Funding situations

Funding with an existing term loan: the payment is the question.

A term loan is a fixed monthly obligation. The review asks how much room is left on top of it.

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The short answer

At Merchant Fund Express, here is the short answer: An existing term loan is a fixed monthly payment. The question is how much room remains and which position the new product takes.

How it is read

The payment goes on the list of recurring debits. Because it is a monthly figure, it is easy to compare against monthly revenue.

A worked picture

Item	Figure
Monthly deposits	$46,000
Existing term loan	$2,100 a month
Advance payment, illustrative	$6,200 a month
Combined share	About 18%

All figures in worked examples are illustrations of the arithmetic, not offers or quotes. Real terms depend on your file and the funder.

Source: Merchant Fund Express.

Product fit

A new term loan on this site is first position only. A line of credit can sit in second position. A revenue-based advance is the other path. See position limits.

See SBA loan and open line of credit.

In practice

An owner with a $2,100 monthly term loan and $46,000 in deposits is offered an advance at about $6,200 a month, 18% combined. A new term loan would need first position, which she does not have; a line of credit can sit behind. The product choice followed the position.

Source: Merchant Fund Express.

Common mistakes to avoid

Not counting the loan payment

Assuming a new term loan is possible

Not checking position rules

Not disclosing the lender

Keep reading

SBA Loan — How an existing SBA loan is read: the payment as a debit, lien position and what a second source of funding can and cannot do.

Open Line of Credit — How an open line is read, why stacking another facility behind a line is restricted and how to add capacity the right way.

Position limits and stacking —

Funding Situations — Find the page that matches your funding situation.

Funding requirements —

No Credit History — How a file with thin or no personal credit history is read, what the minimum score means and what builds a record quickly.

Non-Profits — Why non-profits are outside the published tiers, what the rule says and what to consider instead.

MCA Guide — Every MCA question we publish, organized.

Common questions

Does a term loan count as a position?

Advances are counted as positions. Disclose the loan either way. Source: Merchant Fund Express.

Can I refinance it?

Sometimes, into a new term loan or a line, if the file qualifies.

Does paying it down help?

It frees capacity.

What if the loan is at my bank?

Disclose it and the terms.

See what you qualify for

Merchant Fund Express gives a same-day decision. Applying takes a few minutes and will not affect your credit score.

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