The funding guide
A funding decision should connect the money you need with what your business is trying to achieve. Use this guide to organize that conversation.
Available arrangements and terms depend on the business, provider, and program. Use this guide to identify the questions that matter for your decision.
START WITH A PURPOSE
A clear goal makes it easier to judge an amount, a schedule, and the commitments behind them.
Working capital
Think through the gap between expenses going out and customer payments coming in.
AN ILLUSTRATIVE SITUATION
An operating business has supplier invoices due before its customers pay.
Think it through: Separate a temporary timing gap from expenses that regularly exceed incoming revenue.
Inventory & seasonal needs
Plan stock, supplies, and the cash needed before demand turns into sales.
AN ILLUSTRATIVE SITUATION
A retailer is planning an inventory purchase ahead of a seasonal sales period.
Think it through: Include storage, delivery, unsold inventory, and the possibility that sales arrive later than expected.
Equipment & improvements
Put the full project in view, from the initial purchase to getting it into service.
AN ILLUSTRATIVE SITUATION
An operator is considering equipment replacement or an improvement to an existing location.
Think it through: The purchase price is one part of the need. Installation, training, maintenance, and downtime may also matter.
Expansion & new projects
Define what growth requires before choosing how to fund it.
AN ILLUSTRATIVE SITUATION
A business is evaluating a larger project, additional capacity, or a new location.
Think it through: Map the startup period and ongoing expenses as well as the expected return. A new opportunity can take time to generate cash.
THE NAME IS ONLY A START
“Business funding” describes a broad purpose. The written agreement tells you what a specific option actually is.
The following descriptions explain common funding structures. Availability and eligibility depend on the provider and program. A funding use, such as equipment or inventory, is different from the type of agreement that finances it.
A term-financing offer describes an amount advanced and the repayment obligations over a stated period. Review the net amount received, interest and fees, payment frequency, and any conditions attached.
Ask: Does the complete repayment schedule fit the way the project will generate cash?
A revolving credit arrangement may allow draws within an approved limit, subject to its agreement. Review draw rules, interest, fees, repayment requirements, and whether unused availability can change.
Ask: What would each draw cost, and when must the drawn amount be repaid?
A purchase of future business receivables is a different arrangement from a conventional bank loan. Review what is being purchased, the total purchased amount, collection method, and any adjustment or reconciliation provisions.
Ask: How do collections respond to actual revenue, and what does the agreement require to request an adjustment?
Review a particular arrangement with your financial or legal adviser when appropriate. This general guide does not interpret an agreement or recommend a specific product.
BEFORE YOU COMMIT
Compare the complete arrangement, not just a headline amount or a payment quoted without context.
Funding may be provided by Spruce-Consulting LLC or selected funding providers. An actual offer must identify the funding provider, product type, complete cost, associated fees, and payment or collection terms before you decide. Availability depends on the business, program, and state.
Identify the provider and the business named in the agreement. Funding may come from Spruce or a selected funding provider; confirm who makes the offer and who services the arrangement.
Ask for the product type and its actual terms. A general business funding label does not explain the arrangement or its obligations.
Compare the stated funding amount with the amount you would actually receive after any deductions. Ask which fees are withheld or paid separately.
Request every associated fee and the full payment or collection obligation. Ask whether arrangement or referral compensation is included, deducted, or paid separately, and who pays it.
Understand the amount or calculation, frequency, duration, and collection method. Ask how changes in business revenue affect the obligation, if applicable.
Ask about early settlement, adjustments, collateral, personal guarantees, and default provisions, if applicable. Request the relevant written terms before committing.
A SMALL GLOSSARY
YOUR NEXT CHAPTER
The initial screen starts at $15,000 in monthly business revenue. Gather your business details and latest four bank statements to get started.
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