New Jersey Business Loans Through
Spencer Savings Bank

Determining the best type of loan for your business comes down to a few aspects:

Use of Proceeds:

• A small business line of credit is generally used for working capital where a small business loan can be used to purchase fixed assets, debt consolidation, inventory or capital, and leaseholder improvements.

Terms:

• A small business line of credit is a revolving account that let borrowers draw, repay, and redraw from available funds whereas a small business loan is a lump sum of money that is repaid over a fixed term.

To choose the small business financing that is right for your business, the following qualifications are needed to get started.

• Business operations 2 years or more
• Guarantor credit score of 680 or better

Before talking to your loan specialist there are a few important factors to know:

• How much money do you need to borrow?
• When do you need the money?
• What do you need the money for?

Knowing your situation narrows down what types of financing and allows us to offer you the financing that best fits your situation. Spencer’s team of loan specialists are always available to help talk you through your options and point you in the best direction. With expedited funding and rapid decision making, Spencer Savings Bank is one of the premier small business lenders in New Jersey.

Each loan has different requirements. For small business loans under $100,000, Spencer typically requires:

• 2 years or more of business operations
• Guarantor credit score of 680 or better
• Credit Application

For small business loans over $100,000, Spencer will also need the following items:

• Personal Financial Statement
• Two Years Signed Business Returns
• Two Year Signed Personal Returns (all guarantor)
• Debt Schedule
• 3 months business bank statements
• Insurance certificate
• Invoice (equipment loans)

The best way to get a small business loan is to analyze your cash flow, annual revenue, credit score and to develop a clear plan and explanation of where the loan dollars will be applied, and how long it will take you to pay it back.

After speaking with one of our business lending specialists, you will be able to see what loan(s) will be available to you. We do highly suggest ordering a credit report to see exactly where your credit stands. If you are close to being in good standing, it is worth trying to increase your score, then applying for financing.

Simply put – relationships. Online lenders may have representatives, but Spencer Savings Bank is in New Jersey and our branch representatives are available to meet with you and will be there to help your business grow. A traditional bank generally offers lower rates, and our lending process is designed to make sure you are in the best standing to succeed. That is why at Spencer Savings Bank you are more than just a customer, you are a partner. As you grow, so do we.

A solid guide to qualify for a business line of credit is to have strong revenue, a few years of business operations, and collateral.

Documentation you should have ready includes personal and business tax returns, bank account information, profit-and-loss statements, and a balance sheet.

At a minimum, you will need at least 24 months of business operations, $300,000 in annual revenue, and a 680 credit score to qualify for a small business line of credit.

Spencer Savings Bank will give your small business access to a specific amount of financing set by a credit limit, which you can draw from for business expenses, as needed. A small business line of credit is subject to credit review and annual renewal.

A business line of credit does not incur any interest until it is drawn upon. Business owners will apply for a line of credit as an added safety net in case unforeseen circumstances appear for their business. In the event you need equipment repairs, inventory, building maintenance, or temporary cash, a line of credit is a great resource.

A secured business line of credit requires the borrower to have collateral. This means the applicant must provide security to Spencer Savings Bank by including property or equipment as collateral for the value of the credit to reduce the risk the bank is taking.

An unsecured business line of credit does not require specific collateral. Unsecured credit lines can come with higher interest rates.

The cost of a small business line of credit is relative to the amount a business applies for and the interest associated with the loan.

A small business line of credit is a flexible loan that provides working capital to business owners for a defined amount of money that can be accessed as needed and repaid either immediately or over time. It is typically known as a resource for covering costs such as payroll expenses, unforeseen emergencies, or to explore new opportunities with the security of knowing you can afford it. They usually also offer higher limits, lower rates and do not have annual fees like most small business credit cards.

On the other hand, a small business credit card is very similar to a personal credit card. You use your personal credit to get qualified and if you pay off the balance in full every statement period you can avoid interest charges. Also, most small business credit cards offer rewards points, so you can get rewarded for your everyday purchases. However, most small business credit cards come with some type of annual fee, they have higher interest rates, and will generally have a credit limit substantially less than the typical small business line of credit.

Term loans are available to assist business owners with improving their company. Every business is going to use a term loan differently. Determining the duration of the term loan is dependent on the size, the company’s cash flow, and ultimately, where the loan dollars are going to be applied. If a business is taking out a loan to purchase additional inventory that will sell quickly, a short-term loan may be best. If the business owner needs to secure a loan to purchase equipment or additional space that will take time to return, a longer-term loan would be best.

Whether it is a short-term or long-term, these loans are intended to make business growth possible. To determine the term best for you, Spencer suggests meeting with one of our loan officers to talk through various options.

Proof of cash flow is a key factor of the term loan application and approval process. Startups and new businesses generally will not have enough historical data when applying for a term loan. Two years of financial records is typically the ideal time to include in a term loan application.

A poor credit score will hinder an approval for a term loan. Low credit score means high-interest rates in most cases. Personal and business credit scores are taken into account when applying for a business loan.

To apply for a term loan, Spencer Savings Bank requires:

• 2 years or more of business operations
• Guarantor of 680 or better
• Credit Application
• Invoice (equipment loans)

For small business loans over $100,000, Spencer will also need the following items:

• Personal Financial Statement
• Two Years Signed Business Returns
• Two Year Signed Personal Returns (all guarantor)
• Debt Schedule
• 3 months business bank statements
• Insurance certificate
• Invoice (equipment loans)