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Residential home used as collateral for business loan

Shedding Light on Secured Alternative Funding

Business cash advances are expensive, so why should I sign my house as collateral? Great question. The idea behind this product is that a larger amount of capital would be offered in the initial advance. Traditionally an offer would be no higher than 1.5 times the average monthly revenue. In deal with property collateral, the offer would be 2 to 3 times the average monthly revenue. For this reason alone, it allows a merchant to do more with more money. Now you are probably wondering, when more money is lent doesn’t that mean that there is a shorter payback term? Generally, this all depends on what type of borrower you are, but if the loan is backed by property, there is more ‘guarantee on the money’ so lenders will be more comfortable extending the term of the loan, which for you means a lower payback weekly.
Here we are talking about a business cash advance that is secured by property. This product is fairly new to the alternative financing industry, so here are some things you should know:

  • Receive up to 2 to 3 times monthly revenue
  • Ability to offer receive money gives owner power to payoff past advances
  • Weekly payback program, instead of a daily payback program
  • Opens the door to more advance options
  • Break away from credit score as a main deciding factor
  • Ability to still have a mortgage and tap into equity that you already paid off. The advance is still backed by the business, but can use multiple properties to secure the loan.