Getting business funding through a broker takes four steps: describe the need, match it to a funding type and partners, partner underwriting and decision, and your own review of any offer. Timberford Lenders, a small-business funding broker in Tuscaloosa, AL, handles the first two steps and explains the rest; lending partners make credit decisions and set rates and terms.
Broker versus lender: who does what
| Task | Timberford Lenders (broker) | Lending partner |
|---|---|---|
| Talk through the need | Yes | Sometimes, during review |
| Suggest funding structures | Yes | Offers its own products |
| Collect documents | Helps you prepare | Requests what it needs |
| Review credit and underwrite | No | Yes |
| Approve or decline | No | Yes |
| Set rate, fees and terms | No | Yes |
| Sign the agreement with you | No | Yes |
A broker's value lies in preparation: putting a clear request in front of partners that fund that kind of need, and helping you read what comes back.
What does a business loan broker do in Tuscaloosa, AL?
A business loan broker works between the owner and the funders. It learns what the business needs and how it earns, explains the structures that could fit, and introduces the request to partners whose products match. It does not lend. A good broker should also tell you when a request is not ready, or when a different structure would cost less.
Step 1: Describe the business and the cost
Call (205) 341-2376 or use the short online form, which takes your name, email, phone and business name; we ask about the purpose when we call. We want to know what the money is for, roughly what it costs, how the business earns its revenue and how long it has operated. Paperwork is not needed yet.
Step 2: Match the need to a structure and partners
Next we work out which of the six structures fits: working capital, a term loan, a line of credit, inventory financing, equipment financing or a merchant cash advance, which is not a loan. Then we identify partners that offer it for businesses like yours and send the request on.
Step 3: The partner underwrites and rules
The partner reviews the request against its own criteria and usually asks for documents at this point:
- Recent business bank statements.
- Business tax returns, and personal returns for owners in many cases.
- A profit and loss statement and a balance sheet, or other financial statements.
- A quote, invoice or signed contract showing what the funds will buy.
- ID and ownership information for every major owner.
Expect the partner to look at both business and personal credit. Whether an offer follows, and on what terms, is the partner's call alone. Timberford Lenders cannot influence that decision or promise any outcome.
Step 4: Weigh any offer before you sign
If an offer arrives, read the whole agreement, not just a summary. Get in writing the sum that will reach your account, the total you will pay or remit, each fee, the payment calendar, any balloon, the collateral and any personal guarantee. You can decline, ask questions or take time to compare. Frequent questions covers many of the points owners raise at this stage.
APR, factor rates and total cost
- APR expresses the yearly cost of a loan, including certain fees, as a percentage, which helps compare loans of different lengths.
- Note rate is the interest rate on the loan itself and may leave fees out.
- Factor is a multiplier used by merchant cash advances and some short-term products; it states the total to be remitted, not an annual rate.
- Total cost in dollars is what you will pay or remit in all, minus what you receive.
The most dependable common yardstick is total dollar cost alongside the payment schedule: how much leaves the account in all, and how much each week or month.
Red flags in any funding offer
- A promise of approval before anyone has looked at the business.
- Pressure to sign immediately, or reluctance to send the agreement in advance.
- A demand for an upfront payment before any offer exists.
- Blank spaces in the contract, or terms that differ from what was described.
- Requests to send Social Security or bank account numbers by ordinary email or text.
Preparing in Alabama
A partner reviewing an Alabama business will usually check that the entity is active with the Secretary of State and that local licenses are current. How to get a business loan in Alabama lists those records and where to find them, and the broker disclosures describe our role.
By Timberford Lenders · Updated