Compare before you commitCosts, terms and guarantees
Amounts and timing depend on eligibility, approval, a complete application, the product, and provider and bank processing. MicroCapital is a financing broker, not a lender.
01
Identify the asset and the borrowing purpose
A collateral loan is secured by assets specified in the agreement. Start with an asset register showing ownership, condition, existing financing and estimated value. Equipment, inventory, receivables and property have different valuation and monitoring requirements. Do not equate purchase price with the amount a provider will lend. BDC’s collateral guide explains why asset value and security matter to lenders.
02
Understand what is at risk
Ask exactly which assets are covered, whether a personal guarantee is also required, and what happens if payments are missed. Existing lenders may already have security over an asset. Have your legal adviser explain priority, release conditions and any limits on selling or refinancing the property. Collateral does not remove the need for a viable repayment plan.
03
Budget for more than the interest
Request a list of valuation, registration, legal, administration and discharge costs where applicable. Compare the net amount received and the total repayment over the intended borrowing period. An asset-backed option should be compared with equipment financing, a working-capital facility or a smaller borrowing request.
04
List assets and existing claims
Prepare an asset list showing ownership, condition, estimated value and any existing financing. Ask how valuation is established and which assets the security covers. Do not assume that offering collateral removes the need to demonstrate repayment capacity.
05
Start with the cash you actually need
Build a use-of-funds budget before comparing offers. Separate one-time purchases from recurring expenses and identify when each payment is due. Requesting more than the project needs can add unnecessary cost; requesting too little can leave the project unfinished. Keep a reserve for ordinary operating expenses and compare the net amount you would receive after fees.
06
Compare the agreement, not just the headline number
Ask for a written breakdown of the total repayment, fees, payment frequency and term. Identify any security, personal guarantee, renewal condition or restriction on additional borrowing. Ask what happens if sales slow down or you repay early. A lower periodic payment is not necessarily a lower total cost; compare offers using the same requested amount and a realistic cash-flow forecast.
A little clarity
Good questions. Clear answers.
Does collateral guarantee approval?+
No. Providers also assess the business, existing debt and capacity to repay.
How much financing can I request?+
MicroCapital advertises business financing from $5,000 to $1,000,000. The amount available depends on the product, your business and the provider’s assessment. Request an amount supported by your budget rather than assuming the maximum will be offered.
What affects the time to receive funds?+
Funding in 24–48 hours is available for eligible, approved requests, subject to a complete application and provider and bank processing. Missing information, verification or product requirements can change the timing.
Can a new business apply without established revenue?+
Ask which products, if any, are available for your stage of business. A provider may require operating history or revenue; a forecast does not automatically replace those requirements. Explain the start-up budget and owner contribution clearly.
Is a personal guarantee or security required?+
Requirements differ by provider and agreement. Ask which business assets or personal obligations are involved and what happens if payments are missed. Review the actual agreement before accepting; a product label alone does not establish its security requirements.
What should I compare before accepting an offer?+
Compare net funds received, total repayment, fees, payment frequency, term and early repayment conditions. Include existing debt in your cash-flow forecast and ask for unclear terms in writing.
From $5,000 to $1,000,000. Funding in 24–48 hours.
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For eligible businesses, subject to approval and a complete application. Amounts, pricing and timing depend on the product, provider and bank processing.
