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• Six months of “liquid reserves” (cash, or assets that can be easily converted to cash).

Although a program introduced by Fannie Mae in 2009 does allow 5-10 mortgages to be on a borrower’s credit, finding a bank that will give you a mortgage can be difficult, despite the guarantee from Fannie Mae.

The program requires six months’ payments held as a liquid reserve at the time of settlement. It requires at least 25% down for single-family homes and 30% down for 2-4 unit properties. If you have six or more mortgages, you must have a credit score of 720 or more. No exceptions.

FHA Mortgages

But there’s a catch. To qualify for the generous rates and terms of an FHA mortgage, you must buy a property of 2-4 units and occupy a unit in the building. Then the property qualifies as “owner occupied.”

FHA mortgages are not directly issued by a government agency. Instead, the loans are made by private lenders, and the FHA insures those lenders against losses. This gives banks more incentive to lend to borrowers who might otherwise be seen as too risky.

Thanks to government backing, FHA mortgage lenders are lenient with regard to minimum credit scores, down payment sizes, and the borrower’s previous real estate experience. Read more

MCAs are all about speed. Everything from application to money in your account is lightning fast. Approval can take less than 24 hours, and funds can be in your account in less than 3 days.

This speed comes because alternative lenders aren’t held to the same intensive regulations, allowing them to expedite the underwriting process (decreasing prices for them and hopefully for you, too).

After all, this provides more insight into how much you’ll be paying back each day. This allows startups, young businesses, and those with credit score issues to access small business financing.

However, a good credit score coupled with strong sales will score you a lower factor rate. This can substantially lower the total cost of your merchant cash advance.

The payback method associated with an MCA makes your payment schedule fluid. If you’re going through a seasonal lull or a few hard weeks, you can rest easy knowing your MCA only requires minimal payments.

That same flexibility isn’t afforded by other loans, like a short term loan or credit card payment. In those situations, your payments are due regardless of your current sales volume.

An MCA’s speed also empowers you to use it for emergency expenses, like equipment repairs, cash flow gaps, and more

Sometimes, merchant cash providers will require a minimum monthly payment or maximum repayment period, so make sure you check the fine print to avoid unwelcome fees during slow months.

With advances ranging from $5k to $400k, MCAs give you a wide array of spending power. The amount providers will lend to you will be dependent on your sales. More revenue means larger borrowing limits. Read more