Oakridge Business Loans, a small-business funding broker in Bellingham, WA, works in four steps: learn what the funding is for, match it to a funding type, introduce the request to lending partners that underwrite and decide, then help the owner compare any offer on total cost. Partners make credit decisions and set rates and terms.
Broker or lender: the difference
A lender provides the money, decides whether to approve a request and sets the price. Brokers do not do any of that. A broker's work is matching: understanding the need, knowing which kinds of lenders offer which kinds of funding, and getting a request in front of the right ones. Banks, credit unions and online lenders each work differently. Banks and credit unions often want longer operating history and more documentation; online lenders may offer shorter terms with different paperwork. Part of our job is explaining which routes are realistic for a given business.
The decision is always theirs, and saying yes or no to an offer is always yours.
Step 1: the purpose and the numbers
Everything starts with a conversation, by phone or after you send the short request form. We ask what the funding will pay for, roughly what it costs, when it is needed, and where repayment will come from. We also ask how long the business has operated and what debt it already carries. Those answers rule options in or out faster than any application form.
Step 2: matching a funding type
The purpose usually points to a structure: a timing gap to working capital, a project with a long payoff to a term loan, uneven recurring costs to a line of credit, stock to inventory financing, a machine to equipment financing. A merchant cash advance, which is not a loan, comes up only after the alternatives have been weighed. We then identify lending partners that offer that type.
Step 3: underwriting by the partner
Underwriting is the partner's review of the request. A business loan underwriter is the person or system that checks the evidence and recommends or makes the credit decision. The business loan underwriting process usually looks at:
- Cash flow: bank statements and financial statements showing whether revenue can carry the new payment.
- Credit: business credit, and often each owner's personal credit.
- Existing debt: current payments, liens and any advances being collected.
- Time in business and registration: how long the company has operated and whether it is in good standing with the state.
- Collateral: what secures the funding, if anything.
The partner may ask for more documents, approve with conditions, or decline. Offers often arrive as a term sheet or commitment letter before the final agreement.
Step 4: comparing offers
Compare offers on the same basis. For loans, look at the annual percentage rate where one is given, the total of all payments and every fee. For a merchant cash advance, look at the total amount to be collected and how long collection is expected to take; a factor rate is a multiplier, not an interest rate, so it cannot be set beside an APR. For any offer, read the collateral, personal guarantee and prepayment sections before deciding.
| Offer type | Headline figure | What to compare instead |
|---|---|---|
| Term loan or working capital loan | Interest rate or payment | Total of all payments plus fees, over the full term |
| Line of credit | Rate on drawn balance | Rate plus draw, maintenance and renewal fees |
| Equipment lease | Monthly payment | All payments plus the buyout |
| Merchant cash advance | Factor rate | Total amount collected and expected collection period |
Warning signs in a funding offer
- Talk of approval before anyone has looked at the business.
- Being asked to pay something before any offer exists.
- A push to sign within hours.
- Blank fields in a contract, or a refusal to put the total cost in writing.
- A lender or funder unwilling to say who it is.
Questions about any of these? The owner FAQ covers the common ones, the disclosures describe our role, and free local advising is available if you want a second opinion.
By Oakridge Business Loans · Updated