Thursday, July 14, 2016

Translating an Offer From Bond Street

Now that you’ve applied for a loan through Bond Street and your application has been through the underwriting process, it’s time to wait for your loan agreement to arrive. Luckily, you won’t wait for long—you’ll typically get your financing offer within two days of Bond Street receiving your application and the financial documentation required for the underwriting phase.

But, before you see your offer, you’ll get a phone call from a Bond Street representative congratulating you on your loan and explaining that you’ll have five business days to decide on whether you’d like to receive your approved financing, says Jeremy Ruch, director of the business advisory team.

Ruch explains that Bond Street moves quickly on funding loans so that the underwriting analysis reflects the current financial state of your business. Right after you get that phone call, Bond Street will send you an email with a link to a dashboard. This is where you will learn the details and provisions of your loan package.

Keeping in mind that every small business is different, here is a breakdown of what you can expect to see once you’ve logged into the dashboard.

What’s in Your Loan Offer?

1. Money Talks

Bond Street will clearly state how much financing it will extend to your business. This might be the amount you initially asked to borrow in your application. It also might be a different figure, depending on the amount Bond Street is comfortable lending to your company. Your specific amount will typically range from $50,000 to $500,000.

2. It’s a Matter of Interest

This is where you will find your interest rate for the life of your term loan. You will also see your Annual Percentage Rate (APR), which includes the interest rate as well as other associated borrowing costs. The APR is often the more important percentage because it gives you the actual cost that you’ll pay over time for taking out your loan. At Bond Street, your interest rate will generally range from 6% to 23% and your APR will typically range from 8% to 25%. Your rates will vary depending on the length of your loan, the collateral used to secure the loan, and your credit history. “We try to be really clear on the interest rate, APR, and the difference between the two. People want to know the all-inclusive cost of the loan and we want to be as transparent as possible,” says Ruch.

3. Spell Out the Terms

Bond Street will spell out the exact length of time you have to repay your loan. With average Bond Street terms ranging from 1 – 3 years, you can expect your term to fall within this timeframe.

4. Pay Up

At this point, your specific payment schedule is laid out for you so that you know exactly when your loan payments are due. With Bond Street loans, you can usually expect to make payments twice a month—on the first and 16th of each calendar month. Once you know when your payments are due and the length of your term, you can forecast how much cash you’ll need to make payments over the life of your loan.

5. Provisions Please

Bond Street prides itself on transparency and expects the same from you. As a provision of your funding, you’ll be required to let Bond Street know about any additional debt you plan to take on. You’ll also need to provide the lender with regular updates about your financial performance. These provisions are outlined in your dashboard information, along with an explanation of late fees and any consequences resulting from loan delinquencies.

6. Banking On It

If you haven’t yet linked your banking information to Bond Street, you can do this through the dashboard. This way Bond Street can do a last minute check of your banking status prior to funding. The lender will also have any missing bank account information necessary to send you your loan proceeds and receive loan payments.

Time to Sign

Once you’ve read through your loan agreement and you’re ready to receive your financing, you’ll click on a provided link on the dashboard to e-sign the loan documents.

You’re in the Money

After you sign the e-documents, you should see the funding in your bank account within one business day. You can expect to receive an email from Bond Street as soon as your financing is available, says Ruch.

Send Out the Welcome Wagon

About a week after your loan arrives, a representative from Bond Street will call you to follow-up and welcome you to the Bond Street community. This is a good opportunity to ask any questions about your small business loan and rest easy that Bond Street is a partner in your company’s success. While lending is often considered purely transactional, Bond Street aims to build lasting human relationships with the businesses it funds, explains Ruch.

“This is incredibly important for us.”  

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