How to get a Working Capital Loan with a Tax Lien?
If you have a tax lien on your business and you have been searching for funding, you know how difficult it can be. Many business owners are in the process of negotiating payment plans with the IRS, or they may be disputing the amount owed.
Emergencies happen and finding working capital is an important part to any business. However, at what cost should a business accept a working capital loan? Is bridge financing good for all businesses? What is the real cost of a merchant cash advance? These are all great questions and below we'll discuss strategies for businesses with tax liens that need working capital.
What Sources are Available?
Hard Money Loans & Venture Capital:
Depending on your monthly sales revenue you may qualify for a loan from a hard money lender or a bridge financing company, even with a tax lien. Business owners should be aware that these loans and financing sources usually use a fixed factor rate for the payback of the loan. These factor rates are generally very high, anywhere from 1.35-1.55, meaning to figure out the payback amount you take the amount borrowed and multiply it by the factor rate.
Business owners should be wary of any companies looking to charge an application fee for this type of financing. In most states it is illegal to charge an upfront application fee for a loan or cash advance. We recommend using a reputable online business funding brokerage such as eMerchantBroker.com. They also offer merchant services for business owners.
Merchant Cash Advances:
If your business accepts credit cards as a form of payment from your customers than you may qualify for a merchant cash advance, regardless of credit. There are only a handful of merchant cash advance providers that will approve businesses with tax liens.A merchant cash advance is a form of receivables financing, or "factoring" that uses strictly credit card sales as the basis for lending. Again we recommend using a reputable broker that can help you compare offers from a variety of lenders. Check out http://www.emerchantbroker.com/merchant_cash_advance for more information.
Receivables Financing with ACH Pay back:
If you have proven sales revenue for at least one year, you may qualify for ACH funding program. This program is available even if your business does not accept credit cards. A lender will purchase a portion of your future sales for a discounted rate. The lender will collect the payback amount through daily ACH withdrawals from the merchants' bank account. We also recommend using eMerchantBroker.com to select your ACH funding lender.
Tax Lien Strategies:
If you have a tax lien and you are looking for business funding, be sure to get a CPA. Many lenders will accept a notarized letter from a CPA stating that they are working with the IRS to solve your tax lien issues. Lenders understand that payment plans with the IRS can take a long time to negotiate. They are also willing to lend the full amount of the tax lien if there is sufficient sales revenue to support the amount.
Be sure to know your credit report well, the more information you can give your broker, the better job they can do of matching you up to the right lender. For instance if you have judgements on your credit report and tax liens, that limits your available lenders to only 1 or 2 in the nation. If you don't tell your broker about the judgement you could waste valuable time sending your application to the wrong lender.
Bottom line, to get a business funding or a working capital loan with a tax lien be sure to deal with a broker and visit http://www.emerchantbroker.com
Emergencies happen and finding working capital is an important part to any business. However, at what cost should a business accept a working capital loan? Is bridge financing good for all businesses? What is the real cost of a merchant cash advance? These are all great questions and below we'll discuss strategies for businesses with tax liens that need working capital.
What Sources are Available?
Hard Money Loans & Venture Capital:
Depending on your monthly sales revenue you may qualify for a loan from a hard money lender or a bridge financing company, even with a tax lien. Business owners should be aware that these loans and financing sources usually use a fixed factor rate for the payback of the loan. These factor rates are generally very high, anywhere from 1.35-1.55, meaning to figure out the payback amount you take the amount borrowed and multiply it by the factor rate.
Business owners should be wary of any companies looking to charge an application fee for this type of financing. In most states it is illegal to charge an upfront application fee for a loan or cash advance. We recommend using a reputable online business funding brokerage such as eMerchantBroker.com. They also offer merchant services for business owners.
Merchant Cash Advances:
If your business accepts credit cards as a form of payment from your customers than you may qualify for a merchant cash advance, regardless of credit. There are only a handful of merchant cash advance providers that will approve businesses with tax liens.A merchant cash advance is a form of receivables financing, or "factoring" that uses strictly credit card sales as the basis for lending. Again we recommend using a reputable broker that can help you compare offers from a variety of lenders. Check out http://www.emerchantbroker.com/merchant_cash_advance for more information.
Receivables Financing with ACH Pay back:
If you have proven sales revenue for at least one year, you may qualify for ACH funding program. This program is available even if your business does not accept credit cards. A lender will purchase a portion of your future sales for a discounted rate. The lender will collect the payback amount through daily ACH withdrawals from the merchants' bank account. We also recommend using eMerchantBroker.com to select your ACH funding lender.
Tax Lien Strategies:
If you have a tax lien and you are looking for business funding, be sure to get a CPA. Many lenders will accept a notarized letter from a CPA stating that they are working with the IRS to solve your tax lien issues. Lenders understand that payment plans with the IRS can take a long time to negotiate. They are also willing to lend the full amount of the tax lien if there is sufficient sales revenue to support the amount.
Be sure to know your credit report well, the more information you can give your broker, the better job they can do of matching you up to the right lender. For instance if you have judgements on your credit report and tax liens, that limits your available lenders to only 1 or 2 in the nation. If you don't tell your broker about the judgement you could waste valuable time sending your application to the wrong lender.
Bottom line, to get a business funding or a working capital loan with a tax lien be sure to deal with a broker and visit http://www.emerchantbroker.com