FAQ | Brent Funding Partners

BRENT FUNDING PARTNERS

Your Partner for Alternative Funding Solutions.

Frequently asked questions

Understanding your funding options is key to making informed decisions for your business. Here, we've compiled answers to common questions about alternative funding solutions. If you don't see your question answered, please don't hesitate to reach out to our team directly.

What is "alternative funding," and how does Brent Funding Partners fit in?

Alternative funding refers to non-traditional financing options outside of conventional bank loans. At Brent Funding Partners, we act as your strategic intermediary, connecting your business with a diverse network of specialized lenders who offer innovative solutions like Merchant Cash Advances, Equipment Financing, Revenue Based Financing, Invoice Factoring, Debt Restructuring, and Business Lines of Credit. We simplify your access to capital.

How quickly can I get funding?

One of the primary advantages of alternative funding is speed. While timelines vary by solution and your specific business profile, many options, like Merchant Cash Advances, can provide funds in a matter of days. We prioritize an efficient process to get you the capital you need swiftly.

Do I need perfect credit to qualify?

Not necessarily. Unlike traditional banks, many alternative funding solutions consider a broader range of factors beyond just credit scores, such as your business's revenue, cash flow, and assets. This opens up opportunities for businesses that might not qualify for conventional loans.

What kind of businesses do you work with?

We partner with businesses across a spectrum of industries and sizes, from established enterprises seeking growth capital to those navigating specific cash flow challenges. Our solutions are designed to be flexible and adaptable to diverse business needs.

Merchant Cash Advance (MCA)

What is a Merchant Cash Advance, and how does repayment work?

An MCA provides a lump sum upfront in exchange for a percentage of your future daily credit and debit card sales. Repayment is typically automated as a small, fixed percentage of each day's card transactions, meaning payments adjust with your sales volume. This flexible structure ensures repayments align with your business's performance.

Is a MCA a loan?

No, a MCA is technically a sale of future receivables, not a loan. This distinction means it doesn't carry a traditional interest rate, nor does it typically appear as debt on your balance sheet in the same way a loan would.

Specific Funding Solution Questions

Equipment Financing

What types of equipment can be financed?

You can finance a wide array of essential business equipment, including but not limited to heavy machinery, construction equipment, vehicles, restaurant equipment, office technology, manufacturing tools, and specialized industry-specific assets. If it helps your business operate and grow, it's likely eligible.

Do I own the equipment during the financing term?

This depends on the specific structure of your equipment financing agreement. Some agreements are structured as loans where you own the equipment from the start, while others are leases where ownership transfers at the end of the term (or you have the option to purchase). We'll help you understand the best structure for your needs.

Revenue Based Financing (RBF)

How does Revenue Based Financing differ from a traditional loan?

With RBF, repayments are directly tied to your gross monthly or quarterly revenue, rather than a fixed payment schedule. This offers greater flexibility; if your revenue is lower in a given period, your payment will be commensurately lower, providing a vital buffer for businesses with fluctuating sales.

Is collateral required for Revenue Based Financing?

Typically, RBF is unsecured or secured by your future revenues, not specific assets. This makes it an attractive option for businesses that may not have substantial physical collateral to offer.

Debt Restructuring

When should a business consider Debt Restructuring?

Debt restructuring is a strategic option for businesses that are experiencing cash flow challenges due to existing debt obligations, facing high interest rates, or simply looking to optimize their financial structure for greater stability and growth. It's often a proactive step to avoid more severe financial distress.

What are the potential benefits of Debt Restructuring?

Key benefits can include reducing your monthly debt payments, lowering overall interest costs, consolidating multiple debts into a single, more manageable payment, improving your cash flow, and providing the financial breathing room needed to focus on core business operations and long-term viability.

Business Line of Credit

How does a Business Line of Credit work?

A Business Line of Credit functions much like a credit card for your business. You're approved for a maximum credit limit, and you can draw funds up to that limit as needed. As you repay the drawn amount, those funds become available again for future use. You only pay interest on the amount you've actually borrowed.

What are the best uses for a Business Line of Credit?

A Line of Credit is incredibly versatile. It's ideal for managing short-term cash flow gaps, covering unexpected expenses, purchasing inventory, funding marketing campaigns, or providing working capital for daily operations. Its flexibility makes it a powerful tool for ongoing financial management.

Invoice Factoring

How does Invoice Factoring improve my cash flow?

Invoice factoring converts your outstanding invoices into immediate cash. Instead of waiting 30, 60, or 90 days for your customers to pay, you sell your invoices to a factoring company (through us) and receive a significant percentage of their value upfront. This provides instant liquidity, allowing you to cover expenses, take on new projects, and grow your business without delay.

Does my customer know I'm using Invoice Factoring?

In most cases, yes, your customer will be aware, as payments will be directed to the factoring company. However, the process is professional and transparent, and it's a very common practice in many industries.

Navigating the world of business financing often involves encountering specialized terms. To empower you with a deeper understanding, we've broken down some key financial concepts that lenders often consider. Knowledge is power when securing the right funding for your business.

Understanding Your Business's Health:

What is EBITDA, and why is it important for my business's funding potential?

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a crucial metric that helps assess your business's core operational profitability, independent of financing decisions, tax strategies, or non-cash accounting items like depreciation and amortization.

Why it's important: Lenders and investors frequently use EBITDA to get a "cleaner" picture of your company's ability to generate cash from its primary operations. It allows for more straightforward comparisons between businesses in the same industry, providing insight into your true earning power before external financial and accounting influences. A strong EBITDA signals robust operational performance, which can significantly enhance your funding eligibility.

What is the Fixed Charge Coverage Ratio (FCCR), and how does it affect my loan application?

The Fixed Charge Coverage Ratio (FCCR) is a vital solvency metric that measures your business's ability to cover its fixed financial obligations from its cash flow. These fixed charges typically include interest payments, principal debt repayments, and lease expenses.

How it affects your application: Lenders use FCCR to evaluate your capacity to consistently meet your financial commitments. A higher FCCR indicates a stronger ability to cover these fixed costs, signaling lower risk for lenders. It demonstrates that your business generates sufficient cash flow to comfortably manage its regular payments, making you a more attractive borrower. Many lenders look for an FCCR of 1.2x or higher, though this can vary by industry.

Secured vs. Unsecured Assets in Financing:

What is the difference between Secured and Unsecured Assets when it comes to business financing?

The distinction between secured and unsecured assets is fundamental in understanding loan structures and your business's risk profile from a lender's perspective.

Secured Assets (Collateral): These are specific assets pledged to a lender as security for a loan. If your business is unable to repay the loan, the lender has the legal right to seize and sell these assets to recover their funds. Common secured assets include real estate, equipment, inventory, and accounts receivable.
- Implication: Loans backed by secured assets often come with lower interest rates and higher borrowing limits because the collateral reduces the lender's risk.
Unsecured Assets: These are assets that are not pledged as collateral for a loan. Instead, unsecured loans are granted based primarily on your business's creditworthiness, cash flow, and financial track record.
- Implication: While offering greater flexibility by not requiring specific assets, unsecured loans typically involve higher interest rates and smaller borrowing amounts due to the increased risk for the lender.

Why do lenders care about whether assets are secured or unsecured?

Lenders prioritize managing their risk. By understanding which assets are secured, they have a defined path to recover their investment if a borrower defaults. For unsecured financing, they rely more heavily on the business's overall financial health and consistent cash flow as the primary assurance of repayment. Your asset structure helps them determine the appropriate loan type, terms, and interest rate.

Key Financial Concepts