Key takeaways
- Approval size and affordable size are not the same
- Capacity should survive a slower month
- The capital plan should explain every dollar
Separate eligibility from affordability
A lender's maximum approval reflects underwriting criteria. The business should independently determine a payment that remains manageable under conservative assumptions.
Document the assumptions behind this part of the decision and compare them against the actual financing agreement. Terms, eligibility, and legal treatment vary by provider and product.
Build from the use of funds
Create a detailed budget for the project, including contingency and the operating cash needed until the investment begins producing returns.
Document the assumptions behind this part of the decision and compare them against the actual financing agreement. Terms, eligibility, and legal treatment vary by provider and product.
Review existing obligations
List every business payment, lien, lease, card balance, and owner-supported obligation. New capital should be evaluated within the complete debt picture.
Document the assumptions behind this part of the decision and compare them against the actual financing agreement. Terms, eligibility, and legal treatment vary by provider and product.
Stress-test the request
Model a slower revenue period, delayed launch, cost overrun, or customer loss. If the payment becomes unmanageable, reduce the request or change the structure.
Document the assumptions behind this part of the decision and compare them against the actual financing agreement. Terms, eligibility, and legal treatment vary by provider and product.
Important
This guide is educational and does not provide financial, legal, tax, or accounting advice. SourcePoint is a marketplace, not a direct lender. Review provider-specific terms and seek qualified advice where appropriate.
Frequently asked questions
Is funding based on monthly revenue?
Revenue is one factor. Lenders may also consider cash flow, credit, time in business, industry, deposits, profitability, collateral, and existing obligations.
Should I request the maximum available?
Not automatically. Request the amount needed to execute the plan with an appropriate contingency while preserving repayment capacity.