $25,000 to $500,000

Rate(s): 9.0% – 39% APR

Term(s): Up to 3 years

Credit Score Requirement: 500 and up

To apply for pre-qualification (no credit pull) for a consolidation loan, click here.

Equipment or Vehicle Loans

Perhaps one of the best loans small business owners can take is for equipment or vehicles. With relatively low rates, equipment or vehicle loans can be efficient and lower in cost than working capital loans or merchant cash advances. Plus, the benefits are that the loan does not usually go on the business owner’s personal credit and has a longer term, up to 6 years.

Further, many lenders do not count an equipment loan towards working capital loans or merchant cash advances, so small business owners may be able to acquire more capital. Some equipment and vehicle lenders may also provide additional working capital as well.

Average Range for Borrowing: $25,000 to $150,000

Rate(s): 6.0% – 21% APR

Term(s): Up to 6 Years

Credit Score Requirement: 600

To apply for pre-qualification (no credit pull) for an equipment or vehicle financing, click here.

Asset-Based Loans

Asset-based loans are loans that are collateralized with either equipment or real estate. Loans that have collateral attached to it are usually cheaper than regular term loans and less risks for lenders to provide funds.

Asset-based loans for small business owners can be a great way to access lower-cost working capital and the terms can be beneficial as well. Also, asset-based loans usually carry simple monthly interest, which means you pay interest by the month, not the term. If the borrower pays the loan back earlier, they can save on the interest as they do not pay the months that they do not have the loan. This is a similar loan product to a line of credit.

Average Range for Borrowing: $10,000 to $500,000

Rate(s): Simple Monthly Interest (starting at 1.5% per month)

Term(s): Up to 5 Years

Credit Score Requirement: None

To apply for pre-qualification (no credit pull) for an asset-based loan, click here.

Dr. Thomas Tramaglini is the Managing Director for BRP Onesta, a company that supports small businesses. By offering a host of important and affordable services that small business owners tend to not have time to do themselves, the team at BRP Onesta can help small businesses grow infinitely. Although located in on the famous Jersey shore, BRP Onesta serves clients in all 50 states, Puerto Rico, Mexico and Canada.

Plenty of Blame to Go Around: Who is to Blame for The Biggest Fraud in American History?

Over the last year, we have written extensively at the breadth of fraud associated with the Federal Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) Programs during the COVID-19 Pandemic. In recent weeks, the US Small Business Administration Office of the Inspector General (OIG) released a scathing report of the performance of the US SBA during the COVID-19 Pandemic and its attention to fraud during the PPP program. Not only are some small business owners and some lenders to blame for fraud, so is the US Small Business Administration. Clearly, they failed to adequately do their part in preventing fraud, ultimately leading to what some have called the biggest fraud in the history of the United States.

By Thomas Tramaglini, Managing Director at BRP Onesta About Thomas Tramaglini

How bad was the fraud?

Bad. In past articles we have highlighted the many FRONTLINE ZEROES OF THE PANDEMIC. That is, the countless losers who have defrauded the people of the United States by using a host of strategies to collectively secure millions of dollars and in most cases misappropriately use the funds which were to keep America’s businesses open. In a previous article, we underscored this from a report made by Ken Dilanian and Laura Strickler of NBC.

They called it the largest fraud in the history of the United Stated:

“Even if the highest estimates are inflated, the total fraud in all Covid relief funds amounts to a mind-boggling sum of taxpayer money that could rival the $579 billion in federal funds included in President Joe Biden’s massive 10-year infrastructure spending plan, according to prosecutors, government watchdogs and private experts who are trying to plug the leaks.

“Nothing like this has ever happened before,” said Matthew Schneider, a former U.S. attorney from Michigan who is now with Honigman LLP. “It is the biggest fraud in a generation.”

Most of the losses are considered unrecoverable, but there is still a chance to stanch the bleeding, because federal officials say $600 billion is still waiting to go out the door. The Biden administration imposed new verification rules last year that administration officials say appear to have made a difference in curbing fraud. But they acknowledge that programs in 2020 sacrificed security for speed, needlessly.”1

What the cases of COVID-19 Loan Fraud demonstrated

While there are a bunch of cases which have different ways in which PPP or EIDL fraud were conducted, the justice department has already brought criminal charges against hundreds of small business owners for fraud since 2020. The Biden Administration currently has implemented tougher oversight and investigation since Biden took office which has shown hundreds of millions in fraud were committed – More is to come.

What have been the lenses of COVID-19 fraud which have been prosecuted?

A nice overview of the Justice Department’s investigations have been made by the Project on Government Oversight (POGO). They have kept a great database on their website here: A review of their database suggests the following were the main cases of COVID-19 fraud:

  • Accused individuals allegedly falsified payroll documentation to justify either getting a loan or getting a bigger loan than they were eligible for;
  • Accused individuals allegedly created fake tax documents used for verifying details in loan applications;
  • Accused individuals allegedly created bogus companies to get loans;
  • Accused individuals allegedly used defunct companies to get loans;
  • Accused individuals used stolen identities or aliases while applying for loans;
  • Accused individuals allegedly falsified ownership of existing legitimate businesses;
  • Accused individuals also obtained Economic Injury Disaster loans (some of these individuals have been accused of fraudulently obtaining these loans as well).

More of the article can be found here

Who is to blame for the fraud?

This is an interesting question: But there is plenty of blame to go around. While we could explore this topic on many angles, we have selected three main areas: small business owners, lenders, and the US SBA.

Small Business Owners

Small business owners have extensively been prosecuted for fraud in the aforementioned areas and others. What is clear, many small business owners tried to take advantage of the Federal Government. What is not understood is how these people thought they were not going to be cross-checked from the IRS on data such as 940/941.

If there is thing, small business owners were eager to get help that was needed. However, some small business owner clearly saw opportunity to score some easy and free money.

We have underscores other things small business owners did which regard the level of stupidly or ineptitude.


Maseratis, Jaguars, Mercedes, Investments, Swimming Pools…. Getting Caught for PPP/EIDL Fraud.

Getting Caught: Small Business Owners Committing EIDL and PPP Fraud.

Fake 940/941s, More Lamborghinis, Rolexes and Real Estate Oh My.

The Frontline Zeroes of the Pandemic.


Without a doubt, many lenders were to blame for much of the PPP fraud. Banks, who generally oversee SBA loans make the process to acquire loans very difficult continued tough oversight during the Pandemic. However, other lenders like FINTECH companies have been blamed for poor oversight, and at a minimum have been investigated for allowing PPP loans to be fraudulently received.

Bloomberg reported about a University of Texas at Austin study in 2021 that Fintechs were found to be five times more likely to ok suspicious PPP loans.

As a company who sent many of its client’s applications to lenders including FINTECHs, we could clearly see the level of oversight differences. For instance, PNC Bank required much more back up for their loans and reviewed documentation with a fine-tooth comb. Other lenders like Cross River Bank prided themselves in using technology to speed up the review process. Clearly, one can see how many more SBA loans would be provided if banks did “technologically driven automation” to underwrite and review loan applications.

Clearly, there is much blame to go around, but there clearly was poor oversight with many of the SBA providers. Congress has recently held hearings and brought to light these issues.

Small Business Administration

While policy makers in Congress were quick to point fingers at the lenders and further call for going after fraudulent business owners, The United States Small Business Administration is one who many have suggested to share the blame.

In May the SBA Inspector General issued a report which reviewed PPP loans and how the SBA contributed to what is considered one of the best and worst government programs ever.

Among the findings, the Office of the Inspector General found:

  • There were no established procedures for PPP which could track and address potentially fraudulent applications. Therefore, lenders, many of who were not equipped with trained underwriting staff were left to look for fraud or accuracy.
  • There were no fraud risk frameworks established before the program was released.
  • The SBA was unable to handle the speed of which the program was delivered and employed.
  • Lenders had little guidance for how to handle certain situations, such as finding multiple processes to handle cautionary reviews or uncommon questions.
  • There were few steps established which checked for the accuracy of information, such as if someone had created a false 940 or 941 form.

The full report, which can be found here, describes the COVID-19 fraud and how the SBA contributed to the fraud in the report. In the report, the Office of the Inspector General said:

“The Office of Inspector General (OIG) found that the Small Business Administration (SBA) did not have an organizational structure with clearly defined roles, responsibilities, and processes to manage and handle potentially fraudulent Paycheck Protection Program (PPP) loans across the program. In addition, the agency did not establish a centralized entity to design, lead, and manage fraud risk. This problem occurred because the agency did not establish a sufficient fraud risk framework at the start of and throughout PPP implementation. Management stated this was partly due to the speed of the delivery of PPP and the continuous and rapid discovery of different kinds of fraud schemes. Lenders also were not always clear on how to handle PPP fraud or recover funds obtained fraudulently from the PPP that remained in the borrower’s account. SBA did not provide lenders sufficient specific guidance to effectively identify, track, address, and resolve potentially fraudulent PPP loans.

In the end of the report, the OIG recommended that the SBA establish clearly defined and detained roles, procedures and adopt procedures for finding fraudulent loans.


1 –

Dr. Thomas Tramaglini is the Managing Director for BRP Onesta, a company that supports small businesses. By offering a host of important and affordable services that small business owners tend to not have time to do themselves, the team at BRP Onesta can help small businesses grow infinitely. Although located in on the famous Jersey shore, BRP Onesta serves clients in all 50 states, Puerto Rico, Mexico and Canada.

What Small Business Grants Are, What They Are Not, and 5 Tips for Winning Grants.

There is quite a level of interest in grants for small businesses, especially following the COVID-19 Pandemic. However, while the interest from small business owners is high, it is evident that there is a level of misconception and confusion of what small business grants are and are not. This article addresses some of the confusion about small business grants, provides several tips key to be awarded a grant, as well as provides a list of places where small business owners can go to apply for small business grants.

By Thomas Tramaglini, Managing Director at BRP Onesta
About Thomas Tramaglini

What Are Small Business Grants?

Small business grants are sums of money provided by various agencies, public and private organizations, and government agencies. The sums of money provided in grants do not need to be paid back to the organization providing the grant.

Purpose – Along with most grants is purpose. That is, grants have purposes. For instance, State grants or Federal grants may focus on a bigger picture such as developing jobs or creating a new product that might help the public.

Restrictions as well as Reporting – Grants have restrictions and reporting requirements which generally ensure that the grant is being used the correct way. Further most grants have time limits for attaining results and reporting those results to an overseeing organization or entity.

Matching Funds – Many grants come along with a requirement for the organization to match the funds from the grant with their business’s funds. Matching funds can be tricky as many small business owners apply for grants with matching funds and do not even know that matching is a requirement.

What Small Business Grants Are NOT

Grants are not FREE money for small business owners to just use for their businesses for whatever reason they so choose. The grants that are typically available are not funds which are easy to get and as previously mentioned, the recipient needs to use the funds to satisfy the goals and objectives of the grant providers.

Further, typically grants are given to organizations which are stable and are not seeking funds to bridge a gap in the business’s financials. So, if you are a small business owner and you are looking for a grant that will catch your business up, don’t. In many cases, the financials (which the organization may ask for) of the company who is looking to bridge a gap or catch up will not be strong enough for the granter to send funds to the small business owner.

Where are the Small Business Grants at?

Looking for grants can be difficult. Grants can be found through specific state and local groups, non-profit organizations, as well as private groups. Usually, states and the federal government have websites or databases that list the grants that small businesses can apply for. Many of these databases can be found on departmental websites such as the US Department of Labor or State Departments of Commerce.

There are a lot of government agencies which do provide grants. However, it is important to know that business owners should really consider what they apply for before applying. This will save work and time later on when they go through the formal grant program.

Five Tips To Win Grants

  1. Provide a well-written grant application. A well written grant goes a long way. Those reviewing the grant want to see an educated, well-written grant application that is put together in a way that describes success for the grant activities hoped for with the grant of the organization.
  2. Provide complete and accurate information. Any applications for any grants which are incomplete or fail to provide accurate information can result in a negative grant outcome.
  3. Know the grant you are applying for. When a small business owner writes a grant, they need to understand what the grant is asking for and what will be done to satisfy the grant’s goals. Failure to understand what the grant is looking to achieve and what is expected will result in an automatic decline.
  4. Understand how the grant is being scored. It is important for the hopeful grantee to review the grant specs, as well as any technical assistance used to score the grant. Such an outline helps those writing the grant place what is required within the grant, helping satisfy the requirements of the grant.
  5. Bring in help if needed. If needed, do not be afraid to bring in grant writers, experts, or anyone else appropriate for the grant award. Usually, this is a requirement for most grants.

The BRP Onesta Grant Repository

The team at BRP Onesta constantly keeps up to date a list of ongoing grants, as well as a organization area for all types of grants.

The BRP Onesta Grant Repository Can Be Found Here.

Dr. Thomas Tramaglini is the Managing Director for BRP Onesta, a company that supports small businesses. By offering a host of important and affordable services that small business owners tend to not have time to do themselves, the team at BRP Onesta can help small businesses grow infinitely. Although located in on the famous Jersey shore, BRP Onesta serves clients in all 50 states, Puerto Rico, Mexico and Canada.

23 Reasons Why Business Loans Get Declined

Why did my deal get declined? This is a common question that we get from our clients. While the economy seems to be tightening, there are common ways that borrowers can understand what lenders are looking for and avoid being declined for small business financing. In this article we review thousands of declined lending applications and narrowed 23 specific reasons for why small business owners get declined for small business financing.

By Thomas Tramaglini, Managing Director at BRP Onesta
About Thomas Tramaglini

More Loans Are Declined Than Approved

While small business owners apply for financing for their small businesses, more deals are declined than won. From 2019 – 2021, over 60% of small business owners who applied for financing through our platform were denied for one of several reasons. From over 3,000 deals submitted we pulled together a list of common reasons for why lenders decline small business owners for business financing.

The Goal

The goal that any lender has is to get paid back on time. What reasons for decline really amount to is the risk of whether or not the lender believes that they will be paid back on time, in full. The greater the instability in the bank statements or financials, the greater the risk.

Simply put – when the lender gets paid back, they make money.

1. Judgements, Defaults, and Negative Payment History

When a lender sees that the borrower has had a negative payment history, defaulted on a loan or advance, or received a judgement its usually an automatic decline. We have written extensively on this in the past and more information can be found here.

When a lender finds any type of negative payment history in the past it is usually an automatic decline.

Lenders have become smarter than in the past with finding negative payment history through data clearing houses like CLEAR, LexisNexis, and Chex Systems. The alternative lending industry also has Data Merch which helps share between lenders who has had negative payment histories in the past.

2. Decline in Revenue

Most lenders use your previous 3 to 6 months of revenue to evaluate the financial health of your business. If your decline in revenue declines by 10% or more lenders can suggest that revenue is not stable, and you may not be able to pay back what you owe. Some industries are seasonal, and the lender may ask for more bank statements to gauge lendability. Some lenders will customize payments so that seasonal businesses can pay based on the average revenue of the season which they are in. Some lenders will also cut the amount they will lend if there is a decline in revenue.

3. Business Owner Has a Cash Business

We see many small business owners have some or most of their revenue in cash. This can be done to minimize tax exposure or just because its easier to not go the bank. Yet, when revenue is not in statements, lenders see that as risky behavior and if a default occurs then they may not get paid back. The moral of the story is to make deposits and stay away from having a cash business if your intention is to borrow money.

4. The Owner is Not the Owner

Most lenders who fund small businesses make sure that the businesses are owned by who is requesting the financing. Most lenders ask for things like the small business’s EIN letter or K-1 to show proof of ownership. When the owner cannot demonstrate proof of ownership, it demonstrates risk or in some cases fraud. They important thing is that most lenders want a majority owner to be responsible for the loan or advance, so they are paid back.

5. Business is Not in Good Standing

Many lenders want to ensure that they are dealing with a business that is in good standing with their state of registration. That is, have they fulfilled their reporting requirements of their state, paid their fees, and done what is needed to ensure that their business can legally operate in their state. If a business is either not in good standing or forfeited, most lenders will allow businesses to rectify the issue. However, in some cases the borrow has not maintained their business for too long which can cause a decline or in some instances the business to not be in business (or authorized to do so) causing a decline.

6. More Money Out than In

When lenders review bank statements they can easily see that when more money is going out than coming in, the company is losing money. Unless the company has great balances on the bank statements, it is likely that the deal will be seen as weak and declined.

7. Behind on Mortgage

Some lenders ask for a recent mortgage statement from the borrower. When a borrower is late on their mortgage, it demonstrates risk to the lender and could mean doom for the deal. Lenders want to see small business owners being able to pay their bills.

8. Borrower Fails to Say that He or She Took One or More Advances in the Past 30 Days

When one applies for a loan or advance from a lender, the lender wants to ensure that the borrower is going to be able to afford the obligation. When a borrower presents bank statements to a lender, approvals are based on the average revenue of expenditures and spending patterns therein. When an approval is made and then a month to date or during bank login its demonstrated that the borrower took another advance (or more than one) the deal is likely to get killed. No lender wants to give an approval and then see that the borrower has taken money. This suggests risk and likely becomes an instant decline. Some lenders will allow an advance but not knowing about it is a reason for decline.

9. Borrower Took One or More Advances in the Past 30 Days

Most lenders have rules where they will not fund a borrower if they have taken on funding in the past 30 days. Unless the withhold is in the range of affordability, that is the amount that a merchant pays cumulatively is within the allowable range by the borrower, most deals showing funding taken in the past 30 days will be killed. Lenders see this as risk and an indicator of future decline.

10. Amount Borrow Owes is Too High

If a borrower already has 20 -40% of their monthly expenditures going out to pay debt, especially on advances or loans the lender is likely to decline the deal. Owing too much is an indication that the business may fail, or money borrowed may not be paid back. This may be indicated by the lender saying there is no room, or the borrower is over the withhold limits.

11. Borrower is in a Reverse Consolidation Program

Some small business owners who have multiple loans or advances may be in a reverse consolidation program. When they are in a reverse consolidation program, the lender provides weekly deposits into the small business’s bank account so the borrower can make its payments. As payments fall off when paid off, the amount paid daily to the reverse consolidation lender does not decrease. When most lenders see a reverse consolidation in the borrowers’ statements they run. When a borrower in a reverse is funded, the reverse lender usually automatically stops their deposits, still requires to be paid back, and in most cases provides penalties for breaking their contract. Without the influx of funds the borrower will have a hard time making their payments and in many instances defaults. So, when lenders see reverse consolidations, they decline.

12. Previous Stacking

When a lender sees a borrower take two or more advances or loans at the same time its is called stacking. When underwriters gauge risk and the lender makes an offer, it’s based on the information in the statements that were provided. When a borrower is seen stacking or taking more than one offer at the same time lenders will not want that to happen to them so they will decline the deal. The lender also sees that even if the borrower is not stacking on the lender now, they may take another advance later on which would bring on more risk to the lender and suggest a decline is in order.

13. Too Many Insufficient Funds of Negative Days

When bank statements are presented and they show some or lots of negative days, it suggests that lenders may not be paid back. Most lenders have rules for how many NSFs or negative days they will allow. However, make no mistake – if there are NSFs in statements it is going to be a killer.

14. Negative Trade or Landlord References

One thing that we saw was that after a deal was approved, it was killed because lenders will check references from time to time. Landlords and trade references are asked about their experiences with the client. If the client is difficult to work with or has a negative history with the trade reference or landlord, the lender may kill the deal.

15. Non-Business-Related Expenditures

Many of the upper tier lenders will scrutinize the expenditures on business bank statements. If business bank statements demonstrate there to be expenditures which are not business related it can suggest risk to the lender. Here are some expenditures that brought on declines over the past year from lenders to our clients:

  • Too many trips to restaurants – meals are not typically what lender want to see in business bank statements so too many expenditures for fast food or lavish restaurants can bring about a decline.
  • Visits to stores for personal purchases.
  • Trips to adult entertainment establishments. Just a no-no. However, about 4% of our applications
  • Payments for things like personal mortgages and cars can bring a decline. For instance, if you are a trucking company and you have a BMW payment in your statement it can draw attention.

16. No Financials Available When Lender Asks for Financial Statements

For deals that are larger, most lenders will require financials. That is, a current profit and loss statement, a well as a balance sheet. When small business owners cannot produce financials, it is a sign of weakness to lenders. Financials provide the business owner a level of granular attention to operations and when larger deals are in the works, the lender would want to 1) know that the business has a grasp on its financials and 2) has positive balance sheets showing cash on hand and the business’s ability to service the debt.

17. Tax Liens

Although tax liens are not a deal killer two instances have caused deals to be declined. The first is that the borrower has liens which are excessive. For instance, if a lien is over $200,000 or whatever the threshold is for the lender it will bring an automatic decline. Also, an automatic decline may occur if the lender finds that the borrower has a lien but there is no payment plan intact.

18. Settlement in Statements

Sometimes, borrowers who have had difficulty on previous loans or advances and chose to use settlement companies to settle their debt. Not that this is the end of the world, but when a lender sees that they borrower has payments coming out on their statements to a settlement company it raises a red flag, and an automatic decline. If a company uses a settlement company, it demonstrates that the borrower could not make its commitment to the lender.

If a borrower cannot or could not make its payments previously then why would a lender lend any funds to the borrower?

19. Recent Bankruptcy

While some lenders will allow borrowers to fund if they have had bankruptcy, most borrowers require the bankruptcies to be discharged or closed before funding. Some lenders have time requirements such as funding after 2 years following discharge. If a borrower has a bankruptcy which is very recent, it indicates that they may not pay back their financing.

20. Failure to Allow for Decision Logic or Bank Login (authentication)

Part of what most lenders do before funding is they authenticate a borrower’s bank account. Such a process ensures that the borrower is not negative in their bank account, that they have not taken another advance, that their statements provided to the underwriter can be confirmed, as well as the account and routing numbers are correct. One would not want funds to be sent to the wrong place.

When a borrower refuses to comply with the authentication process, most lenders will automatically decline the deal. There are a few lenders like Wide Merchant Group who does not require decision logic or bank login, but most companies want to do authentication because it makes their transaction safer.

21. Failure to Pass the Merchant Interview

Most lenders conduct one or a series of calls with a borrower before their funding occurs. The content of these interviews can range from purpose of using the funds to specific questions about businesses. When deals get killed during the interview, the main reason is that the borrower has not been honest about something from the past, what his or her intention is for using the funds or demonstrating the want to pay back the funds.

22. Criminal History

Most lenders will shy away from borrowers who have a negative criminal history. Some lenders will specify infractions not allowed in their review as well. For instance, borrowers who commit burglary or fraud are going to get declined by just about every lender. Some lenders will fund those who had a drug charge 7 years earlier. All capital crimes are a decline. The safe thing to say is that if a small business owner has a negative criminal history, he or she will have their deal declined.

22. Fraudulent Bank Statements

With photoshop (and other software) and the ability for borrowers to doctor bank statements, we see fraudulent bank statements regularly. Few fraudulent statements get to funding. With good underwriting, as well as bank authentication, lenders can smell fraud in statements relatively easy. Few people who try to provide fraudulent statements have the skill and ability to provide statements which look authentic and can pass meta-data checks.

Obviously, when fraudulent statements are found, lenders decline. There are times lenders may report this fraud to the authorities.

Need Financing and Having Trouble Getting Approved?

Have you had issues in the past getting funding because of one of the reasons below? We can help. Please contact us immediately and one of our advisors will call you within minutes.

Dr. Thomas Tramaglini is the Managing Director for BRP Onesta, a company that supports small businesses. By offering a host of important and affordable services that small business owners tend to not have time to do themselves, the team at BRP Onesta can help small businesses grow infinitely. Although located in on the famous Jersey shore, BRP Onesta serves clients in all 50 states, Puerto Rico, Mexico and Canada.

How to Handle Late Payments Without Losing Customers

Whether you’re a young, aspiring entrepreneur or a successful leader in academia, you depend on your customers and clients to pay on time, every time, and you need straightforward policies and processes to make that happen. If your customers are late with their payments, your business has to handle the situation with kid gloves because the last thing you want to do is lose a customer. Here are some tips for how to tackle late payments without offending your clients.

By Julie Morris, Guest Contributor and Author

Attempt to Avoid Late Payments in the First Place

In a dream world, your customers will always pay on time and you’ll never have an issue, but that is not reality. However, you can get as close to that as possible by creating a clear and concise payment policy and placing it on your website and your invoices. Yonyx points out that this policy should list all acceptable payment methods and spell out your terms, such as when a payment will be considered late and penalties if a late payment does occur.

Your payment policy should also be clearly stated in all documents that your client or customers receive when they first start working with your company. If the amount of money in question is significant, you may want to work with an attorney to write up a contract. Be sure to work with the business partner during this process so that the document is fair to both parties.

The point is that you want something to point to if a customer is late with the hope that they will understand their obligation and complete the payment ASAP. When customers or clients are late with payments, make sure you’ve sent the invoice to the right person, coordinate your invoicing with the customer’s billing cycles, and/or offer a discount for quick payment. You can also spruce up your invoices to make them more memorable by using a free invoice generator to create a branded invoice that leaves a more professional impression.

It is also a smart idea to invest in payroll software that can properly process and organize payments so you know which clients have paid and which have not. The last thing you want to do is accuse a customer of being late when you actually have received their payment and it slipped through the cracks.

Another way to ensure timely payments is to make it easier for your clients and customers to pay you. When you accept payments through your app, you’ll simplify the payment process, but you need to ensure that your customers’ sensitive financial information is protected. Fortunately, you can use a tool to authenticate bank account information for secure payments.

Polite Follow-Ups

Once you realize that a payment is late, it is time to send a follow-up, but remember you do not want to be overly demanding or threaten litigation at this point. Start by sending an email that reminds the customer of the item you sold or service you completed and the cost for that work, and remind them that they have a past due payment.

If you do not get a response, this may be a good time to call the client’s company and inquire with a different employee about how to be paid. In some cases, the person who requested the service is not the same individual that handles invoices, so ask for the billing department just in case.

If a phone call is required for the follow-up, Practice Ignition suggests keeping it nice and polite. Phrases like “this is a friendly reminder” and “I’d appreciate it if…” are a good way to start. If the customer states that they don’t have the funds to pay the bill in full, you might consider allowing a partial payment or creating an alternative arrangement that fits both of your needs.

Make the Payment Process Easier

Organizations that are finding that they have payments arriving late on a constant basis may want to look at their payment processes and make them simpler to use for the customers. Give your clients multiple avenues to make their payments, be it over the phone, through a web portal, or by mail.

You may also consider sending out automated reminders to your customers. These can be sent out a few days prior to a due date, on that day, and a week after the due date if payment is not made. By receiving automated messages that are sent by a computer, your customers will know that this isn’t a personal attack. Another benefit of setting automated reminders is that you will never forget to ask for a payment, and sometimes, that can be half of the battle.

If you are looking to keep your organization running on full steam, get the payments you’ve earned through the tips above.

About Julie Morris

Julie Morris is a life and career coach. She thrives on helping others live their best lives. It’s easy for her to relate to clients who feel run over by life because she’s been there. After years in a successful (but unfulfilling) career in finance, Julie busted out of the corner office that had become her prison.

Today, she is fulfilled by helping busy professionals like her past self get the clarity they need in order to live inspired lives that fill more than just their bank accounts. When Julie isn’t working with clients, she enjoys writing and is currently working on her first book. She also loves spending time outdoors and getting lost in a good book.

Read her articles here

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The Complete Guide to Business Credit: What is Business Credit?

One of the questions we are asked frequently is what is business credit? This article explores the main concept of business credit and some of the benefits of establishing and building business credit. We also provide some of the barriers that small businesses encounter when establishing and building business credit and some things that small business owners should expect.

By Thomas Tramaglini, Managing Director at BRP Onesta
About Thomas Tramaglini

Business Credit: What is it?

Nearly every successful business has established business credit. When the business wants to grow or expand they do not need the personal funds of the business owner(s) to fund their projects.

When a business is able to use their established business credit, the business has demonstrated to creditors that they have an ability to perform on paying its financial obligations according to the terms of its contracts from their creditors. That is, business credit is how well the business takes on debt and pays its bills over time.

How is business credit different than personal credit?

Business credit is the establishment, building, and maintaining of a successful borrowing and payment of credit on goods and services. Business credit is established under the business’ Employee Identification Number (EIN) and is not associated with the business owner’s social security number.

Personal creditors like loan companies and credit card companies report your payments to the three consumer credit bureaus (Transunion, Experian, and Equifax). Business creditors do not report your borrowing and payment history to your personal credit. Instead, borrowing and payment history is reported to business credit bureaus (Dun & Bradstreet, Experian, Equifax, Creditsafe). The business credit bureaus score history and provide an estimate of the business’s risk, or ability to repay a loan or other financial obligations, similar to personal credit.

On average, small business owners have 50+ lower FICO scores.

The advisors at BRP Onesta work with a large cross-section of small business owners to provide a host of back-office solutions and offer an affordable, world-class commercial lending platform.

With the need for small business loans and other financial solutions, on average our clients’ personal credit scores (FICO) are 50+ points lower than the Equifax average score of 698 that was reported in 2021.

Therefore, it is in every small business owner’s best interest to establish and build their business credit as a major advantage is that they can separate their business finances from their personal wealth, ultimately protecting themselves.

Other advantages of business credit

  • Most ability to borrow is double for what it would be on your personal credit.
  • Perfect for startups.
  • Easy and fast to establish credit.
  • Building business credit makes.
  • You do not have to have outstanding personal credit to build and use business credit.
  • Most business credit financing does not require financials for approval.
  • Your business will become much more valuable.
  • No collateral required.
  • Usually, no financials or business bank statements needed for applying (No Cash Flow Requirements).

Does your business have any business credit?

Many times, business owners tell our advisors that they have a lot of business credit. For instance, we are told that the business owner has a business credit card, or they have their car in their business’s name.

Having a business credit card or a car in your name does not mean you have business credit. If you do not know, NAV has a great free tool to gauge what you have on Experian, Equifax and Dun and Bradstreet Business Credit Scores.

Business Credit Programs Work

One of the most valuable investments that a business owner can make is by establishing their business credit. Establishing business credit is not hard, however there is a lot that goes into building one’s business credit such as understanding the process and applying for the right tradeline at the right time.

There are several different business credit programs our there and business owners should examine those programs before they get into any process. For instance, the program we provide allows small business owners to take a test drive before they spend one cent on programming. Some companies will charge you up front thousands of dollars and have a time limit for their work with you. Many times, the time it takes to establish and build business credit surpasses the time the company gives you, unleashing hidden costs. Programs like BRP Onesta’s do not have time limits.

Do It Yourself Usually Not Successful

Many different companies will provide business credit programs that are mostly do it yourself. That is, the majority of the work for Business Credit tends to be placed on the business owner. When that happens, we estimate about 85% of our clients (who have done our DIY model) never actually can attain any business credit past the basic business credit where anyone can get what is offered (Uline, Grainger). Not that those tradelines that are basic are good, they will not provide your business cash and certainly when more advanced business credit needs are required, the small business owner will be declined.

Biggest Barriers for Building Business Credit

We have been working with small business owners to build business credit for many years. We know that small business owners struggle with the following aspects of building business credit before they try to establish their tradelines:

  • Unsure of what goes into business credit approvals.
  • When business owners assume that they already have plenty of business credit.
  • Lack of understanding of what business credit is.
  • Fail to have established what creditors suggest are indicators of business creditworthiness (some examples below).
  • No business address.
  • No phone number for the business.
  • No website.
  • No domain.
  • No business email with a business domain.
  • No web presence on social media.
  • Not found on Google.
  • Just do not have the time.
  • Failure to know who gives business credit and who does not.

Coaching Models Works

Models that coach small business owners seem to be the best way for small businesses to establish and build their business credit. These coaching models are deliberate, support the business owner, and have a human being who is experienced advising the client.

For more on a coaching model, click here.

TONS of misinformation out there

Like anything online, there is a lot of information out there which is not true or just wrong. Many of our clients go to and spend lots of time on YouTube or reading stuff that is just not accurate. In some cases, clients do things which hurt their business credit such as apply for business credit cards before they have the preliminary business credit that is needed.

Companies like ours provide a team which will not only provide you accurate information but teach you about what you want to do. In fact, our advisors will walk you through every step of the way so you do not make mistakes in the work that you are doing towards your business credit goals.

Three things to watch out for when choosing a business credit program

1. Do it yourself plans.

Most do it yourself business credit models are on the surface great ideas. However, they are counterproductive because they amount of time and lack of information you have will never outweigh the efficiency and effectiveness of working with trained experts. The best programs are those which have live support, even if those plans are temporary and limited in scope.

2. SCAMS by those who do not know what they are doing.

Experience matters. Business credit development can be an art because it is different than building personal credit and many people who claim they are going to build business credit and use a canned program will never build anyone’s business credit.

When you are going to work with someone on business credit the people working with you should answer simple questions such as, What is business credit? How is business credit different than personal credit? How long does it take to build your business credit? Or What are creditors that will give you business credit when you have none or only a little business credit and which creditors require preliminary business credit for an approval?

3. Business credit is more than just business credit

Business credit is not just business credit – its way beyond business credit. So, anyone who tries to tell you different you should consider working with someone else. Business credit requires business credibility, without one cannot get approved for business credit (beyond basic). Furthermore, important pieces of business credit go way beyond having your Dun and Bradstreet address match that on the EIN letter and articles of organization or incorporation. Business credit includes web presence, knowledge of how lenders interact with borrowers, as well as when and who to apply for tradelines.

Before considering building your business credit one should know what business credit is and what value building business credit will have for the business. Business credit makes businesses more valuable and allows owners to separate their personal finances from their business, something that most small business owners fail to do.

For more information and a free assessment of your business credit, click here (no obligation).

Dr. Thomas Tramaglini is the Managing Director for BRP Onesta, a company that supports small businesses. By offering a host of important and affordable services that small business owners tend to not have time to do themselves, the team at BRP Onesta can help small businesses grow infinitely. Although located in on the famous Jersey shore, BRP Onesta serves clients in all 50 states, Puerto Rico, Mexico and Canada.