We’ve tried to answer as many of the important ones in the list below:
Frequently asked questions:
Who is First Up Lending?
First Up Lending LLC was launched in 2018 and is based in Boca Raton, Florida. Discover more in About Us.
Why should I choose First Up Lending?
We know how challenging it can be to secure funding for your business. We designed and built our digital lending platform to make the process quicker, easier and more cost effective for you.
Banks and Credit Unions may offer lower rates on their lending products than us but getting a loan or line of product approved is difficult. Moreover the process is manual, paper-based, and often takes months to get funded.
Do you lend to companies in all U.S. States?
Due to State lending regulations we’re currently restricted from lending in these U.S. States:
- North Dakota
- South Dakota
What industries do you serve?
We’re open-minded about the businesses we lend to but we typically avoid these industries:
- Public healthcare
- Perishable goods
- Real estate
How do I qualify for a First Up Lending line of credit?
There’s two parts to getting approved for your line of credit:
Firstly, we need your business to meet these basic conditions:
- Must be incorporated in the U.S.A
- Legal entity must be a Corporation, LLC, or LP
- Minimum of two years in business
- Customers and trade debtors must be other businesses
- Annual revenue greater than $2,500,000
- No bankruptcies within the last three years
Secondly, your business has to meet our minimum lending standards. We take into account a number of factors including:
- Sales and profit trends
- Size and quality of your customer base
- If you make or sell goods, how well you turn your inventory into sales
- The industry in which your firm operates
- How well you’ve met any debt and tax obligations
- The experience of your management team
- The ownership structure of your business
Why do I need to connect my accounting software?
Two reasons. First, it saves you the time from having to collect and send us all your business records. Second, we’re more likely to lend to you if we have up-to-date information about your business’s performance.
Is my business & personal data safe?
Is there a fee to apply?
No, we never charge a fee to apply.
How long does it take to get funded?
Getting you funded quickly is a priority for First Up Lending. We break the application process down into three stages:
- Pre-qualification: The quickest part of the process. We check that you meet our basic suitability requirements
- Pre-approval: This is where we analyse the data you provided to us, together with complementary 3rd party data and make a preliminary lending decision. We provide a Proposal Letter to you that outlines the key terms, including the line size, cost and acceptable collateral. We try to do this within 24 hours
- Final approval & contract signing: Once you accept the proposed terms and we receive your $3,000 fee to cover searches and legal costs we conduct further due diligence, including UCC searches and background checks. At this point we may request a collateral audit to be conducted at your offices. This allows us to credential your business and the business assets you offer as collateral for the loan, in more detail. On receipt of satisfactory results we provide you with a Loan and Services Agreement for you to review and sign online. This final part of the process is the longest, but can typically be completed in less than 10 business days
My application was declined, why?
Two main reasons. First, your business may not meet our basic lending conditions (see above). Secondly, your business and business assets may not meet our minimum underwriting standards.
If I’m declined, can I reapply?
If you met our basic lending conditions (see above), but were still declined, we would suggest reapplying only after three months has elapsed. Your business is more likely to be offered a line of credit if you’re seeing an improvement in sales and profits, and you’re A/R and inventory levels are rising.
How does your digital platform work?
We designed and built this platform with you the small business owner in mind. Key functionality includes:
- Application – manage your loan application from start to finish through the platform
- Key business data – no need to e-mail, mail or fax financial statements and tax returns to us. We simply ask that you allow access to connect with your accounting software so we can check your business records and make a quick and accurate lending decision
- Online loan documents – both the loan proposal and lending agreement can be accessed and signed online. It’s a paperless process!
- Funding requests – once your account is set-up you can make funding requests online 24/7
- Account management – online account access allows you to monitor paid invoices and incoming collections, follow the history of funds drawn and fees and interest charged
What business assets do you require as collateral for a First Up Lending line of credit?
We lend against the value of your eligible accounts receivable and inventory. The information you make available to us allows First Up Lending to judge what value of A/R and inventory we can use as collateral.
Typically, you can draw up to 85% of eligible A/R and up to 50% of eligible inventory. The exact percentages depend on a number of factors including the quality and payment efficiency of your invoiced customers, the type of inventory you hold and how well you turn it into sales. The specific collateral terms will be reflected in your contract.
What is the cost?
One of the benefits of First Up Lending is our transparent pricing policy. We have three charges:
- One-time $3,000 fee to cover due diligence expenses and legal fees. Once you become a customer we will provide an itemized receipt and any balance left over will be credited back to your line balance.
- Origination fee of between 1-5% of the value of your line of credit. This amount doesn’t have to be paid up-front but is applied to your line of credit balance. The fee is re-payable if you decide to renew your loan after the one year term date.
- Interest is charged only on the drawn balance of your credit line. All of our loans are priced off the 1 month USD LIBOR floating rate benchmark and the interest spread is typically between 8-20%. We review this interest spread at the end of the one year term.
What is the term for a First Up lending line of credit?
Our lines of credit have a twelve month term, with the option to renew on each anniversary.
Do you check my personal credit score?
No. As an asset-based lender First Up Lending is more interested in the quality of your business and the business assets you can offer as collateral.
Do I need to give a personal guarantee?
Yes, we do ask for the equity owners of your business to sign a personal guarantee.
What happens if my business defaults on a First Up lending line of credit?
In the event of default, we first look to the cash in your collections account and any pending customer invoice payments to provide liquidity to reduce the credit line amount. Secondly, the inventory you own is sold. Thirdly, the remaining asset of the business are sold to cover the credit line balance. Finally, and only if these sources of liquidity are insufficient, we’re obliged to pursue the loan guarantors to cover the remaining balance.
Managing a loan default and liquidating collateral is expensive and time consuming for both you and First Up Lending. In the event that business conditions start to deteriorate, we’d welcome a conversation with you prior to your business failing to settle amounts to us. Our staff have many years of lending experience and can assist you and your business in working out of a difficult situation.
How does an asset-based line of credit work?
A line of credit works just like a credit card, except your maximum credit line is determined by the value of eligible collateral – in your case, accounts receivable and inventory. We verify the quantity and quality of this eligible collateral every time you ask for loan advance, and periodically at our discretion.
Unlike a regular loan, where the source of repayment is made out of your regular operating cash flow, asset-based lending looks to the performance of your working capital accounts to generate cash. In particular, the conversion of your business inventory to sales, and then accounts receivable turning to cash is of paramount importance.
Do you contact my customers?
At the application stage we reserve the right to make contact with a sample of your customers to confirm invoices outstanding. Once we’ve approved your line of credit we establish a dedicated collections account into which your customers must send amounts owing to you. We save you the task of advising customers and instead send a letter informing them of the change in your payment instructions.
How do I pay First Up Lending fees and interest?
We don’t want to create more work for you so all fees and interest are simply added to the credit line balance at the end of each month. This will be paid down, along with the line balance in that order, as customers make payments to the collections account we establish in your name. Any excess amount is automatically transferred to your business account.
Why do you establish a collections account?
Since invoice collection is the primary method by which your business pays down the outstanding line balance, as well as settling fees and interest to us, we require visibility and control over that process. This is best achieved by establishing a dedicated account into which your customers send amounts owing to you. The collections account can accept checks, ACH and wires.
As customer payments are received into the collections account, we apply funds to the interest and fees first, then the outstanding line balance. Any excess amount is automatically transferred to your business account.
The collections account is set-up and run in your name at no extra cost.