Frequently Asked Questions

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General Questions

SVP Funding Group is a site for a company that aids businesses in securing funds. They provide loans or funding solutions, acting as a “cash boost” for those in need. The site likely details how they assist in borrowing money or financial planning.

Imagine it as a hub for businesses seeking financial support. It’s where they go to find funds for their goals. Whether it’s opening a new store, buying equipment, or expanding their team, they can find help here.

A **merchant cash advance** is a way for businesses to get money quickly by borrowing against the money they expect to make in the future from their sales. Imagine you own a lemonade stand and you know people will buy a lot of lemonade next week. But you need money *now* to buy lemons and sugar. With a merchant cash advance, a company gives you the money upfront, and then you pay them back a little bit each time you make a sale, usually from your credit card payments. It’s like getting an advance on your future lemonade sales, but you have to pay back a bit more than you borrowed as a fee.

A revenue advance is like borrowing money based on money you’re expecting to get later. Imagine you’re selling lemonade and you know you’ll make $50 in the future. But you need some cash right now to buy more lemons and sugar.

A revenue advance would give you a part of that $50 ahead of time. This way, you can keep your lemonade stand running smoothly. You’ll get the rest of the money later, after you sell all your lemonade.

But, you have to pay back the advance plus a little extra as a fee. This is how it works.

Unlike traditional loans, MCAs are easier to qualify for. They also offer flexible repayment terms. Repayments are tied to the business’s revenue. This means the business only pays back what it can afford.

But, MCAs often have higher fees and interest rates. They are popular among small businesses. These businesses need quick access to funds but may not qualify for traditional financing.

A business line of credit is like a special borrowing tool for businesses. It’s like a piggy bank you can borrow from whenever you need it. You only pay back what you take out, plus a little extra as a fee.

For example, if a business needs $100 to buy supplies today, they can take that amount from their line of credit. Later, when they earn money, they can put it back into the piggy bank to pay off what they borrowed. It’s a flexible way for businesses to get money when they need it without taking out a big loan all at once.

An SBA loan is a special kind of loan for small businesses. It helps them get money to grow or start up. The “SBA” stands for **Small Business Administration**, which is a government part that helps small businesses succeed.

Here’s how it works: A bank or lender gives the business the money. But the SBA promises to help pay back the lender if the business can’t. This makes it easier for small businesses to borrow money because the risk is shared.

It’s like having a co-signer on a loan, but in this case, the government is helping out!

A **merchant cash advance** is a financial tool where a business gets a lump sum of money upfront, and then repays it using a portion of their future sales. Here’s how it works: Let’s say a business needs $5,000 to buy inventory or equipment. A lender gives them the $5,000 right away, but instead of paying back a fixed amount each month (like a traditional loan), the business pays back a small percentage of every sale they make, often through credit card transactions. The repayment happens automatically as customers buy from the business.

The total amount paid back usually ends up being more than the original $5,000 because of fees. It’s a quick way for businesses to get cash when they need it, but it can be more expensive in the long run compared to other types of loans.

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The time it takes to pay back a merchant cash advance (MCA) varies. It can be a few months to a couple of years. This depends on the lender’s terms and the business’s sales.

Unlike regular loans, MCAs are paid back through a percentage of daily credit card sales. So, how fast the business makes money affects the repayment time. Usually, businesses pay back the advance in 6 to 18 months.

Businesses often need working capital to cover short-term costs. This includes buying inventory, paying employees, or dealing with unexpected expenses. It’s very helpful during busy seasons or when a company is growing fast.

Working capital keeps operations running smoothly. It helps businesses meet their financial duties on time. This way, they can avoid delays and keep things moving.

The amount of working capital a business needs varies. It depends on its size, industry, and how often it operates. A common rule is to have enough for three to six months of expenses.

Expenses include payroll, inventory, rent, and utilities. Businesses should also think about seasonal changes and unexpected costs. This helps them keep operations running smoothly.

Doing a cash flow analysis can help figure out what’s needed. It shows how much money is coming in and going out. This helps businesses plan better and stay financially stable.

The amount you can get with a merchant cash advance (MCA) depends on your business’s income and sales. Lenders look at:

1. Monthly Sales: More sales mean bigger advances.
2. Business Stability: A steady income helps your chances.
3. Creditworthiness: Your credit history matters, even with MCAs.

Businesses can get advances from a few thousand to hundreds of thousands of dollars. To know exactly what you can get, talk to lenders. They can give you a better idea based on your business.

You don’t need perfect credit for a merchant cash advance (MCA). This makes it easier for many businesses to get funding. We look at your business’s cash flow and revenue more than your credit score.

This approach helps businesses with less-than-ideal credit. If your sales are strong and income stable, you can get funding. It’s a chance for businesses to get the money they need, even with lower credit scores.

If you need more money or want to renew your merchant cash advance (MCA), you have a few choices:

1. Renewal Options: We offer renewal options. You can extend your current MCA or increase it, if your business meets their criteria.

2. Refinancing: Looking to combine multiple advances or lower payments? Refinancing might be for you.

Capital funding and bank loans are two different ways to get money for your business. Each has its own special features:

Capital Funding:
1. It usually comes from private investors, venture capitalists, or equity financing.
2. You don’t have to pay it back like a loan. Instead, investors get a return on their investment (ROI) through profits or equity.
3. You might have to give up some of your business’s ownership.
4. It’s often more flexible with funding terms and uses.
5. Investors take on more risk, as their returns depend on your business’s success.

Bank Loans:
1. Banks or credit unions provide these loans.
2. You have to make regular payments with interest, no matter how your business does.
3. You don’t have to give up any ownership or equity in your business.
4. They often have strict rules, like credit checks and collateral.
5. You keep all the risk, as you must pay back the loan, even if your business fails.

In short, capital funding is about investing and equity. Bank loans are about borrowing money with a fixed repayment plan.

The differences between capital funds and venture funding can be summarized as follows:

Capital Funds
– Definition: A broad category of financing that includes various sources of capital for businesses. This can be in the form of equity, debt, or hybrid instruments.
– Target Audience: Generally focuses on established businesses looking for funding. This is to expand, manage operations, or make acquisitions.
– Risk Profile: Typically lower risk compared to venture funding. This is because it often involves companies with proven revenue and a stable business model.
– Investment Type: Can involve loans, lines of credit, or equity investments. This depends on the specific needs of the business.

Venture Funding
– Definition: A specific type of equity financing that invests in early-stage startups. These startups have high growth potentials in exchange for equity ownership.
– Target Audience: Primarily focuses on startups and early-stage companies. These companies may not yet be profitable but have innovative ideas or scalable business models.
– Risk Profile: Higher risk due to the nature of startups. Startups have a higher failure rate but also the chance for significant returns if successful.
– Investment Type: Usually consists of equity investments. Venture capital firms often take an active role in guiding the company.