Frequently Asked Questions
What types of businesses do we fund?
RBAC does not have a typical client. We have financed conventional businesses (hair stylists opening their own salons, truck drivers and restaurant owners), high-tech entities (“dot-com’s,” website developers, e-commerce ventures) and niche products or services (custom-made pool tables, ethnic food purveyors and funeral gown manufacturers).
How does a business qualify for a loan?
3 factors are considered before a full analysis is undertaken:
- Is the business owner investing his/her own cash and assets into the business? You are the one who will earn the profit and you should be willing to risk some of your own capital.
- Does the business owner have experience in the business s/he is proposing to start? Gaining direct experience in the proposed business greatly increases your chances for success and reduces the likelihood of learning things the hard way.
- Does the business owner have unresolved personal credit issues?
You must have resolved or be in the process of resolving any and all personal credit problems. We can help you get erroneous derogatory information off your credit report or direct you to a credit counselor that may be able to help you work out a payment plan with creditors.
What are eligible uses of funds?
RBAC most often finances equipment and inventory purchases and working capital, which can include advertising and marketing expenses, start-up bookkeeping, downpayments, payroll services and other miscellaneous business expenses.
With some of our more specialized loan programs, eligible only in Mercer County and focused on redevelopment in Trenton, RBAC can finance real estate acquisition and renovation. Most of RBAC's real estate loans are part of a larger financing package, usually in partnership with a bank and/or the New Jersey Economic Development Authority.
Does RBAC take collateral?
RBAC takes business and personal collateral when it is available. RBAC loans are always secured by a Uniform Commercial Code (UCC) lien on the business assets. This lien entitles RBAC to sell the business assets to recoup the loan proceeds if the business owner does not repay the loan. RBAC will also look for personal collateral and/or guarantors to help mitigate the high risks of the loans. RBAC holds second mortgages on personal residences of about half of our clients and has taken liens on some unusual personal property.
Can a business owner apply for a loan if s/he has poor personal credit?
Once a loan application is received at RBAC, we request a copy of the credit report(s) for all business owner(s) and guarantors. All derogatory situations on a credit report must be adequately explained and all judgments, charge-offs, and collection accounts must be either satisfied or in a satisfactory workout situation.
Is a business plan necessary to apply for a loan?
RBAC requires a business plan for all start-up ventures. You need a roadmap as much as we need to see how you plan to operate the business and earn sufficient profit to repay the RBAC loan. RBAC is not looking for a lengthy or complex document, but we are looking for the basic operating assumptions of your business and how those assumptions are translated into projections of sales, expenses and profits.
Businesses that have been operating at least 12 months need to provide two years of sales projections and expenses.
