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Once you’ve applied for a small business loan through CAN Capital and your application has been vetted through their underwriting process, it’s now time to wait for an official loan offer. You’ll typically receive an offer letter over email within a couple of days after CAN Capital receives your initial loan application. Congratulations—you’ve almost got money!
But wait a minute. Maybe you should step back and make sure you can decipher your loan offer so you understand how your loan actually works. And that’s particularly important if loan lingo is new to you. To make things easier to understand, CAN Capital breaks down all the parts of your loan offer in your letter, since “it’s important that you’re clear on what you’re agreeing to. Our reputation is on the line too,” says Jason Rockman, VP of brand and partner marketing.
To help simplify things even more before you sign on the dotted line, we’ve written up a primer on what you can expect to see in your loan offer from CAN Capital. Take a look.
The first thing you’ll see—after a “congratulations!”—is the loan amount CAN Capital is extending to you. To arrive at this figure, CAN Capital takes into consideration the loan amount you asked for and the largest amount it’s comfortable lending to you. The amount on your offer might be less than, more than, or equal to the amount you wanted to borrow. The average loan amount falls between$40,000 – $60,000, but CAN Capital offer loans starting at $2,500 and reaching as high as $350,000.
Each loan offer will include the terms of the loan.
For example, if CAN Capital expects to be repaid in 12 months, that’ll be spelled out for you. Although terms range from 4 to 24 months, the average CAN Capital loan term range is from 8 to 14 months.
If you’re seeking a short-term loan for inventory needs, you might be offered a 4 month term. On the flipside, if you’re in need of a longer-term loan, CAN Capital might offer you up to 24 months to pay back your loan.
This is where you’ll see how much each payment will be and whether you’ll be paying back your loan on a monthly, weekly, or daily basis.
More often than not, CAN Capital customers will have daily payments. Daily payments let CAN Capital extend loans to small businesses that banks often won’t touch because they’re a higher level of risk. If you are offered a loan with the popular daily payment schedule, be sure to look closely at this amount, since that’s what you’ll be paying every single business day until you’ve reached the end of your loan term.
CAN Capital outlines your Annual Percentage Rate (APR), also known as the true cost associated with taking out your loan. APR includes the annual interest rate on your loan—as well as any applicable borrowing fees that might be hidden if you just looked at your interest rate.
All in all, this figure is the amount you pay for borrowing money at CAN Capital. The shorter the loan term, the higher the rate, explains Rockman. CAN Capital makes sure that it’s “crystal clear” on your rate, since it’s “not in our best interest for there to be any surprises,” Rockman says.
Sometimes your offer will outline loan options for you, although usually this isn’t necessary—as you’ll already have discussed your loan needs with a financial specialist during the underwriting process. A offer letter, however, might include two choices for someone interested in both a traditional loan and TrakLoan. The options can give this borrower a way to see which terms, APRs, and repayment programs might be more suitable for their particular business.
After explaining exactly what your loan entails, your offer will then give you an allotted amount of time to accept your loan package—typically 30 days. This gives you time to review everything and even call your financial specialist at CAN Capital to ask any further questions.
Although the 30 day period is a great way to give potential borrowers extra time to review the offer and make sure they want to take out the loan, most applicants are ready to go right away, explains Rockman. “The majority of people who come to us for a loan aren’t shopping. They’re buying. They’re looking for quick funding and working capital.”
Once you’ve determined that you want to go forward with your loan through CAN Capital, it’s time to sign the loan documents. After you’ve signed your paperwork, your loan will be funded—and you’re on your way to grabbing that much needed capital for your small business.
CAN Capital will release the money as soon as your bank allows—sometimes banks place holds on funds for 2 to 3 days. The whole process, from the time of application until funding, can be as fast as 2 days.