Finance & Lending

Invoice factoring is when a business sells the invoices owed to them at a discount to a third party called a factoring company, and the factor company collects from the business’s customer directly.   The business selling their invoices is not required to tell the customer, but the customer will receive a notification of assignment from… Read more »

Purchase order financing, also known as PO financing, is when a third party loans a business the money to increase production and meet the needs of a customer in exchange for payment with interest once the customer pays. It is similar to a small business loan in that you can get the financing you need… Read more »

UCC liens are common public records that give a lender the right to obtain and sell a borrower’s assets if they default. But don’t worry if you see them, as they are standard practice. However, if a business has too many UCC liens, it makes it harder to get a loan, as there are less… Read more »

Your debt service coverage ratio is a calculation that shows the percentage of cash available to make loan payments after subtracting other expenses, and it is used by lenders to determine how risky your business is to lend to.   A ratio of 1 means that your business has the exact amount of capital required to… Read more »

Lenders use UCC filings to show what they can claim if a borrower defaults on a loan. In addition to listing what the lender is legally entitled to, the report can also show other UCC filings from previous loans. Whichever lender files first is the one that gets first access to the listed assets, and… Read more »