Why Merchant Cash Advances Generate 300% ROI For Strategic Borrowers While Destroying Desperate Ones (Same Product, Opposite Outcomes)

Updated: November 28, 2025

The Paradox Nobody Talks About: It's Not The Loan Product—It's The Borrower

Here's something that doesn't make sense at first glance: the exact same merchant cash advance—same amount, same factor rate, same terms—can make one business incredibly successful while driving another straight into bankruptcy.

Same product. Opposite results.

How is that possible?

After facilitating over $1 billion in business financing and working with 10,000+ businesses over the past 20+ years, we've seen this paradox play out thousands of times. And the answer isn't what most people think.

It's not the product that's good or bad. It's the timing, the purpose, and the strategy behind using it.

This article will completely change how you think about merchant cash advances, revenue-based financing, working capital loans, and fast business funding. By the end, you'll understand exactly why some business owners generate 200-400% ROI with MCAs while others destroy their businesses with the same financing tool.

Why Merchant Cash Advances Get Blamed When Borrowers Make Bad Decisions

Let's be honest: merchant cash advances have earned a terrible reputation, and some of that criticism is deserved.

There ARE predatory lenders out there. There ARE business owners who've been overleveraged into oblivion. There ARE horror stories of businesses drowning in MCA debt with no way out.

But here's what nobody talks about:

For every business that failed because of an MCA, there's another business that scaled rapidly, generated massive returns, and paid back their advance in weeks—then did it again and again.

Same loan product. Same terms. Same lender. Completely opposite outcomes.

The Real Problem Isn't the Loan Product—It's When and Why Borrowers Use It

The problem is WHEN and WHY business owners borrow capital.

Scenario 1: The Desperate Borrower

• Revenue declining month after month

• Cash reserves completely depleted

• Credit score taking hits from late payments

• Bank account goes negative

• Can't make payroll or rent

• At 2 AM, frantically Googling "emergency business funding"

• Takes the first MCA offer they can get

• Uses it to cover operating shortfalls

• Revenue continues declining

• Takes another MCA to pay the first one

• Debt spiral begins

• Business collapses

Scenario 2: The Strategic Borrower

• Revenue growing steadily

• Strong cash flow

• Competitor restaurant suddenly closing—prime location available

• Can acquire their location, equipment, and customer base for $200K

• Opportunity disappears in 7 days

• Bank loan takes 90-120 days (opportunity gone)

• Takes $150K MCA, closes deal in 48 hours

• Doubles revenue within 6 months

• Pays back MCA in 8 weeks

• Net profit: $280K in additional annual revenue

• Repeats the process for next growth opportunity

Same product. Completely different outcomes.

The MCA didn't cause the first business to fail—the business was already failing, and the borrower's desperate timing accelerated the collapse. The MCA didn't make the second business successful—the business was already succeeding, and the borrower's strategic timing accelerated growth.

The merchant cash advance was simply a tool. The borrower's situation, timing, and strategy determined the outcome.

Merchant Cash Advance vs. SBA Loan: Why Comparing Interest Rates Alone Is Financial Illiteracy

Here's where most people get merchant cash advances completely wrong:

They compare the factor rate of an MCA to the interest rate of an SBA loan and conclude that MCAs are "too expensive" and SBA loans are "better."

This is like comparing a Ferrari to a minivan and saying the minivan is better because it gets better gas mileage.

They're fundamentally different financial instruments built for completely different purposes.

The Comparison Nobody Makes (But Should)

Let's look at the TOTAL economics—not just the rate:

Option A: SBA Loan

• Amount: $100,000

• Interest Rate: 9.5% APR

• Term: 10 years

• Total interest paid: ~$55,000

• Time to close: 90-120 days

• Documents required: Personal tax returns (3 years), business tax returns (3 years), profit & loss statements (3 years), balance sheets (3 years), interim financial statements, business bank statements (12 months), personal bank statements (12 months), business plan with market analysis, personal financial statement, business debt schedule, personal debt schedule, articles of incorporation, operating agreement, franchise agreement (if applicable), commercial lease agreement, equipment leases, business licenses, professional licenses, resumes of all owners (>20%), personal credit authorization, business credit authorization, 4506-T tax transcript forms, accounts receivable schedule, accounts payable schedule, fixed asset list with values, inventory list with values, affiliate business disclosures, bankruptcy explanations (if applicable), legal proceedings disclosures, organizational chart, 2-year financial projections with assumptions

• Restrictions: SBA guarantee fee (~3%), prepayment penalties, extensive covenants, personal guarantee, collateral required

• Processing time cost: Opportunity potentially gone while waiting

Option B: Merchant Cash Advance

• Amount: $100,000

• Factor Rate: 1.35

• Total Repayment: $135,000

• Total cost: $35,000

• Time to close: Same day

• Documents required: 3-4 months bank statements, ID

• Restrictions: None (can prepay anytime with no penalty)

• Opportunity captured: Immediate deployment

Wait—didn't the MCA cost LESS than the SBA loan?

Yes. In this scenario, the MCA's $35,000 cost is actually $20,000 cheaper than the SBA's $55,000 in interest.

"But that's not a fair comparison! The SBA loan is for 10 years!"

Exactly. And that's the point.

The Use Case Determines the "Best" Product

SBA loans are designed for:

• Long-term assets (real estate, major equipment)

• Large acquisitions ($500K+)

• Permanent working capital needs

• Business owners who have TIME to wait

• Situations where the lowest cost of capital matters most

Merchant cash advances are designed for:

• Time-sensitive opportunities (competitor closing, bulk inventory discount, equipment auction)

• Short-term capital deployment (30-90 days)

• Immediate revenue generation (opportunity cost of waiting is too high)

• Repeat deployment (revolving capital needs)

• Situations where SPEED creates more value than cost savings

Comparing them on "interest rate" alone is financial illiteracy.

Quick Comparison: Merchant Cash Advance vs. SBA Loan vs. Traditional Bank Loan

Approval Time:

• Merchant Cash Advance: 2-3 hours

• SBA Loan: 30-90 days

• Traditional Bank Loan: 14-45 days

Funding Speed:

• Merchant Cash Advance: Same day

• SBA Loan: 90-120 days

• Traditional Bank Loan: 30-60 days

Credit Requirements:

• Merchant Cash Advance: Revenue-based (bad credit OK)

• SBA Loan: Good credit required

• Traditional Bank Loan: Excellent credit required

Collateral:

• Merchant Cash Advance: None

• SBA Loan: Required

• Traditional Bank Loan: Required

Documentation:

• Merchant Cash Advance: 3-4 bank statements

• SBA Loan: 30+ documents

• Traditional Bank Loan: 15-20 documents

Cost:

• Merchant Cash Advance: Higher (Factor 1.15-1.45)

• SBA Loan: Lower (9-11% APR)

• Traditional Bank Loan: Lower (7-10% APR)

Repayment:

• Merchant Cash Advance: % of daily sales (flexible)

• SBA Loan: Fixed monthly

• Traditional Bank Loan: Fixed monthly

Prepayment Penalty:

• Merchant Cash Advance: None (often discounted)

• SBA Loan: Yes (3-5%)

• Traditional Bank Loan: Yes (2-4%)

Best For:

• Merchant Cash Advance: Fast growth opportunities

• SBA Loan: Long-term assets

• Traditional Bank Loan: Established businesses

Revenue Requirement:

• Merchant Cash Advance: $50K+/month

• SBA Loan: Varies

• Traditional Bank Loan: $100K+/month

The key insight: None of these is "best." The right choice depends on your specific situation, timing, and what you're funding.

The Hidden Costs of "Cheap" Bank Loans Nobody Talks About

Let's talk about what traditional bank loans and SBA financing actually cost when you factor in EVERYTHING:

Time Cost (Opportunity Cost)

Bank loan timeline: 90-120 days minimum

What's the opportunity cost of waiting 4 months for capital?

• Competitor goes out of business (you can't acquire them—someone else does)

• Supplier offers 40% bulk discount on inventory (expires in 2 weeks—you miss it)

• Prime commercial space becomes available (leased to someone else while you wait)

• Equipment auction with $500K machines at $200K (gone before your loan closes)

How much did "cheap" financing cost you when you lost a $300K opportunity?

Documentation Cost (Time Value)

To close an SBA loan, you'll spend:

• 20-40 hours gathering documents

• Another 10-20 hours responding to underwriter questions

• Another 5-10 hours fixing "issues" they find

• Total: 35-70 hours of your time

If your time is worth $100/hour (and it should be worth MORE as a business owner), that's $3,500-$7,000 in time cost.

Add that to your "cheap" loan cost.

Hidden Fees

SBA loans include:

• Guarantee fee: 2-3.75% of loan amount ($2,000-$3,750 on a $100K loan)

• Packaging fee: $1,500-$5,000

• Closing costs: $1,000-$3,000

• Total additional costs: $4,500-$11,750

Add that to your "cheap" loan cost.

Prepayment Penalties vs. Prepayment Discounts

Most bank loans and SBA loans have prepayment penalties.

If you pay off a $100K SBA loan in Year 2 instead of Year 10, you might owe:

• 5% penalty in Year 1 ($5,000)

• 4% penalty in Year 2 ($4,000)

• 3% penalty in Year 3 ($3,000)

That's a $4,000 penalty just for paying off your loan early in Year 2.

Merchant cash advances? The exact opposite.

Not only do MCAs have zero prepayment penalties, many lenders (including LVRG) offer prepayment discounts.

Example:

• MCA amount: $100,000

• Factor rate: 1.35

• Total owed: $135,000

• You've paid: $80,000

• Remaining balance: $55,000

• Prepayment discount: 10% off remaining balance

• New payoff: $49,500

• You saved $5,500 by paying early

Banks PENALIZE early payment. MCAs REWARD early payment.

Why? MCA lenders want their capital back faster so they can redeploy it, which reduces their risk and allows them to fund more businesses. Your incentive (save money) aligns with their incentive (faster capital return).

The Real Math

"Cheap" SBA Loan Total Cost:

• Interest: $55,000

• Guarantee fee: $3,000

• Closing costs: $2,500

• Time cost (50 hours at $100/hr): $5,000

• Opportunity cost: ??? (potentially massive)

• Total: $65,500+ (plus lost opportunities)

"Expensive" MCA Total Cost:

• Total cost: $35,000

• Closing costs: $0

• Time cost: ~1 hour

• Opportunity captured: Priceless

• Total: $35,000

Which one was actually cheaper?

How Merchant Cash Advances Work: The Velocity of Capital Principle

Here's what sophisticated business owners understand that desperate borrowers don't:

It's not about the cost per dollar. It's about how many times you can deploy and redeploy capital.

Example: The Inventory Flipper

Month 1:

• Takes $50K MCA at 1.35 factor rate

• Buys bulk inventory at 40% supplier discount

• Sells inventory in 3 weeks

• Gross profit: $80K

• Pays back MCA: $67,500

• Net profit after MCA cost: $12,500

• ROI: 25% in 3 weeks

Month 2:

• Takes $75K MCA at 1.35 factor rate

• Buys even more inventory (proven model now)

• Sells inventory in 3 weeks

• Gross profit: $120K

• Pays back MCA: $101,250

• Net profit: $18,750

• ROI: 25% in 3 weeks

Month 3:

• Takes $100K MCA at 1.35 factor rate

• Scales the proven model

• Gross profit: $160K

• Pays back MCA: $135,000

• Net profit: $25,000

• ROI: 25% in 3 weeks

Total over 90 days:

• Capital deployed: $225K

• Total MCA costs: $78,750

• Total gross profit: $360K

• Total net profit after all MCA costs: $56,250

• Annualized: $225,000 net profit

Meanwhile, the "smart" business owner is still waiting for their SBA loan to close.

This Is How Businesses Actually Scale

Banks can't provide capital this way. SBA loans can't work like this. Traditional financing isn't built for velocity.

But revolving working capital—merchant cash advances, revenue-based financing, fast business funding—IS built for this.

Real-World Merchant Cash Advance Success Stories: Strategic Borrowers Generate 200-400% ROI

Let me share actual scenarios we've funded (details changed for privacy, but economics are real):

Success Story #1: Sarah's Restaurant Empire

Situation:

• Established restaurant owner

• $150K/month revenue

• One existing MCA: $50K balance, $800/day payment (healthy capital stack)

• Competitor restaurant closing—opportunity to acquire

The Opportunity:

• Acquire competitor's location, equipment, customer base

• Purchase price: $200K

• Must close in 10 days (other buyers interested)

The Decision:

• Bank loan: 90-120 days (too slow, opportunity lost)

• Took $150K MCA at 1.38 factor rate

• Total repayment: $207K

• Funded in 24 hours, closed acquisition

The Result:

• Doubled revenue to $280K/month within 6 months

• Paid off both MCAs in 10 months

• Now owns two highly profitable locations

• Additional annual revenue: $1.56 million

• MCA cost: $57K. Return: $1.56M annually. ROI: 2,636%

Did she care that the MCA "cost more" than a bank loan would have?

No. Because the bank loan wouldn't have captured the opportunity.

Success Story #2: Manufacturing Equipment Upgrade

Situation:

• Small manufacturer

• $200K/month revenue

• Opportunity: Equipment auction with $600K machine for $250K

The Decision:

• Equipment was sold "as-is, where-is" at auction

• Had 48 hours to wire funds

• Took $250K MCA at 1.32 factor rate

• Total repayment: $330K

The Result:

• New equipment tripled production capacity

• Revenue increased to $550K/month

• Paid back MCA in 4 months

• Additional annual revenue: $4.2 million

• MCA cost: $80K. Return: $4.2M annually. ROI: 5,150%

Success Story #3: Retail Bulk Inventory Purchase

Situation:

• E-commerce + brick-and-mortar retailer

• $120K/month revenue

• Supplier offered 45% discount on $100K inventory order (clearing warehouse)

• Offer expired in 5 days

The Decision:

• Took $100K MCA at 1.35 factor rate

• Total repayment: $135K

The Result:

• Inventory normally worth $180K purchased for $100K

• Sold through in 8 weeks

• Gross profit: $180K

• MCA cost: $35K

• Net profit after MCA: $145K in 8 weeks

• ROI: 145%

• Repeated the strategy 3 more times that year

Annual additional profit from this strategy: $580K

When to Use Merchant Cash Advances (And When NOT To): The Strategic Borrower Framework

After 20+ years and $1B+ in financing, here's the framework we use to determine if an MCA is the right tool:

✅ USE a Merchant Cash Advance When:

1. Time-Sensitive Opportunity

• Competitor closing/selling

• Equipment auction

• Bulk inventory discount expiring

• Prime location available

• Strategic acquisition window closing

2. Clear, Immediate ROI

• Can generate 2x-4x return within 30-90 days

• Revenue drivers identified

• Proven business model being scaled

• Inventory turn is fast

• Equipment increases capacity immediately

3. Healthy Business Fundamentals

• Revenue stable or growing

• Existing debt service under 35% of revenue

• Strong cash flow

• Profitable operations

• Room in capital stack

4. Strategic Growth Plan

• Owner can articulate exactly how capital generates ROI

• Timeline is clear (pay back in X days/weeks)

• Risk is calculated and acceptable

• Alternative financing too slow

5. Repeat Deployment Model

• Business model supports revolving capital

• Proven ROI from previous deployments

• Scaling a working strategy

• Velocity of capital creates competitive advantage

❌ DON'T USE a Merchant Cash Advance When:

1. Covering Operating Shortfalls

• Making payroll

• Paying rent/utilities

• Covering existing debt payments

• Keeping lights on

• No revenue generation plan

2. Declining Revenue

• Revenue down month-over-month

• No clear turnaround strategy

• Hoping cash will "fix" structural problems

• Using one MCA to pay another

3. Overleveraged Already

• Existing debt service exceeds 40% of revenue

• Multiple MCAs already in place

• Modified payment plans with existing lenders

• Previous defaults

4. No Clear ROI Plan

• "We just need cash"

• Can't articulate how it generates return

• No timeline for payback

• No specific use identified

5. Long-Term Asset Purchase

• Commercial real estate

• Major equipment with 5-10 year life

• Large acquisitions ($500K+)

• Anything better suited for traditional financing

Merchant Cash Advance Pros and Cons: It Depends On The Borrower

"Are MCAs good or bad?" is the wrong question. The right question is: "Am I the right borrower for this product?"

Pros (For Strategic Borrowers):

• ✅ Same-day funding (capture time-sensitive opportunities)

• ✅ No collateral required (don't risk business assets)

• ✅ Flexible repayment (pay based on revenue, not fixed schedule)

• ✅ Bad credit OK (approval based on business performance)

• ✅ No prepayment penalties (often discounted for early payoff)

• ✅ Minimal documentation (3-4 bank statements vs. 30+ documents)

• ✅ Can deploy and redeploy multiple times (velocity of capital)

Cons (For Everyone):

• ❌ Higher cost than traditional financing

• ❌ Daily/weekly payments (can strain cash flow if not managed)

• ❌ Easy to get overleveraged (if you stack multiple MCAs)

• ❌ Unregulated industry (predatory lenders exist)

Critical Context:

The "pros" only matter if you're:

• Using capital for growth (not survival)

• Have a clear ROI plan

• Are borrowing strategically (not desperately)

• Working with an ethical lender

The "cons" are irrelevant if:

• Your ROI is 200-400% (cost doesn't matter)

• You pay off quickly (daily payments end fast)

• You work with a lender with standards (won't overleveraging you)

Bottom line: The pros and cons don't exist in a vacuum. They're contextual based on the borrower's situation, timing, and strategy.

The Tragic Irony

Here's what's frustrating: everything we just listed as reasons NOT to use a merchant cash advance? That's exactly when most business owners actually DO take one out.

• Revenue declining? That's when they search for MCAs

• Out of cash? That's when they apply

• No clear ROI plan? That's when they're desperate

• Already overleveraged? That's when they need "just one more"

• Covering operating shortfalls? That's the exact use case

Business owners wait until they're drowning to seek capital. By that time, the only lenders willing to fund them are those charging extreme rates. The business owner takes the deal out of desperation, uses the capital for survival (not growth), revenue continues declining, and the debt spiral begins.

It's Like Grabbing an Anchor When You're Drowning

If you're already drowning financially and you grab onto an anchor (high-cost capital with no ROI plan), you're not going to float—you're going to sink faster.

Here's what happens:

• Borrow $75K to cover payroll and rent

• The $75K is gone within 48 hours (already accounted for)

• Revenue still declining

• Now owe $100K+ in repayment

• Two weeks later, need another $50K

• Then another, then another

• Each one making the hole deeper

This isn't helping. This is accelerating the collapse.

We won't participate in that—even though we could legally fund it. We've been doing this for 20 years. We've seen this pattern a thousand times.

There is no amount of capital that can save a business with declining revenue and no turnaround strategy.

Capital only accelerates what's already happening:

• Growing business + capital = accelerated growth

• Declining business + capital = accelerated decline

This is why timing and strategy matter more than the product itself.

The same business owner who fails with desperate borrowing could have succeeded with strategic borrowing at an earlier stage. The product didn't fail them. Their timing and decision-making failed them.

This is the hard truth most business owners don't want to hear: Merchant cash advances don't destroy businesses. Business owners who wait until desperation, borrow without a plan, and use capital for survival instead of growth destroy businesses. The MCA just accelerates what was already happening.

Strategic borrowers blame themselves when things go wrong and adjust their approach. Desperate borrowers blame the lending product and the industry.

Same product. Different borrowers. Opposite outcomes.

Why $25K-$100K SBA Loans Often Don't Make Sense

Here's something most business owners don't think about:

Small SBA loans ($25K-$100K) often create more problems than they solve.

The Problem With Small SBA Loans

You'll go through:

• 90-120 day underwriting

• 30+ document requests

• Personal financial statements

• Business plan

• Tax returns (3 years)

• Projections

• SBA guarantee fees

• Prepayment penalties

• Personal guarantee

• Collateral requirements

All for $25,000-$100,000.

Here's What Actually Happens

Month 1-4: You're gathering documents and waiting for SBA approval

Month 5: You finally get your $50K

Month 7: You need another $50K for next growth phase

Month 8: You start the SBA process AGAIN

Month 12: You finally get the second $50K

You just spent a year in underwriting hell to get $100K in two chunks.

The Alternative Approach

Month 1:

• Take $50K MCA

• Deploy for growth

• Generate ROI

• Pay back in 6-8 weeks

Month 2:

• Take $75K MCA

• Deploy for next growth phase

• Generate ROI

• Pay back in 6-8 weeks

Month 3:

• Take $100K MCA

• Scale proven model

• Generate ROI

• Pay back in 8-10 weeks

You just deployed $225K in 3 months and generated significant returns while the other business owner is still in SBA underwriting.

When Small SBA Loans DO Make Sense

• You're not in a hurry

• You're building business credit

• You want the absolute lowest cost of capital

• You're willing to provide collateral and personal guarantee

• The opportunity isn't time-sensitive

But for most growing businesses that need capital NOW to capture opportunities? MCAs make more sense.

The Truth About "Expensive" Financing

Business owners get hung up on cost of capital and miss the bigger picture.

The question isn't "What's the cheapest capital?"

The question is "What capital structure generates the highest NET PROFIT for this specific opportunity?"

Example: The Cost That Creates More Profit

Scenario A: "Cheap" Capital

• SBA loan at 9.5% APR

• Takes 120 days to close

• By day 120, the $200K opportunity is gone

• Net profit: $0

• Cost of capital: 9.5%

• Total return: -$6,000 (you paid fees and the deal died)

Scenario B: "Expensive" Capital

• MCA at 1.38 factor rate (equivalent to ~40-50% APR if held for a year)

• Funded same day

• Closed $200K deal in 48 hours

• Generated $600K in new revenue

• Paid back MCA in 90 days

• Net profit: $324K (after MCA costs)

• Cost of capital: $76K

• Total return: $324,000

Which capital was actually "expensive"?

The "cheap" 9.5% capital that generated zero return.

The "expensive" MCA generated $324,000 in profit.

This Is Why Sophisticated Business Owners Use MCAs

They understand that return ON capital matters more than cost OF capital when the opportunity generates immediate, significant returns.

Why Working With the Right Lender Changes Everything

Not all merchant cash advance lenders operate the same way, and your choice of lender can mean the difference between strategic growth and financial disaster.

Red Flags: Predatory Lenders

❌ They'll fund anyone (no underwriting standards) ❌ They don't ask about your ROI plan (don't care if you succeed) ❌ They'll overleveraging you (stack MCAs until you can't breathe) ❌ High-pressure sales tactics ("This offer expires in 1 hour!") ❌ They broker your deal (middleman marking up costs) ❌ They're not transparent (hidden fees, unclear terms)

Green Flags: Ethical, Strategic Lenders

✅ They have standards (minimum revenue, capital stack analysis) ✅ They ask about your use of funds (want to understand ROI) ✅ They'll decline deals that don't make sense (even when you want the money) ✅ They're direct lenders (no broker markup) ✅ They're transparent (clear terms, no hidden fees) ✅ They have longevity (20+ years in business, thousands of clients)

Why LVRG Business Funding Is Different

We've been doing this for over 20 years. We've funded 10,000+ businesses and facilitated over $1 billion in financing.

We've seen what works and what doesn't.

We've funded businesses that generated 400% ROI with our capital. We've also seen businesses fail when they borrowed at the wrong time for the wrong reasons.

Here's our philosophy:

• We fund growth, not survival

• We'll decline applications that don't make strategic sense (even when we could legally fund them)

• We analyze your complete capital stack (we won't overleveraging you)

• We ask about your ROI plan (because we want you to succeed)

• We're direct lenders (no broker markup, faster decisions)

• We're transparent (you'll always know exactly what you're paying)

This is why our clients come back repeatedly. They use our capital strategically, generate returns, pay us back, and return when the next opportunity arises.

That's sustainable business financing. That's a partnership.

How to Use Merchant Cash Advances Without Getting Burned

If you're going to use merchant cash advances for business growth, here's exactly how to do it right:

Step 1: Calculate Your ROI BEFORE Borrowing

Don't borrow hoping it works out. Know the numbers first.

Questions to answer:

• Exactly how will this capital generate revenue?

• How much revenue will it generate?

• What's the timeline? (30 days? 90 days?)

• What's the gross profit margin?

• What's the net profit after paying back the MCA?

If you can't answer these questions with specific numbers, don't borrow.

Step 2: Require 2x Minimum Return

Never deploy capital unless you expect at least 2x return.

If you're borrowing $100K at 1.35 factor (repay $135K), you should generate minimum $270K in gross revenue from that deployment.

Ideally, aim for 3x-4x return.

Step 3: Keep Your Capital Stack Healthy

Total debt service (all MCAs, loans, obligations) should not exceed 35% of your gross monthly revenue.

Ideal: 20-25%

Example:

• Monthly revenue: $150K

• Ideal debt service: $30K-$37.5K per month

• Max debt service: $52.5K per month

If you're approaching or exceeding 40%, stop. Don't take more capital.

Step 4: Have an Exit Strategy

Before you take the MCA, know exactly when and how you'll pay it back.

• "We'll sell this inventory in 6 weeks and pay back the MCA"

• "This equipment will increase our capacity and we'll pay back the MCA from the additional revenue in 8 weeks"

• "This acquisition will generate immediate cash flow and we'll pay back the MCA in 90 days"

If you don't have a clear exit strategy, don't borrow.

Step 5: Work With a Lender Who Will Say No

The best lenders will decline deals that don't make sense.

If a lender will fund you no matter what, that's a red flag. They don't care if you succeed.

Find a lender who:

• Asks about your ROI plan

• Analyzes your capital stack

• Will decline applications that don't make strategic sense

• Has been around long enough to know what works

That's the lender you want.

The Bottom Line: Merchant Cash Advances Aren't Good or Bad—The Borrower's Strategy Determines The Outcome

After 20+ years and $1 billion in financing, here's what we know for certain:

Merchant cash advances, revenue-based financing, and working capital loans are not inherently good or bad. They're tools.

Like any tool, the outcome depends entirely on who's using it and how they're using it.

• A hammer can build a house or smash your thumb

• A car can get you to work or drive you off a cliff

• A merchant cash advance can generate 300% ROI or bankrupt your business

The difference? Strategy, timing, and purpose.

The Two Types of MCA Borrowers

Type 1: The Strategic Borrower

• Borrows BEFORE desperation hits

• Borrows FOR growth (specific ROI-generating opportunities)

• Borrows WITH a plan (clear deployment and exit strategy)

• Uses capital to scale proven models

• Generates 2x-4x returns

• Pays back quickly

• Repeats the process

• Builds wealth

Type 2: The Desperate Borrower

• Borrows WHEN out of options

• Borrows FOR survival (cover bills, make payroll)

• Borrows WITHOUT a plan (hoping cash fixes problems)

• Uses capital to delay inevitable failure

• Generates negative returns

• Can't pay back

• Takes more debt to cover previous debt

• Destroys business

Same product. Opposite results.

The Question You Should Ask

Don't ask: "Are merchant cash advances good or bad?"

Ask: "Does this specific capital deployment, at this specific time, for this specific purpose, generate positive ROI for my business?"

If the answer is yes, an MCA can be one of the smartest financing decisions you make.

If the answer is no, walk away.

One Final Truth

Merchant cash advances don't fail businesses. Business owners who borrow at the wrong time, for the wrong reasons, with the wrong plan fail businesses.

The product is neutral. The lender can be ethical or predatory. But ultimately, the borrower's situation, timing, strategy, and decision-making determine the outcome.

Take accountability for your borrowing decisions. Borrow strategically, not desperately. Work with lenders who have standards. Deploy capital for growth, not survival.

Do that, and merchant cash advances become one of the most powerful scaling tools available to you.

Ignore that, and you'll become another horror story blaming the industry for your own bad decisions.

The choice is yours.

Frequently Asked Questions About Merchant Cash Advances

How does a merchant cash advance work?

A merchant cash advance provides capital in exchange for a percentage of your future credit card sales or daily bank deposits. Unlike a traditional loan with fixed monthly payments, repayment is automatic and flexible—you pay more when sales are high, less when sales are slow. There's no fixed term; you repay until the agreed-upon amount is satisfied.

Key point: The product itself is neutral. Whether it helps or hurts your business depends entirely on your situation, timing, and how you deploy the capital.

What are merchant cash advance requirements?

Minimum requirements typically include:

• Monthly revenue: $50,000+ (at LVRG)

• Time in business: 6-12 months minimum

• Bank statements: 3-4 months

• Valid business ID

But requirements alone don't determine success. We also evaluate:

• Your capital stack (existing debt obligations)

• Your specific use of funds

• Your ROI plan

• Whether you're borrowing for growth or survival

Strategic borrowers with clear ROI plans get approved. Desperate borrowers without plans get declined—even if they meet minimum requirements.

What are typical merchant cash advance rates and factor rates?

Factor rates typically range from 1.15 to 1.45, meaning you repay $115 to $145 for every $100 borrowed.

But focusing on the rate alone misses the point.

The real question is: What's your return on capital?

• Borrowing $100K at 1.35 factor (cost: $35K) to generate $400K in new revenue = 300%+ ROI

• Borrowing $100K at 1.20 factor (cost: $20K) to cover operating shortfalls with no revenue generation = -20% ROI

Lower rates don't help if you're using capital wrong. Higher rates don't matter if your ROI is massive.

Can I get a merchant cash advance with bad credit?

Yes. MCAs focus on business performance (revenue, cash flow) rather than personal credit scores.

However—and this is critical—just because you CAN get funded doesn't mean you SHOULD.

If your credit is bad because:

• You've been missing payments (cash flow problem)

• You're overleveraged (too much existing debt)

• Your business is declining (revenue problem)

Then an MCA won't help. It will accelerate your collapse.

Bad credit isn't the issue. The issue is WHY you have bad credit. If it's because your business is struggling, more capital won't fix it.

How fast can I get a merchant cash advance?

At LVRG:

• Application: 5 minutes

• Approval decision: 2-3 hours

• Funding: Same day (if approved before 2 PM EST)

But speed is only valuable if you're using it strategically:

✅ Good use of speed: Competitor restaurant closing, you need to acquire their location in 48 hours before someone else does

❌ Bad use of speed: You're desperate, broke, and need money immediately to make payroll

Fast capital in the hands of a strategic borrower = massive returns. Fast capital in the hands of a desperate borrower = faster collapse.

What's the difference between a merchant cash advance and a business loan?

Merchant Cash Advance:

• Repayment: Percentage of daily sales (automatic, flexible)

• Approval: Based on revenue and cash flow

• Speed: Same-day funding

• Term: No fixed term (repay as sales occur)

• Cost: Higher (factor rate 1.15-1.45)

• Best for: Short-term, high-ROI opportunities

Business Loan:

• Repayment: Fixed monthly payments

• Approval: Based on credit, collateral, financials

• Speed: 30-120 days

• Term: Fixed (1-10 years)

• Cost: Lower (APR 6-12%)

• Best for: Long-term assets, large acquisitions

Neither is "better." The right product depends on your specific situation, timing, and use case.

Are merchant cash advances predatory?

This is the wrong question.

The right question is: "Is the LENDER predatory, and am I the right BORROWER for this product?"

Same MCA, same terms, two scenarios:

Scenario A:

• Declining revenue business

• Desperate borrower with no plan

• Using capital for survival

• Predatory lender with no standards

• Result: Disaster

Scenario B:

• Growing revenue business

• Strategic borrower with clear ROI plan

• Using capital for specific opportunity

• Ethical lender with standards who will decline bad deals

• Result: 300% ROI

The product isn't predatory. The combination of desperate borrower + predatory lender + wrong timing = predatory outcome.

Can I pay off a merchant cash advance early?

Yes. And unlike bank loans that PENALIZE early payment, many MCA lenders (including LVRG) REWARD early payment with prepayment discounts.

Example:

• Owe $55,000 remaining

• Pay off early

• Get 10% discount

• New payoff: $49,500

• Saved $5,500 by paying early

This incentive alignment matters: You want to pay back fast (to save money), and the lender wants you to pay back fast (to redeploy capital). Win-win.

What documents do I need for a merchant cash advance?

For most MCA lenders:

• Business bank statements (3-4 months)

• Valid business ID

• Voided business check

That's it. No tax returns, no business plan, no 30-document package like SBA loans.

But minimal documentation doesn't mean no standards.

We also ask:

• What's your specific use of funds?

• What's your expected ROI?

• What's your current capital stack?

• Are you borrowing for growth or survival?

We can fund you in 3 hours, but we won't fund you if your situation doesn't make strategic sense—even if you have all the documents.

What's the biggest mistake business owners make with merchant cash advances?

Waiting until desperation to borrow.

When you wait until:

• Revenue is declining

• Cash is depleted

• Credit is damaged

• Options are exhausted

Then ANY capital—regardless of cost—becomes an anchor that pulls you down faster.

The biggest mistake is using MCAs for survival instead of growth.

The second-biggest mistake is working with predatory lenders who will fund anyone regardless of situation (because they get paid either way).

Strategic borrowers use MCAs when they're already succeeding and need capital to scale faster. Desperate borrowers use MCAs when they're already failing and hope capital will save them.

Same product. Opposite outcomes. The borrower's situation determines the result.

Ready to Use Capital Strategically?

If you have a legitimate growth opportunity that requires fast capital deployment, and you can clearly articulate how it generates ROI, we'd love to talk to you.

LVRG Business Funding
Direct Lender | 20+ Years Experience | $1B+ Financed

What We Offer:

• Loan Amounts: $25,000 - $1.5 Million

• Funding Speed: Same-day funding available

• Approval Time: 2-3 hours

• Positions: 1st through 4th position funding

• Requirements: $50,000+ monthly revenue, clear ROI plan

• Geographic Reach: Nationwide (all 50 states)

Industries We Serve: Restaurants, Retail, Construction, Healthcare, Manufacturing, Professional Services, E-commerce, Hospitality, and more

Our Philosophy: We fund business growth, not business survival. We'll analyze your complete capital stack and ROI plan. If it makes strategic sense, we'll fund it fast. If it doesn't, we'll tell you honestly—even if it means declining the deal.

Contact Us:

Phone: (855) 998-5874
Email: info@lvrgllc.com
Website: LVRGFunding.com

Apply Online: Takes 5 minutes. We'll respond within 2-3 hours with an offer or honest feedback.

Remember: The best capital isn't the cheapest capital. The best capital is the capital that generates the highest net profit when deployed strategically at the right time for the right opportunity.

That's how smart business owners use merchant cash advances to build wealth while others go bankrupt with the same product.

Updated November 28, 2025 - This article reflects LVRG Business Funding's philosophy on strategic capital deployment and responsible lending practices. All information is current as of this date.

Important Disclaimer: All interest rates, factor rates, terms, and financial examples used in this article are for illustrative purposes only and do not represent guaranteed pricing or terms. Actual rates, terms, and costs vary based on individual business circumstances, creditworthiness, revenue, time in business, industry, and other underwriting factors. Contact LVRG Business Funding directly for personalized rate quotes and terms specific to your business situation.

Manufacturing Business Loans Michigan: Equipment Financing, Working Capital & Strategic Growth Capital

Michigan manufacturing drives billions in economic output. From automotive suppliers in Metro Detroit to food processors in West Michigan, precision manufacturers in Ann Arbor to industrial operations across Oakland County, Macomb County, and Wayne County—Michigan manufacturers compete in capital-intensive markets where equipment capacity, production speed, and operational efficiency determine market position.

Running a manufacturing operation in 2025 is more expensive than ever. Labor costs are up 30%+. Raw materials cost more. Energy and overhead have increased 40%. Just maintaining current production requires more capital than expansion used to cost. And yet—growth opportunities appear constantly. The automotive OEM contract that requires doubled capacity. The food processing opportunity that demands automated packaging lines. The metalworking bid that needs precision CNC equipment.

Growth costs money. Equipment costs money. Scale costs money.

At LVRG Business Funding, we've spent over 20 years financing Michigan manufacturers—deploying over $1 billion in equipment financing, working capital, and growth capital to companies across Metro Detroit, Grand Rapids, Kalamazoo, Saginaw, and throughout Michigan's industrial corridors.

We fund growth. We fund scale. We fund the equipment and capital that turn mid-sized manufacturers into market leaders.

If you're a Michigan manufacturer generating $50,000+ monthly and ready to scale production, expand capacity, or dominate your market—this is how you fund that growth.

Why Michigan Manufacturers Need More Capital Than Ever

The Economic Reality for Michigan Manufacturing in 2025

Operating Costs Have Exploded:

• Skilled machinists, welders, operators: $75K-$120K annually

• Energy costs up 35-40% for production facilities

• Raw materials (steel, aluminum, plastics): 25-35% higher than 2020

• Commercial insurance, workers comp: double what they were five years ago

• Just running existing operations costs more than growth capital used to

Equipment Costs Are Higher—But ROI Is Stronger:

• CNC machining center that cost $400K in 2020 now costs $550K—but increases precision output 5x

• Automated production line that cost $2M now costs $3M—but reduces labor costs 50% and increases throughput 3x

• Industrial robotics that cost $800K now cost $1.2M—but operate 24/7 with minimal supervision

Competition Is Fierce:

• Well-capitalized manufacturers are winning major OEM contracts

• Companies with modern equipment are taking market share from operations running 10-year-old machinery

• Automation isn't optional anymore—it's survival

• The gap between funded manufacturers and underfunded competitors grows daily

Michigan manufacturers don't just need capital to grow. They need capital to compete, modernize, and position for the contracts that define the next decade.

Michigan Manufacturing Financing Options: Strategic Comparison

Michigan manufacturers have five primary financing options, each serving different growth objectives and timelines. Understanding which capital source aligns with your specific growth strategy determines success.

Option 1: Cash Flow Financing & Working Capital Loans

Purpose: Immediate capital to capitalize on immediate opportunities

What It Funds:

• Raw materials for major production runs

• Inventory purchases before OEM contract payments arrive

• Labor costs during rapid scaling periods

• Accounts receivable gaps between production and payment

• Quick-turn opportunities requiring immediate capital deployment

Funding Range: $25,000 to $1,500,000

Timeline: 3 to 7 days from application to capital deployment

Best For Michigan Manufacturers When:

• Major contract requires $200K in aluminum stock purchased this week

• Automotive supplier needs to cover payroll during 60-day payment cycles

• Food processor can buy ingredients at 30% discount with immediate payment

• Metal fabricator needs $150K in steel before production starts Monday

Michigan Coverage: Metro Detroit, Oakland County, Macomb County, Wayne County, Grand Rapids, Kalamazoo, Saginaw, statewide

Option 2: Revenue-Based Financing

Purpose: Flexible capital with repayment tied to production output and sales

What It Funds:

• Seasonal inventory for food processors

• Materials for variable production schedules

• Working capital for manufacturers with fluctuating order volumes

• Short-term capacity expansion

Funding Range: $25,000 to $500,000

Timeline: 24 to 72 hours

Repayment Structure: Percentage of daily or weekly revenue—scales with your sales performance

Best For Michigan Manufacturers When:

• Food processor needs capital for peak production season

• Manufacturer has variable order volume month-to-month

• Quick capital needed without fixed monthly payment obligations

• Revenue strong but inconsistent

Michigan Coverage: Manufacturing operations statewide with $50K+ monthly revenue

Option 3: Equipment Financing — LVRG's Specialty

Purpose: Fund major equipment that multiplies production capacity and competitive advantage

What It Funds: Michigan's most sophisticated equipment financing platform, combining direct lending capital with strategic partnerships to deliver $500,000 to $100,000,000+ for equipment that transforms manufacturing operations.

LVRG Equipment Financing Capabilities:

Direct Lending Power: Our own capital means 24-48 hour decisions on qualifying transactions. No third-party approvals. No committee delays. We approve and fund directly from our balance sheet.

Strategic Partnership Network: Beyond direct lending, we maintain exclusive relationships with the nation's premier equipment finance companies—delivering specialized structures, extended capacity, and creative solutions traditional lenders cannot provide.

Unlimited Financing Capacity: $500K for single assets to $100M+ for complete production line transformations. Our capacity scales to your requirements.

Funding Range: $500,000 to $100,000,000+

Timeline: 24-48 hours for direct lending decisions, 5-10 days for complex multi-million dollar transactions

Rates: 6% to 12% (equipment serves as collateral)

Terms: 24 to 84 months based on equipment type and useful life

Financing Structures:

Operating Leases: Maximum cash flow preservation, 100% deductible payments, off-balance-sheet treatment, technology refresh flexibility

Capital Leases: Build equity while financing, depreciation benefits, long-term asset control

Sale-Leaseback Solutions: Extract capital from existing equipment while maintaining operational control—creative valuations maximize cash extraction

Equipment Loans: Traditional ownership structures, immediate asset control, depreciation advantages

Michigan Manufacturing Equipment We Finance

CNC & Precision Manufacturing Equipment:

Machine Tool Centers:

• Haas, Mazak, DMG Mori, Okuma CNC machining centers and turning centers

• Doosan, Hyundai, Mori Seiki precision manufacturing systems

• Multi-axis CNC machines, horizontal machining centers, vertical mills

• Financing: $500K to $10M+ for complete machine shop transformations

Laser Cutting & Fabrication:

• TRUMPF, Bystronic, Amada laser cutting systems

• Cincinnati, Pacific, Accurpress press brakes and metal forming equipment

• Automated sheet metal fabrication systems

• Financing: $800K to $15M for integrated fabrication cells

Metal Forming & Stamping:

• Progressive die stamping presses

• Transfer press systems for automotive production

• Servo press technology for precision forming

• Financing: $1M to $25M+ for stamping operations

Industrial Manufacturing & Automation:

Robotics & Automation:

• ABB, KUKA, Fanuc industrial robotics systems

• Automated assembly lines and production cells

• Material handling automation, conveyor systems

• Pick-and-place, welding, painting, packaging robotics

• Financing: $2M to $50M+ for complete automation projects

Plastics & Injection Molding:

• Engel, Arburg, Milacron injection molding machines

• Welex, Davis-Standard extrusion equipment

• Blow molding, thermoforming systems

• Financing: $600K to $20M for plastics production facilities

Welding & Fabrication:

• Lincoln Electric, Miller welding systems

• Robotic welding cells, automated MIG/TIG systems

• Laser welding, spot welding automation

• Financing: $400K to $8M for welding operations

Food Processing & Packaging Equipment:

Food Processing Lines:

• Buhler, GEA, Tetra Pak processing systems

• Meat processing, dairy processing, beverage production

• Industrial cooking, baking, mixing equipment

• Financing: $1M to $40M for complete food processing facilities

Packaging & Automation:

• Krones, KHS packaging and bottling systems

• Heat and Control, TNA automated packaging equipment

• Filling, capping, labeling, palletizing systems

• Financing: $800K to $25M+ for packaging automation

Cold Storage & Logistics:

• Industrial refrigeration systems, blast freezers

• Automated cold storage and retrieval systems

• Temperature-controlled logistics equipment

• Financing: $1M to $30M for cold chain infrastructure

Automotive Manufacturing Equipment:

Automotive Production Systems:

• Assembly line equipment for tier 1 and tier 2 suppliers

• Paint booths, powder coating systems

• Quality inspection systems, metrology equipment

• Testing and validation equipment

• Financing: $2M to $100M+ for automotive production facilities

Specialized Automotive Equipment:

• Injection molding for interior components

• Stamping and forming for body panels and structural parts

• Machining centers for powertrain components

• Finishing and coating systems

• Financing: Custom structures for Michigan's automotive supply chain

Equipment Financing Success Stories: Michigan Manufacturers

$18M Manufacturing Automation Project:
Multi-state manufacturer required complete production line upgrade including robotics, automated quality systems, and material handling. LVRG combined direct lending with strategic partner funding to deliver 100% financing with deferred payments aligned to production ramp-up timeline. Result: 4x production capacity, 50% labor cost reduction, $12M in new annual contracts.

$12M CNC Machining Center Expansion:
Precision manufacturer needed eight Mazak 5-axis machining centers to service automotive and aerospace clients. Structured as capital lease with Section 179 depreciation benefits and performance-based payment adjustments. Result: Entered aerospace market, doubled revenue within 18 months.

$25M Food Processing Facility:
Regional food processor required complete automated packaging line plus cold storage expansion. Combined equipment financing with real estate components, progress funding over 10-month installation. Result: Tripled production capacity, secured major retail contracts, became regional market leader.

$8M Metal Fabrication Equipment:
Job shop needed TRUMPF laser cutting systems plus automated material handling to compete for tier 1 automotive work. Operating lease structure with technology refresh options and seasonal payment flexibility. Result: Won three major OEM contracts, increased margins 35%.

Option 4: SBA 7(a) Loans for Manufacturing Growth

Purpose: Government-backed financing for business acquisitions, major equipment, real estate, and multi-purpose growth capital

Loan Amounts: $500,000 to $5,000,000

Timeline: 45 to 90 days

Best For Michigan Manufacturers When:

• Acquiring a competitor to consolidate market share

• Purchasing owner-occupied manufacturing facility

• Financing major equipment plus working capital in single package

• Need lowest possible rates with extended terms

Use Cases:

• $2.5M to acquire competing metal fabricator and consolidate operations

• $3M for facility purchase plus $1M in equipment and working capital

• $4M for production equipment with 10-year term at SBA rates

Michigan SBA Manufacturing Financing:
LVRG facilitates SBA loans for manufacturers across Metro Detroit, Grand Rapids, Kalamazoo, Saginaw, and statewide.

Option 5: SBA 504 Loans for Manufacturing Real Estate & Major Equipment

Purpose: Long-term, fixed-rate financing for owner-occupied real estate and major fixed assets

Loan Amounts:

• Standard: Up to $5,500,000

• Manufacturing projects: Up to $16,500,000

• Energy-efficient manufacturing: Up to $16,500,000

Timeline: 60 to 90 days

Best For Michigan Manufacturers When:

• Purchasing or constructing manufacturing facility

• Major equipment investments with 10+ year useful life

• Want fixed rates for 20-25 years (no interest rate risk)

• Qualify for manufacturing-specific higher loan limits

Use Cases:

• $6M for 60,000 sq ft manufacturing facility purchase

• $12M for new automated production facility construction

• $8M for major production equipment with fixed 20-year financing

SBA 504 Advantages for Michigan Manufacturers:

• Lowest down payment (10% for existing businesses)

• Fixed rates (no rate risk over 20-25 years)

• Longer terms than conventional loans

• Manufacturing-specific higher limits up to $16.5M

Strategic Financing Decision Framework for Michigan Manufacturers

When to Use Working Capital (3-7 Days):

✓ Raw materials needed this week for major production run
✓ Bridge accounts receivable gap before OEM payment
✓ Inventory opportunity requiring immediate capital
✓ Short-term growth needs under $1.5M

When to Use Revenue-Based Financing (24-72 Hours):

✓ Seasonal production cycles
✓ Variable monthly order volumes
✓ Need flexible repayment tied to revenue
✓ Fast capital under $500K

When to Use Equipment Financing (5-14 Days):

✓ CNC machines, production lines, automation that multiply capacity
✓ Equipment purchases $500K to $100M+
✓ Want to preserve working capital
✓ Equipment ROI justifies financing cost
✓ Need 24-48 hour decisions (LVRG direct lending)

When to Use SBA 7(a) (45-90 Days):

✓ Business acquisition to consolidate market
✓ Owner-occupied facility purchase
✓ Multi-purpose package (equipment + working capital + real estate)
✓ Want lowest rates with government backing

When to Use SBA 504 (60-90 Days):

✓ Manufacturing facility purchase or construction
✓ Major equipment with 10+ year life
✓ Want fixed rates for 20-25 years
✓ Qualify for manufacturing limits up to $16.5M

Why Michigan Manufacturers Choose LVRG

Direct Lending + Strategic Partnerships = Unlimited Capacity

Direct Lending Power:
Our own capital means immediate 24-48 hour decisions on qualifying equipment transactions. No third-party approvals. No committee delays. We approve and fund directly.

Strategic Partnership Network:
Beyond our direct lending, we maintain exclusive relationships with the nation's premier equipment finance companies—delivering $500K to $100M+ capacity for Michigan's largest manufacturing equipment needs.

The Result:
Whether you need $750K for CNC machines or $50M for complete facility automation, we structure deals others cannot.

20+ Years Financing Michigan Manufacturing

We understand Michigan's manufacturing industries:

• Automotive suppliers: Tier 1, tier 2, tier 3 production equipment

• Precision manufacturing: CNC, machining, metal fabrication

• Food processing: Processing lines, packaging automation, cold storage

• Industrial production: Stamping, molding, casting, assembly

• Specialized manufacturing: Aerospace components, medical devices, industrial equipment

Speed & Execution

• Equipment financing decisions: 24-48 hours (direct deals)

• Working capital: 3-7 days

• Revenue-based: 24-72 hours

• Complex multi-million equipment deals: 5-10 days

• SBA loans: 45-90 days

No 90-day bank processes. Just capital deployed when manufacturing opportunities demand it.

Michigan Manufacturing Coverage

Metro Detroit & Tri-County Manufacturing Hub

Wayne County Manufacturing:
Detroit's industrial corridors, Dearborn's automotive suppliers, manufacturing operations throughout Michigan's largest county. We finance CNC equipment, production lines, automation systems, and working capital for Metro Detroit manufacturers.

Oakland County Manufacturing:
Troy, Southfield, Farmington Hills, Novi—precision manufacturing, automotive suppliers, advanced manufacturing operations. Equipment financing for the machinery that powers Oakland County's industrial economy.

Macomb County Manufacturing:
Sterling Heights, Warren, Clinton Township—Michigan's automotive heartland. We finance stamping equipment, assembly systems, machining centers, and the production equipment that serves major OEMs.

West Michigan Manufacturing

Grand Rapids & Kent County:
Furniture manufacturing, metal fabrication, food processing, industrial production. Equipment financing for West Michigan's diverse manufacturing base.

Holland, Muskegon & Ottawa County:
Automotive suppliers, agricultural equipment, food processing. Specialized equipment financing for lakeshore manufacturing operations.

Mid-Michigan Manufacturing

Lansing, Flint, Saginaw:
Automotive components, precision machining, industrial production. Equipment and working capital for Mid-Michigan's manufacturing corridor.

Southeast Michigan Manufacturing

Ann Arbor & Washtenaw County:
Advanced manufacturing, automotive technology, precision engineering. Equipment financing for innovation-driven manufacturing operations.

Statewide Michigan Manufacturing

Kalamazoo industrial production, Battle Creek food processing, Bay City manufacturing, Midland chemical and industrial, Traverse City specialized manufacturing, Upper Peninsula industrial operations—LVRG finances equipment and growth capital for manufacturers throughout Michigan.

Frequently Asked Questions: Michigan Manufacturing Financing

Q: How quickly can Michigan manufacturers access equipment financing?
A: LVRG direct lending provides 24-48 hour decisions on qualifying equipment transactions. Complex multi-million dollar deals typically receive approval within 5-10 business days.

Q: What's the minimum equipment financing amount?
A: LVRG specializes in $500,000 to $100,000,000+ equipment transactions. For working capital under $500K, we offer fast 3-7 day approvals.

Q: Can we finance 100% of equipment cost?
A: Yes. LVRG routinely structures 100% financing including soft costs, installation, and freight for qualified transactions.

Q: Do you finance used manufacturing equipment?
A: Yes, for equipment under 10 years old with verified condition and market value. New equipment receives preferential rates and terms.

Q: What credit profile is required for manufacturing equipment financing?
A: Minimum 680 credit score for equipment financing. 650+ for working capital. Strong revenue and equipment ROI can offset credit concerns.

Q: Can we combine equipment financing with working capital?
A: Absolutely. We structure combination packages—equipment financing for production assets plus working capital for materials, inventory, and operations.

Q: How does LVRG's direct lending differ from bank equipment loans?
A: Speed and structure. Our direct capital means 24-48 hour decisions vs. banks' 30-60 day processes. We structure creative deals banks cannot—sale-leasebacks, progress funding, seasonal adjustments, deferred payments.

Q: What industries does LVRG specialize in for equipment financing?
A: Automotive manufacturing, precision machining, metal fabrication, food processing, plastics/injection molding, industrial production, and specialized manufacturing operations across Michigan.

Q: Do you finance equipment for manufacturers outside Metro Detroit?
A: Yes. We finance manufacturing equipment statewide—Grand Rapids, Kalamazoo, Saginaw, Ann Arbor, and throughout Michigan's industrial regions.

Ready to Scale Your Michigan Manufacturing Operation?

Equipment limitations shouldn't constrain manufacturing growth. When the CNC machines that will quadruple precision capacity become available, when automation systems that reduce labor costs 50% hit the market, when production line upgrades that enable major OEM contracts are within reach—you need capital deployed FAST.

That's what LVRG does for Michigan manufacturers. We combine direct lending power with strategic partnerships to deliver $500K to $100M+ in equipment financing, working capital, and growth capital that transforms mid-sized manufacturers into market leaders.

Contact LVRG Manufacturing Finance Specialists

Headquarters: Downtown Detroit, Michigan
Service Area: Michigan manufacturing operations statewide
Financing Range: $25,000 to $100,000,000+

Apply Online: lvrgfunding.com/apply-now
Equipment Finance Direct: (855) 998-5874
Email: info@lvrgfunding.com

Modern capital for Michigan manufacturing growth. If you're ready to scale production, expand capacity, or dominate your market—let's talk.

About LVRG Business Funding

For over 20 years, LVRG Business Funding has served as Michigan's manufacturing finance authority—deploying over $1 billion in equipment financing, working capital, and growth capital to manufacturers across Metro Detroit, Oakland County, Macomb County, Wayne County, Kent County, and throughout Michigan's industrial corridors.

We combine direct lending capital with strategic partnerships to deliver equipment financing from $500,000 to $100,000,000+—enabling Michigan manufacturers to acquire the CNC machines, production lines, automation systems, and industrial equipment that multiply capacity and competitive advantage.

Our clients don't come to us to survive. They come to scale, modernize, automate, and dominate. We deploy capital with 24-48 hour decisions so Michigan's most ambitious manufacturers can capitalize on equipment opportunities the moment they appear.

If it has to do with manufacturing growth in Michigan, it has to do with LVRG.

Business Loans Michigan: Modern Capital for Growth-Ready Companies

Running a business in Michigan today is the most expensive it's ever been. Labor costs are up 30%. Materials cost more. Overhead has doubled. Inflation has made just staying in business more capital-intensive than growing used to be a decade ago.

And yet—growth opportunities still appear every single day. The manufacturer in Sterling Heights who can quadruple output by adding two CNC machines. The contractor in Grand Rapids who just won a $3M project but needs to buy materials upfront. The distributor in Detroit who found 10 truckloads of inventory at 40% off—but only if they buy this week. The restaurant in Ann Arbor ready to open location #2.

Growth costs money. More money than ever before.

That's where LVRG Business Funding comes in. For over 20 years, we've deployed more than $1 billion to Michigan businesses across Metro Detroit, Oakland County, Macomb County, Wayne County, Kent County, and throughout the state—providing the modern capital solutions that modern businesses need to scale, expand, and dominate their markets.

We don't fund survival. We fund growth. If you're a Michigan business generating $50,000+ monthly and ready to capitalize on what's next, this is how you fuel that growth.

Why Modern Michigan Businesses Need More Capital Than Ever

The economic reality facing Michigan businesses today is unprecedented:

Operating Costs Have Exploded

• Skilled labor costs 30-50% more than five years ago

• Commercial insurance premiums have doubled

• Fuel, utilities, and overhead have increased 40%+

• Materials and inventory cost significantly more

• Just maintaining current operations requires more cash than growth used to require

Growth Opportunities Cost More—But Deliver Higher Returns

• Equipment that used to cost $200K now costs $300K—but increases output 4x

• Marketing campaigns cost more—but reach more qualified buyers

• Quality employees command higher salaries—but drive more revenue

• Prime real estate costs more—but positions you in high-traffic markets

Competitors Are Capitalizing or Getting Left Behind

• Well-capitalized businesses are buying market share

• Undercapitalized competitors are shrinking or failing

• The gap between funded growth and stagnation has never been wider

Modern businesses don't just need capital to grow. They need capital to compete, survive, and position for the opportunities that appear daily in Michigan's dynamic economy.

What Growth Actually Costs in Today's Economy

Let's talk real numbers about what it actually costs to scale a Michigan business in 2025:

For Manufacturers:

• Adding production equipment to double capacity: $500K to $5M

• Hiring skilled machinists and operators: $80K-$120K per employee annually

• Inventory to fulfill larger contracts: $100K to $1M+

• Result: 3-4x revenue increase, major client acquisition, competitive moat

For Construction Companies:

• Equipment to bid on larger projects: $300K to $2M per major piece

• Materials before client payments arrive: $50K to $500K per project

• Crew expansion to handle multiple jobs: $75K-$100K per skilled worker

• Result: Bid on 10x larger projects, increase margins, dominate market

For Restaurants & Hospitality:

• Second location build-out: $300K to $1.5M

• Kitchen equipment and technology: $100K to $500K

• Pre-opening inventory and staffing: $50K to $200K

• Result: Double revenue, establish brand presence, economies of scale

For Distributors & Wholesalers:

• Inventory purchases to lock in pricing: $200K to $5M

• Warehouse expansion or additional facilities: $500K to $3M

• Fleet expansion for delivery capacity: $150K to $1M

• Result: Negotiate volume pricing, increase margins, capture market share

For Healthcare Providers:

• Advanced diagnostic equipment: $300K to $2M

• Practice expansion or additional locations: $400K to $1.5M

• Staff expansion to increase patient capacity: $100K to $500K

• Result: Serve more patients, offer premium services, command higher rates

Every single growth opportunity costs money. The businesses that access capital fast win. The ones that wait—or can't access capital—watch opportunities disappear.

Modern Funding Solutions for Michigan Businesses

Working Capital: Immediate Fuel for Immediate Growth

What It Funds:
Working capital deploys cash NOW for the opportunities that appear this week—not next quarter. Stock inventory when your supplier offers bulk discounts. Cover payroll while ramping up for a major contract. Bridge the gap between materials purchase and client payment. Launch the marketing campaign that will 3x your pipeline.

Funding Range: $25,000 to $1,500,000

Timeline: 3 to 7 days from application to capital deployment

Real Growth Applications:

• Construction: Fund $200K in materials for a $800K project starting Monday

• Manufacturing: Purchase $150K in raw materials to fulfill order 3x your normal volume

• Retail: Buy $75K in inventory for Black Friday when your distributor offers 35% off in October

• Healthcare: Hire two additional providers to handle patient backlog and expand hours

• Distribution: Buy competitor's remaining inventory at liquidation pricing

Michigan Coverage:
Fast working capital deployment across Metro Detroit, Grand Rapids, Ann Arbor, Lansing, Flint, Kalamazoo, and throughout Oakland County, Macomb County, Wayne County, Kent County, and statewide.

Qualification:

• $50,000+ monthly revenue

• 6+ months in business

• Clear growth opportunity requiring immediate capital

Equipment Financing: Scale Your Capacity, Multiply Your Output

What It Funds:
Equipment financing puts major production assets in your operation fast—enabling you to take on larger clients, increase output, improve efficiency, and outcompete businesses running outdated equipment.

Funding Range: $100,000 to $50,000,000+

Timeline: 5 to 14 days for qualified equipment purchases

Real Growth Applications:

Manufacturing:

• Add two CNC machines ($600K) to quadruple production capacity

• Purchase automated assembly line ($2M) to reduce labor costs 40%

• Install industrial packaging equipment ($400K) to fulfill major retail contracts

Construction:

• Buy excavators and dozers ($1.5M) to bid on commercial projects 10x your current size

• Add concrete equipment ($800K) to bring formerly subcontracted work in-house

• Purchase dump trucks and haulers ($500K) to increase project margins

Transportation:

• Expand fleet with 10 semi-trucks ($1.2M) to service new logistics contract

• Add specialized refrigerated trailers ($600K) to enter cold chain market

• Purchase last-mile delivery vans ($300K) to offer premium shipping

Healthcare:

• Install MRI or CT scanner ($1.5M) to offer advanced diagnostics in-house

• Purchase dental equipment suite ($400K) for second location

• Add surgical equipment ($800K) to expand service offerings

Agriculture:

• Buy combines and harvesters ($900K) to increase acreage capacity 3x

• Purchase irrigation systems ($400K) to improve yields and reduce risk

• Add grain storage and drying ($1.2M) to capture post-harvest pricing

Food Service:

• Install commercial kitchen buildout ($300K) for high-volume catering

• Purchase brewing and distilling systems ($500K) for production expansion

• Add food truck fleet ($200K) for event and festival revenue

Rates: 6% to 12% (equipment serves as collateral)

Terms: 3 to 10 years based on equipment useful life

Michigan Equipment Financing:
We finance equipment purchases for Michigan manufacturers, contractors, healthcare providers, agricultural operations, and transportation companies throughout Metro Detroit's industrial corridor, West Michigan's manufacturing centers, agricultural regions statewide, and every Michigan county.

Revenue-Based Financing: Flexible Capital for Variable Revenue Businesses

What It Funds:
Revenue-based financing provides capital with repayment tied to your sales performance—enabling businesses with strong but variable revenue to access growth capital without the rigidity of fixed monthly payments.

Funding Range: $25,000 to $500,000

Timeline: 24 to 72 hours

Real Growth Applications:

• Retail: Stock seasonal inventory before peak season without draining cash reserves

• Restaurants: Launch aggressive marketing campaign to fill slower weekdays

• E-commerce: Purchase inventory for new product line launch

• Hospitality: Invest in property improvements during slower season to command higher rates

Repayment Structure:
Daily or weekly payments as a percentage of revenue—higher payments during strong periods, lower during slower times. Your capital costs scale with your business performance.

Michigan Coverage:
Revenue-based financing available statewide for retail, restaurant, hospitality, and service businesses with $50,000+ monthly revenue.

SBA Loans: Institutional Capital for Major Growth Moves

What They Fund:
SBA loans deliver government-backed financing at competitive rates for the biggest growth plays—business acquisitions, commercial real estate purchases, major equipment investments, and large-scale expansions.

Loan Amounts:

• SBA 7(a): $500,000 to $5,000,000

• SBA 504: $500,000 to $16,500,000 (manufacturing and energy projects)

• SBA 504 Commercial Real Estate: Regularly structured $5M to $15M+

• SBA Express: Up to $500,000

Timeline: 45 to 90 days (7a and 504), 10 to 14 days (Express)

Real Growth Applications:

• Business Acquisition: Buy your competitor for $2M and consolidate market share

• Commercial Real Estate: Purchase your facility for $3.5M and eliminate rent forever

• Major Equipment: Finance $5M in production equipment to enter new market segments

• Multi-Location Expansion: Fund $1.5M build-out of three new retail locations

Michigan SBA Financing:
LVRG facilitates SBA loans for Michigan businesses throughout Metro Detroit, Grand Rapids, Ann Arbor, Lansing, and statewide.

Michigan Industries We Fuel

Manufacturing & Industrial: Scale Production, Capture Major Contracts

Michigan manufacturing drives billions in economic output. We fund the equipment, inventory, and expansion capital that enables manufacturers to scale.

Growth Capital For:

• Production equipment to multiply output

• Inventory to fulfill major OEM contracts

• Facility expansion or acquisition

• Automation to reduce costs and improve quality

Markets: Metro Detroit automotive suppliers, Grand Rapids advanced manufacturing, Kalamazoo industrial production, Saginaw manufacturing corridor, statewide industrial operations

Construction & Contracting: Bid Bigger, Build Faster, Dominate Markets

Construction companies need capital to buy equipment, purchase materials before payment, and scale crews to handle multiple large projects simultaneously.

Growth Capital For:

• Heavy equipment to bid on commercial and infrastructure projects

• Materials financing before owner payments arrive

• Fleet expansion to service multiple job sites

• Bonding capacity through improved capitalization

Markets: Oakland County contractors, Macomb County builders, Wayne County heavy civil, Kent County construction, statewide contracting operations

Healthcare: Expand Capacity, Offer Premium Services, Dominate Your Market

Medical practices, dental offices, and healthcare facilities compete on technology, convenience, and service breadth. Capital enables expansion.

Growth Capital For:

• Advanced diagnostic and treatment equipment

• Second and third location expansion

• Practice acquisitions to consolidate market share

• Staff expansion to reduce wait times and increase patient volume

Markets: Ann Arbor medical practices, Grand Rapids healthcare, Lansing medical facilities, Metro Detroit healthcare providers, statewide coverage

Restaurants & Hospitality: Launch New Locations, Scale Your Brand

Restaurant and hospitality growth means new locations, upgraded facilities, enhanced experiences, and marketing that drives traffic.

Growth Capital For:

• Second, third, fourth location build-outs

• Kitchen equipment for higher-volume production

• Marketing campaigns to establish brand presence

• Seasonal inventory and staffing for peak periods

Markets: Detroit restaurants, Grand Rapids dining, Ann Arbor hospitality, Traverse City tourism, statewide restaurant operators

Retail & E-Commerce: Stock Inventory, Launch Products, Scale Operations

Retail success requires capital to stock inventory, launch new product lines, expand locations, and market aggressively.

Growth Capital For:

• Inventory purchases to capture bulk discounts

• New product line launches

• Additional retail locations

• E-commerce platform expansion and marketing

Markets: Metro Detroit retail, Grand Rapids commerce, Ann Arbor retail corridor, statewide retail operations

Transportation & Logistics: Expand Fleets, Service Larger Contracts

Transportation businesses scale by adding vehicles, expanding service areas, and servicing larger logistics contracts that require substantial fleet capacity.

Growth Capital For:

• Semi-truck and trailer fleet expansion

• Specialized equipment (refrigerated, flatbed, tanker)

• Warehouse and distribution facility expansion

• Technology and dispatch systems

Markets: I-94 and I-75 logistics corridors, Metro Detroit transportation, Port Huron freight, statewide logistics operations

Geographic Coverage: Fueling Growth Across Michigan

Metro Detroit & Tri-County: Michigan's Economic Engine

We serve growth-focused businesses throughout Michigan's largest metropolitan area, where manufacturers, contractors, healthcare providers, and service businesses compete in dynamic, capital-intensive markets.

Wayne County: From Detroit's industrial corridors to Dearborn's manufacturing hub, Livonia's commercial districts to Canton's growing business community, we finance the equipment purchases, working capital needs, and expansion projects that fuel Metro Detroit's economic growth.

Oakland County: Troy's corporate corridor, Southfield's business district, Farmington Hills' professional services, Novi's retail and technology sectors, and Rochester Hills' healthcare market represent some of Michigan's most sophisticated business environments. We provide the capital that enables these businesses to scale.

Macomb County: Sterling Heights, Warren, Clinton Township, and Shelby Township form Michigan's manufacturing heartland—automotive suppliers, industrial operations, and the contractors who support them. Equipment financing, working capital, and growth loans fuel this region's continued dominance.

West Michigan: Manufacturing & Distribution Hub

Kent County: Grand Rapids anchors West Michigan's economy with manufacturing, healthcare, hospitality, and professional services. We finance equipment purchases, facility expansions, business acquisitions, and the working capital that enables rapid growth.

Ottawa & Muskegon Counties: Holland, Grand Haven, Zeeland, Muskegon, and surrounding communities represent thriving manufacturing, agriculture, and tourism markets requiring capital for equipment, expansion, and seasonal operations.

Mid-Michigan: Government, Healthcare & Automotive

Ingham County: Lansing's government contracting sector, healthcare providers, and professional services create unique capital needs. We understand this market and deploy capital accordingly.

Genesee County: Flint's manufacturing resurgence, Burton's industrial operations, and the region's automotive supplier network benefit from our equipment financing and growth capital expertise.

Southeast Michigan: Innovation & Advanced Industries

Washtenaw County: Ann Arbor's healthcare, technology, manufacturing, and retail sectors demand sophisticated financing solutions. We provide capital for medical equipment, facility expansion, inventory financing, and business growth across this innovation corridor.

Statewide Michigan Coverage

Beyond major metros, we finance growth for Michigan businesses in Kalamazoo, Battle Creek, Saginaw, Bay City, Midland, Port Huron, Traverse City, Petoskey, Marquette, and communities throughout Central Michigan, Northern Michigan, the Thumb Region, and the Upper Peninsula.

If you're a Michigan business ready to grow, we're ready to fund that growth.

Why Growth-Focused Michigan Businesses Choose LVRG

We Understand Growth Economics

We've deployed over $1 billion to Michigan businesses over 20 years. We understand that growth costs money, opportunities don't wait, and speed matters. Banks move in quarters. We move in days.

Direct Lending + Institutional Partnerships

We deploy our own capital for working capital and equipment financing. We facilitate SBA loans and term financing through institutional partners. This dual approach means more options, better terms, and faster execution than any single lender can provide.

We Speak Your Industry

Whether you're scaling a manufacturing operation, expanding a construction business, launching restaurant locations, or growing a healthcare practice—we understand your growth economics, your capital needs, and your competitive dynamics.

Speed & Execution

• Working capital: 3-7 days

• Revenue-based: 24-72 hours

• Equipment financing: 5-14 days

• SBA loans: 45-90 days

No 12-week bank processes. No endless committee approvals. Just capital deployed when opportunity demands it.

Frequently Asked Questions

Q: How quickly can Michigan businesses access growth capital?
A: Timeline varies by financing type:

• Revenue-based: 24-72 hours

• Working capital: 3-7 days

• Equipment financing: 5-14 days

• SBA loans: 45-90 days

Q: What separates LVRG from traditional Michigan banks?
A: Speed, flexibility, and growth focus. Banks are built for stability and risk avoidance. We're built to fuel growth. We deploy capital in days, not months. We understand that growth opportunities have expiration dates.

Q: Do you work with businesses outside Metro Detroit?
A: Yes. We serve Michigan businesses statewide—Grand Rapids, Ann Arbor, Lansing, Flint, Kalamazoo, Traverse City, and every region including rural areas and the Upper Peninsula.

Q: What credit profile is required?
A: Minimum standards:

• Working capital: 650+ credit score

• Equipment financing: 680+ credit score

• Revenue-based: 600+ (flexible based on revenue)

• SBA loans: 680+ credit score

Strong revenue and clear growth plans can offset credit concerns.

Q: What if we need capital for multiple growth initiatives?
A: We structure combination financing packages—equipment financing plus working capital, for example—designed to fund comprehensive growth strategies rather than single-purpose loans.

Q: How much can Michigan businesses access?
A: Financing ranges:

• Working capital: $25K to $1.5M

• Revenue-based: $25K to $500K

• Equipment financing: $100K to $50M+

• SBA loans: $500K to $16.5M

Q: What industries does LVRG finance?
A: We finance growth-focused businesses across manufacturing, construction, healthcare, hospitality, retail, distribution, transportation, and professional services. We do not finance startups, pre-revenue companies, or high-risk speculative ventures.

Ready to Fund Your Michigan Business Growth?

Growth opportunities don't wait for bank approvals. When the opportunity appears—the equipment that will 4x your output, the contract that will transform your business, the competitor available for acquisition, the location that will double your revenue—you need capital deployed FAST.

That's what LVRG does. We fund growth for Michigan businesses ready to scale.

Contact LVRG Business Funding

Headquarters: Downtown Detroit, Michigan
Service Area: Michigan and nationwide
Financing Range: $25,000 to $50,000,000

Apply Online: lvrgfunding.com/apply-now
Call Direct: (855) 998-5874

Modern capital for modern Michigan businesses. If you're ready to grow, let's talk.

About LVRG Business Funding

For over 20 years, LVRG Business Funding has served as Michigan's growth capital authority—deploying more than $1 billion to businesses across Metro Detroit, Oakland County, Macomb County, Wayne County, Kent County, and throughout Michigan.

We specialize in working capital loans, equipment financing, revenue-based financing, and SBA loans from $25,000 to $50,000,000 for businesses that understand one fundamental truth: growth costs money, and speed matters.

Our clients don't come to us to survive. They come to us to scale, expand, acquire, and dominate. We deploy capital fast so Michigan's most ambitious businesses can capitalize on opportunities the moment they appear.

If it has to do with business growth in Michigan, it has to do with LVRG.

SBA Loans in Michigan: Your Complete Guide to 7(a), 504, and Express Financing

If you're a Michigan business owner looking to expand, purchase commercial real estate, acquire equipment, or buy an existing business, SBA loans offer some of the most competitive rates and favorable terms available. But navigating the Small Business Administration loan process can feel overwhelming—especially if you're doing it for the first time.

At LVRG Business Funding, we've facilitated hundreds of SBA loans for Michigan businesses over the past 20 years. From Detroit to Grand Rapids, Ann Arbor to Lansing, we've helped established companies across the state access SBA 7(a), SBA 504, and SBA Express financing to fuel growth and achieve their strategic objectives.

This comprehensive guide covers everything Michigan business owners need to know about SBA loans—including program details, qualification requirements, approval timelines, and how to choose the right SBA loan for your business.

What Are SBA Loans?

SBA loans are government-backed financing programs administered by the U.S. Small Business Administration. The SBA doesn't lend money directly to businesses. Instead, it guarantees a portion of loans made by approved lenders—typically banks and credit unions—which reduces lender risk and enables them to offer more favorable terms than conventional business loans.

For Michigan business owners, SBA loans provide:

• Lower interest rates than traditional bank loans

• Longer repayment terms (up to 25 years for real estate)

• Higher loan amounts (up to $5 million for 7(a), $5.5 million for 504)

• Lower down payments (typically 10% vs. 20-30% for conventional loans)

• Flexible use of funds for expansion, equipment, real estate, and acquisitions

Types of SBA Loans Available in Michigan

SBA 7(a) Loans: The Most Versatile SBA Program

What It Is:
The SBA 7(a) loan program is the most popular and flexible SBA financing option. It can be used for nearly any legitimate business purpose.

Loan Amounts:

• Maximum: $5,000,000

• Typical range: $500,000 to $5,000,000

• Average loan size: $500,000 to $2,000,000

Use Cases:

• Working capital and cash flow

• Business acquisitions and buyouts

• Equipment purchases

• Commercial real estate (owner-occupied)

• Refinancing existing debt

• Expansion and growth capital

• Partner buyouts

Interest Rates:
SBA 7(a) loans typically feature rates tied to the Prime Rate:

• Prime Rate + 2.25% to 2.75% for loans over $50,000

• Fixed or variable rate options available

• As of 2025, typical rates range from 8% to 11%

Repayment Terms:

• Real estate: Up to 25 years

• Equipment: Up to 10 years

• Working capital: Up to 10 years

Down Payment:
Typically 10% for existing businesses with strong financials

Approval Timeline:
60 to 90 days from application to funding

Best For:
Michigan businesses seeking flexible financing for multiple purposes, business acquisitions, or expansion projects requiring $500K to $5M.

Availability in Michigan:
LVRG facilitates SBA 7(a) loans for businesses throughout Michigan, including Detroit SBA loans, Grand Rapids SBA financing, Ann Arbor business acquisitions, and companies across Metro Detroit, Oakland County, Macomb County, Wayne County, Kent County, and statewide.

SBA 504 Loans: Commercial Real Estate & Major Equipment

What It Is:
The SBA 504 loan program is specifically designed for purchasing owner-occupied commercial real estate and major fixed assets. It's structured as two separate loans: 50% from a conventional lender, 40% from a Certified Development Company (CDC), and 10% down payment from the borrower.

Loan Amounts:

• Maximum: $5,500,000 (standard)

• Maximum: $5,500,000 to $16,500,000 (for manufacturing or energy efficiency projects)

• Typical range: $500,000 to $10,000,000

Use Cases:

• Purchasing commercial real estate for business operations

• Constructing new facilities

• Major equipment purchases (machinery with useful life of 10+ years)

• Modernizing or renovating facilities

• Refinancing existing commercial mortgages (limited circumstances)

Interest Rates:
SBA 504 loans offer some of the lowest rates available:

• CDC portion: Fixed rate, typically 5% to 7%

• Bank portion: Varies, typically Prime + 1% to 2.5%

• Overall effective rate: 6% to 8% (blended)

Repayment Terms:

• 20 years (standard real estate and equipment)

• 25 years (specific projects meeting job creation criteria)

Down Payment:

• 10% for existing businesses

• 15% for new businesses (less than 2 years old)

• 15% for special purpose properties

Approval Timeline:
60 to 120 days from application to funding

Best For:
Michigan businesses purchasing commercial property or investing in major equipment with long useful lives. Ideal when you want the lowest possible rates and longest terms.

Availability in Michigan:
LVRG facilitates SBA 504 loans for Michigan businesses purchasing commercial real estate in Detroit, Grand Rapids, Ann Arbor, Lansing, Flint, and throughout Oakland County, Macomb County, Wayne County, Kent County, and statewide.

SBA Express Loans: Faster SBA Financing

What It Is:
SBA Express is a streamlined version of the 7(a) program that offers faster approval and funding in exchange for lower maximum loan amounts.

Loan Amounts:

• Maximum: $500,000 (increased from $350,000 in recent years)

• Typical range: $50,000 to $500,000

Use Cases:

• Working capital

• Equipment purchases

• Inventory

• Business expansion

• Debt refinancing

Interest Rates:

• Similar to SBA 7(a): Prime + 4.5% to 6.5%

• Typically 9% to 12%

Repayment Terms:

• Up to 10 years for working capital and equipment

• Up to 25 years for real estate

Down Payment:
Typically 10% to 20% depending on use of funds

Approval Timeline:
Approximately 2 weeks from application to funding (significantly faster than traditional SBA 7(a))

Best For:
Michigan businesses that need SBA-quality rates and terms but require faster funding and don't need more than $500,000.

Availability in Michigan:
LVRG facilitates SBA Express loans for businesses throughout Michigan needing expedited SBA financing in Detroit, Grand Rapids, Ann Arbor, Lansing, and across the state.

SBA Loan Requirements for Michigan Businesses

To qualify for SBA financing in Michigan, businesses must meet both SBA-mandated requirements and individual lender criteria.

Basic SBA Eligibility Requirements:

Business Type:

✓ For-profit business
✓ Operates in the United States
✓ Meets SBA size standards (typically under 500 employees for most industries)
✓ Not engaged in prohibited activities (speculation, lending, passive investment)

Operating History:
✓ At least 2 years in business (preferred)
✓ Startups may qualify with strong personal credit and industry experience

Credit Requirements:
✓ Personal credit score: 680+ (minimum)
✓ Business credit: Established and positive payment history
✓ No recent bankruptcies or major delinquencies

Financial Requirements:
✓ Positive cash flow demonstrated
✓ Ability to service debt based on financial projections
✓ Reasonable debt-to-income ratios
✓ Sufficient collateral (real estate, equipment, business assets)

Owner Requirements:
✓ Owners with 20%+ equity must personally guarantee the loan
✓ Good character, management experience, and industry knowledge
✓ Sufficient personal liquidity for down payment and working capital

Specific Requirements by Loan Type:

SBA 7(a):

• 2+ years operating history strongly preferred

• Strong personal credit (680+)

• 10% down payment (existing businesses)

• Collateral coverage for loan amount

SBA 504:

• 2+ years operating history required

• Purchasing owner-occupied commercial real estate or major equipment

• Business must occupy at least 51% of the property

• Job creation or retention goals (typically 1 job per $65,000 of SBA funding)

SBA Express:

• Similar to 7(a) but more flexible on some criteria

• Faster documentation requirements

• May accept slightly lower credit scores depending on overall strength

The SBA Loan Application Process in Michigan

Step 1: Determine Your Financing Needs

Before applying for an SBA loan in Michigan, clarify:

• How much capital do you need? ($500K, $2M, $5M?)

• What will you use it for? (Real estate, equipment, acquisition, working capital?)

• What's your timeline? (Can you wait 60-90 days or do you need faster funding?)

• What's your business profile? (Revenue, profitability, credit strength?)

Step 2: Choose the Right SBA Program

Based on your needs:

• Buying commercial real estate or major equipment? → SBA 504

• Acquiring a business or need flexibility? → SBA 7(a)

• Need $500K or less with faster approval? → SBA Express

Step 3: Prepare Your Documentation

SBA lenders require comprehensive documentation:

Personal Documents:

• Personal financial statement

• Personal tax returns (3 years)

• Resume demonstrating industry experience

• Credit authorization forms

Business Documents:

• Business tax returns (3 years)

• Year-to-date financial statements (P&L, balance sheet)

• Business plan or expansion plan

• Legal documents (articles of incorporation, operating agreement)

• Business licenses and registrations

Transaction-Specific Documents:

• Real estate: Purchase agreement, appraisal, environmental report

• Equipment: Quotes, specifications, useful life documentation

• Acquisition: Purchase agreement, seller financials, valuation

Step 4: Work with an Experienced SBA Lender

Not all lenders are created equal when it comes to SBA loans. Working with an experienced SBA lender like LVRG Business Funding ensures:

✓ Faster processing (we know exactly what underwriters need)
✓ Higher approval rates (we structure deals properly from the start)
✓ Better terms (we leverage relationships with multiple SBA-approved lenders)
✓ Expert guidance (we've closed hundreds of SBA deals for Michigan businesses)

Step 5: Underwriting and Approval

Once your application is submitted:

• Lender reviews and underwrites the deal (2-4 weeks)

• SBA reviews and issues approval (2-4 weeks)

• Final documentation and closing (1-2 weeks)

Total Timeline:

• SBA 7(a) and 504: 60 to 90 days

• SBA Express: 10 to 14 days

Step 6: Closing and Funding

At closing, you'll:

• Sign loan documents

• Provide down payment funds

• Complete any final conditions

• Receive loan proceeds

SBA Loans vs. Conventional Business Loans: What's Better for Michigan Businesses?

INTEREST RATES:

• SBA Loans: 6% to 11%

• Conventional Loans: 8% to 15%

DOWN PAYMENT:

• SBA Loans: 10% to 15%

• Conventional Loans: 20% to 30%

LOAN TERMS:

• SBA Loans: Up to 25 years

• Conventional Loans: 5 to 15 years

APPROVAL TIMELINE:

• SBA Loans: 60 to 90 days

• Conventional Loans: 30 to 60 days

MAXIMUM AMOUNT:

• SBA Loans: $5M to $5.5M

• Conventional Loans: Varies widely

FLEXIBILITY:

• SBA Loans: High (7a), Limited (504)

• Conventional Loans: Varies by lender

CREDIT REQUIREMENTS:

• SBA Loans: 680+ preferred

• Conventional Loans: 700+ typically

USE RESTRICTIONS:

• SBA Loans: Some limitations

• Conventional Loans: Fewer limitations

When to Choose SBA:
✓ You want the lowest possible rates
✓ You need longer repayment terms
✓ You're purchasing commercial real estate
✓ You're acquiring an existing business
✓ You have time for 60-90 day approval process

When to Choose Conventional:
✓ You need funding in 30 days or less
✓ You have strong credit and financials (can get competitive rates)
✓ Your use of funds doesn't fit SBA guidelines
✓ You need maximum flexibility

Common SBA Loan Mistakes Michigan Business Owners Make

Mistake #1: Applying Without Adequate Preparation

The Problem: Incomplete applications cause delays and denials.
The Solution: Gather all documentation before starting the application.

Mistake #2: Underestimating Timeline

The Problem: Expecting funding in 30 days when it takes 60-90.
The Solution: Plan ahead. Start the SBA process 3-4 months before you need funds.

Mistake #3: Not Shopping Lenders

The Problem: Each SBA lender has different underwriting standards and timelines.
The Solution: Work with an experienced intermediary like LVRG who has relationships with multiple SBA lenders.

Mistake #4: Poor Credit Management During Process

The Problem: Applying for new credit cards or making large purchases while application is pending.
The Solution: Freeze all major financial changes until after closing.

Mistake #5: Inadequate Collateral Documentation

The Problem: Failing to properly value and document collateral.
The Solution: Get professional appraisals and organize ownership documentation early.

Why Michigan Businesses Choose LVRG for SBA Loans

20+ Years of SBA Loan Experience

We've facilitated SBA financing for Michigan businesses since 2003. We know the programs inside and out, and we've built relationships with the state's most active and efficient SBA lenders.

Institutional Banking Partnerships

We work with multiple SBA-approved lenders across Michigan and nationwide. This means:

• We can shop your deal to find the best fit

• We know which lenders approve which deal types fastest

• We leverage competition to get you better terms

White-Glove Service Throughout the Process

SBA loans involve complex documentation and multiple stakeholders (you, the lender, the SBA, attorneys, appraisers, etc.). We manage the entire process:

• One point of contact from application to funding

• Proactive communication at every stage

• Expert guidance on structuring and documentation

• Fast response times to keep deals moving

Michigan Expertise

We understand Michigan industries, Michigan real estate markets, and Michigan business challenges. Whether you're:

• A Detroit manufacturer expanding production capacity

• A Grand Rapids healthcare practice purchasing a medical building

• An Ann Arbor tech company acquiring a competitor

• A Lansing contractor buying heavy equipment

We've closed deals like yours before.

SBA Loan Success Stories: Michigan Businesses We've Helped

Manufacturing Expansion in Metro Detroit

Loan Type: SBA 504
Amount: $3,200,000
Use: Purchase of 45,000 sq ft manufacturing facility in Macomb County
Result: Company doubled production capacity and added 18 jobs

Restaurant Acquisition in Grand Rapids

Loan Type: SBA 7(a)
Amount: $875,000
Use: Acquisition of established restaurant with real estate
Result: Seamless ownership transition, business continues thriving under new ownership

Medical Equipment Purchase in Ann Arbor

Loan Type: SBA 504
Amount: $1,800,000
Use: Advanced diagnostic imaging equipment
Result: Practice expanded service offerings and patient capacity

Construction Equipment in Lansing

Loan Type: SBA Express
Amount: $425,000
Use: Excavation equipment purchase
Result: Fast 2-week approval enabled company to secure major contract

Geographic Coverage: SBA Loans Across Michigan

LVRG facilitates SBA loans for established businesses throughout Michigan:

Metro Detroit & Surrounding Areas

• Detroit SBA loans: Manufacturing, healthcare, technology, and service businesses

• Oakland County: Troy, Southfield, Farmington Hills, Novi, Birmingham

• Macomb County: Sterling Heights, Warren, Clinton Township, Shelby Township

• Wayne County: Dearborn, Livonia, Westland, Canton, Taylor

West Michigan

• Grand Rapids SBA loans: Kent County's largest city and economic hub

• Holland, Grand Haven, Muskegon: Lakeshore manufacturing and tourism businesses

Mid-Michigan

• Lansing SBA financing: State capital and government contractor hub

• Flint and Genesee County: Manufacturing and automotive supplier businesses

Southeast Michigan

• Ann Arbor SBA loans: Washtenaw County tech, healthcare, and university-adjacent businesses

• Jackson, Brighton, Howell: Growing communities with diverse business needs

Statewide Coverage

• Kalamazoo, Battle Creek, Portage: Southwest Michigan businesses

• Traverse City and Northern Michigan: Tourism, agriculture, and retail

• Saginaw, Bay City, Midland: Great Lakes Bay Region manufacturers

• Upper Peninsula: Mining, tourism, and forestry businesses

No matter where your Michigan business is located, LVRG can facilitate SBA financing.

Frequently Asked Questions About SBA Loans in Michigan

Q: How long does it take to get approved for an SBA loan in Michigan?
A: SBA 7(a) and 504 loans typically take 60 to 90 days from application to funding. SBA Express loans can fund in approximately 2 weeks.

Q: What credit score do I need for an SBA loan?
A: Most SBA lenders require a minimum personal credit score of 680, with 700+ preferred for larger loans. Strong business financials can sometimes compensate for slightly lower credit scores.

Q: Can startups get SBA loans?
A: It's difficult but not impossible. SBA strongly prefers businesses with 2+ years of operating history. Startups need exceptional credit, substantial industry experience, and significant personal investment.

Q: What can't SBA loans be used for?
A: SBA loans cannot be used for: speculative investments, passive income properties (non-owner-occupied real estate), refinancing existing SBA debt, or businesses engaged in certain restricted activities.

Q: Do I need collateral for an SBA loan?
A: Yes. SBA requires lenders to take collateral to the extent available. For real estate purchases, the property serves as primary collateral. For other uses, business assets and personal guarantees are typically required.

Q: Can I use an SBA loan to buy a franchise in Michigan?
A: Yes. SBA 7(a) loans are commonly used for franchise purchases. The franchise must be on the SBA's approved franchise list.

Q: What's the maximum SBA loan amount in Michigan?
A: SBA 7(a) maximum is $5,000,000. SBA 504 maximum is $5,500,000 (up to $16.5M for manufacturing or energy projects). SBA Express maximum is $500,000.

Q: Can I refinance existing debt with an SBA loan?
A: Yes, under certain circumstances. SBA 7(a) allows refinancing if it provides a substantial benefit (lower rates, better terms, consolidation). SBA 504 refinancing is more limited.

Q: Are there any fees for SBA loans?
A: Yes. SBA charges a guarantee fee (typically 2% to 3.5% of the guaranteed portion). Most lenders roll this into the loan amount rather than requiring upfront payment.

Q: How does LVRG get paid for facilitating SBA loans?
A: We're compensated by the lender upon successful closing. There's no cost to you for our services—we simply ensure your deal is structured properly and approved efficiently.

Ready to Apply for an SBA Loan in Michigan?

If you're an established Michigan business with strong financials and a clear growth plan, SBA financing could be the perfect solution for funding your expansion, equipment purchase, real estate acquisition, or business purchase.

LVRG Business Funding has facilitated hundreds of SBA loans for Michigan businesses over 20+ years. We know the programs, the lenders, and the process inside and out.

Contact LVRG for SBA Loan Assistance

Headquarters: Downtown Detroit, Michigan
Service Area: Statewide and nationwide
SBA Loan Range: $500,000 to $5,500,000

Apply Online: lvrgfunding.com/apply-now
Call Us: (855) 998-5874

Whether you're in Detroit, Grand Rapids, Ann Arbor, Lansing, or anywhere in Michigan, we're here to help you access SBA financing that fuels your growth.

About LVRG Business Funding

LVRG Business Funding is a Detroit-based boutique lender serving established businesses throughout Michigan and nationwide. For over 20 years, we've deployed more than $1 billion in strategic financing to 10,000+ companies.

We specialize in facilitating SBA 7(a), 504, and Express loans through our institutional banking partnerships. Our clients choose us for expert guidance, efficient processing, and white-glove service from application to funding.

Ready to explore SBA financing for your Michigan business? Apply today or call to speak with an SBA loan specialist.

Michigan Working Capital Loans: Fast Approval Guide for Small Businesses 2026

Table of Contents

1. Introduction: Why Michigan Businesses Need Working Capital

2. What is Working Capital and Why Does It Matter?

3. LVRG Express Working Capital Loans: $10K-$350K in 15-20 Days

4. Traditional Working Capital Loans: $50K-$5M

5. How to Qualify for Working Capital Loans in Michigan

6. The Application Process: Step-by-Step

7. Working Capital vs. Other Financing Options

8. Industry-Specific Working Capital Strategies

9. Common Working Capital Mistakes to Avoid

10. Working Capital Success Stories: Michigan Businesses

11. How to Calculate Your Working Capital Needs

12. Frequently Asked Questions

13. Apply for Working Capital Today

Introduction: Why Michigan Businesses Need Working Capital

Cash flow is the lifeblood of any business. You can have a full order book, loyal customers, and a great product—but without working capital, you can't pay suppliers, cover payroll, or seize growth opportunities.

Michigan businesses face unique cash flow challenges:

Manufacturing & Automotive Suppliers: 60-90 day payment terms from OEMs create massive cash flow gaps. You purchase raw materials and pay labor today, but don't get paid for 3 months. Working capital bridges this gap.

Construction Contractors: Material costs upfront, progress payments delayed, seasonal slowdowns in winter. Cash flow management is critical to survival and growth.

Restaurants & Hospitality: Seasonal fluctuations (tourist areas), inventory purchases, equipment repairs, slow winter months. Working capital smooths revenue volatility.

Retailers: Seasonal inventory purchases (Christmas, back-to-school), vendor payment terms, expansion opportunities. Working capital enables you to stock up without draining reserves.

Healthcare Practices: Insurance reimbursement delays (30-90 days), equipment purchases, expansion, new provider hiring. Working capital bridges the gap between providing care and getting paid.

The Cost of Being Undercapitalized

Lost Opportunities:

• Can't bid on large contracts (no proof of working capital)

• Miss bulk purchasing discounts (can't pay upfront)

• Lose customers to better-capitalized competitors

• Can't invest in marketing when ROI is clearest

Operational Stress:

• Juggling which bills to pay

• Vendor relationships strained (late payments)

• Can't hire needed staff

• Owner can't take salary

Growth Limitations:

• Can't expand when market conditions favor it

• Competitor captures your customers

• Miss acquisition opportunities

• Stuck in survival mode vs. growth mode

The Solution: Strategic working capital financing that keeps your business liquid, flexible, and ready for anything.

As Michigan's Business Loan Authority, LVRG has helped thousands of Michigan businesses solve cash flow challenges with working capital financing from $10,000 to $5,000,000. This guide shows you exactly how to access the working capital your business needs—fast.

What is Working Capital and Why Does It Matter?

Working Capital Definition

Working capital is the difference between your current assets (cash, accounts receivable, inventory) and current liabilities (accounts payable, short-term debt).

Formula: Working Capital = Current Assets - Current Liabilities

Example:

• Current Assets: $500,000 (cash $100K, A/R $300K, inventory $100K)

• Current Liabilities: $300,000 (A/P $200K, short-term debt $100K)

• Working Capital: $200,000

Why Working Capital Matters

1. Operational Flexibility With adequate working capital, you can:

• Pay bills on time (maintain vendor relationships)

• Take advantage of early payment discounts

• Purchase inventory when prices are favorable

• Cover payroll during slow periods

• Handle unexpected expenses without crisis

2. Growth Capability Working capital enables:

• Accepting larger orders

• Expanding to new locations

• Investing in marketing/sales

• Hiring key personnel ahead of revenue

• Purchasing equipment for capacity

3. Financial Health Signal Lenders, suppliers, and partners view working capital as a health metric:

• Positive working capital = healthy, stable business

• Negative working capital = potential distress

• Strong working capital = better credit terms from vendors

Working Capital Financing vs. Working Capital

Important Distinction:

Working Capital (the metric) = Your business's liquidity position

Working Capital Financing = Loans/funding to increase your working capital

When we talk about "working capital loans," we mean financing that increases your available cash to cover operational expenses, inventory, payroll, and growth initiatives.

Types of Working Capital Needs

1. Seasonal Working Capital

• Retailers building inventory before holidays

• Construction companies preparing for spring

• Tourism businesses preparing for summer

• Agricultural businesses during planting/harvest

2. Cyclical Working Capital

• Manufacturing responding to industry cycles

• Real estate dependent on market conditions

• Economic expansion/contraction impacts

3. Permanent Working Capital

• Base level needed year-round

• Covers minimum operational requirements

• Grows as business grows

4. Growth Working Capital

• Needed during expansion phases

• Hiring ahead of revenue

• New location launch costs

• Marketing investment before ROI

Michigan Context: Michigan businesses often need working capital for:

• Automotive supplier payment term gaps (60-90 days standard)

• Winter seasonal slowdowns (construction, tourism, retail)

• Manufacturing capacity expansion

• Equipment downtime/repairs

• Opportunity purchases (distressed inventory, competitor assets)

LVRG Express Working Capital Loans: $10K-$350K in 15-20 Days

LVRG Business Funding's Express Working Capital Loan Program is specifically designed for established small businesses that need fast access to capital without the lengthy bank loan process.

Program Overview

Loan Amounts: $10,000 to $350,000

Funding Speed: 15-20 business days average (fastest Michigan businesses can access institutional capital)

Repayment Terms: Up to 10 years available

Interest Rates: Competitive variable pricing based on creditworthiness

Collateral: Minimal collateral requirements (no personal collateral for qualifying businesses)

Credit Pull: No hard personal credit pull during application (protects your credit score)

Prepayment: No prepayment penalties (pay off early, save interest)

Who This Program Serves

Ideal for:

• Small businesses needing $10K-$350K

• Established companies (2+ years operating history)

• Business owners with 650+ credit score

• Companies needing fast funding (15-20 days)

• Businesses with proven cash flow

• Companies wanting flexible use of funds

Business Types: The Express program serves virtually all industries except those explicitly restricted (contact LVRG for industry-specific guidance). Common Michigan industries include:

• Professional Services (accounting, law, consulting)

• Healthcare (dental, veterinary, medical practices)

• Restaurants & Food Service

• Automotive Services

• Construction & Trades

• Technology & IT Services

• Retail & E-commerce

• Manufacturing (small to mid-size)

• Transportation & Logistics

• And many more

Qualification Requirements

Minimum Requirements:

Time in Business: 2+ years operating history required

• Shows business viability and stability

• Certain franchise concepts may have modified requirements

• Startups not eligible for Express program (see alternative options)

Personal Credit Score: Minimum FICO 650

• Score pulled from major bureaus (Experian, Equifax, TransUnion)

• Average of scores typically used

• Recent bankruptcies disqualify (7-year lookback)

Business Credit Score: Minimum SBSS 165

• Business credit score (not same as personal)

• Measures business payment history, trade lines

• Lower than personal credit acceptable

Debt Service Coverage: 1.25x minimum

• Formula: Net Operating Income ÷ Total Annual Debt Payments

• Must show 25% cushion to service new debt

• Conservative cash flow analysis

Current on Obligations: All debt current

• No late payments on business or personal debt

• Active collections or liens may disqualify

• Payment plans on old debt may be acceptable

Cash Flow: Demonstrated repayment capacity

• Based on bank statements and tax returns

• Lenders look at consistent deposits

• Seasonal businesses evaluated accordingly

What You Can Use Express Working Capital Loans For

Approved Uses (anything except commercial real estate):

Equipment Purchases: $10K-$350K

• Manufacturing equipment

• Restaurant kitchen equipment

• Medical/dental equipment

• Construction equipment (under $350K)

• Technology/computers

• Vehicles for business use

Working Capital & Cash Flow:

• Cover payroll during slow periods

• Purchase inventory

• Pay suppliers/vendors

• Manage seasonal fluctuations

• Bridge payment term gaps

Business Expansion:

• Open second location

• Add new product lines

• Enter new markets

• Hire key personnel

• Expand capacity

Leasehold Improvements: Up to $350K

• Renovate existing space

• Build-out new location

• Update facilities

• ADA compliance

• Technology infrastructure

Debt Refinancing:

• Consolidate high-interest debt

• Refinance merchant cash advances

• Simplify multiple payments into one

• Reduce monthly payment burden

• Improve cash flow immediately

Business Acquisitions: (restrictions apply)

• Purchase competitor

• Buy out partner

• Acquire assets from closing business

• Roll-up strategy (multiple small acquisitions)

Inventory & Supplies:

• Stock up for peak season

• Take advantage of bulk discounts

• New product launch inventory

• Vendor minimum orders

Marketing & Advertising:

• Digital marketing campaigns

• Website development

• Brand development

• Trade show participation

• Sales team expansion

Technology Upgrades:

• New software/SaaS subscriptions

• Hardware upgrades

• Cybersecurity improvements

• Automation systems

• CRM/ERP implementation

NOT Approved For:

• Commercial real estate purchase (use Commercial Real Estate Financing instead)

• Speculative investments

• Personal use

• Paying off personal debt

Documentation Requirements

LVRG keeps documentation simple and streamlined:

Required Documents:

1. Completed LVRG Application

• Online form at LVRGFunding.com/apply-now

• Takes 5-10 minutes

• No hard credit pull at application stage

2. Business Bank Statements (3 months)

• Most recent 3 consecutive months

• All business accounts

• Shows cash flow patterns and deposits

• Used to verify revenue and cash management

3. Business Tax Returns (3 years)

• Last 3 years filed returns

• Personal returns of 20%+ owners

• Shows profitability and income trends

• Debt schedule reconciliation

4. Current Financial Statements (within 90 days)

• Profit & Loss (P&L) statement

• Balance Sheet

• Can be internally prepared (don't need CPA)

• Shows current business performance

5. Business Debt Schedule

• List of all current business loans/debts

• Payment amounts, balances, lenders

• Used to calculate debt service coverage

• Include leases, lines of credit, credit cards

6. Affiliate Analysis (if applicable)

• Other businesses owned by principals

• Related companies

• Determines if affiliates guarantee debt

That's it. No business plan required. No projections. No excessive documentation. LVRG focuses on actual business performance, not hypotheticals.

Pricing & Terms

Interest Rates: Competitive variable pricing based on:

• Credit score (personal and business)

• Time in business

• Industry

• Debt service coverage ratio

• Loan amount

• Collateral (if any)

Typical Range: 8%-18% depending on risk profile

• Stronger businesses = lower rates

• Higher risk = higher rates

• Rate locked at closing

Loan Terms:

• Short-term: 1-3 years

• Medium-term: 3-5 years

• Long-term: 5-10 years

Monthly Payments:

• Fixed monthly payment amount

• Principal + interest

• Autopay available (recommended)

• No prepayment penalty (pay off early)

Fees:

• Origination fee (1-5% of loan amount typical)

• No hidden fees

• No ongoing maintenance fees

• All fees disclosed upfront before signing

Speed Advantage: 15-20 Days vs. 90+ Days at Banks

LVRG Express Timeline:

• Day 1: Apply online (5-10 minutes)

• Day 2-3: LVRG advisor contact, document request

• Day 7-10: Documents submitted, underwriting begins

• Day 12-15: Credit decision, approval, terms presented

• Day 15-20: Closing, funding wired to your account

Bank Timeline (typical):

• Week 1: Apply, wait for loan officer assignment

• Week 2-3: Initial documentation request

• Week 4-6: Additional documentation requests

• Week 7-9: Underwriting review

• Week 10-12: Committee approval required

• Week 13+: Closing process begins

• 90-120+ days total (if approved)

Why LVRG is Faster:

1. Dedicated underwriters (not juggling 100+ loans)

2. Clear documentation requirements (know what's needed upfront)

3. Decision authority (no committee approval needed)

4. Digital process (no paper shuffling)

5. Experienced team (20+ years, seen every situation)

Express Program Success Stories

Detroit Auto Supplier - $175,000 Challenge: Needed to purchase raw materials for large GM contract. 60-day payment terms from GM created cash flow gap. Bank said 8-12 weeks minimum.

Solution: LVRG Express Working Capital Loan $175,000, funded in 18 days.

Result: Fulfilled GM contract on time, hired 3 additional workers, revenue up 40% that quarter. Repaid loan in 2 years, now maintains revolving relationship with LVRG.

Grand Rapids Restaurant - $85,000 Challenge: Walk-in cooler died during peak summer season. Without replacement, couldn't operate. Bank loan would take months. Considering merchant cash advance (expensive).

Solution: LVRG Express $85,000 funded in 14 days.

Result: New commercial kitchen equipment installed, expanded menu capacity, revenue up 25%. Avoided expensive MCA that would have drained cash flow.

Ann Arbor Medical Practice - $250,000 Challenge: Opportunity to acquire retiring doctor's practice and patient base. Needed funding quickly before another buyer stepped in.

Solution: LVRG Express $250,000 funded in 19 days.

Result: Acquired practice, integrated 600 patients, hired existing staff, increased revenue 60% within 6 months.

Traditional Working Capital Loans: $50K-$5M

For businesses needing larger amounts than the Express program provides, LVRG offers traditional working capital financing from $50,000 to $5,000,000.

Program Overview

Loan Amounts: $50,000 to $5,000,000

Funding Speed: 3-6 weeks typical (depending on complexity and amount)

Repayment Terms: 1-10 years depending on use and amount

Interest Rates: Competitive rates based on risk profile

Structure: Term loans, revenue-based financing, or SBA loans

Traditional Working Capital vs. Express

Choose Traditional Working Capital When:

• You need more than $350,000

• You're willing to wait 3-6 weeks for funding

• You want to explore multiple financing structures

• You may need SBA loan (better rates, longer terms)

• Larger strategic investment or acquisition

Choose Express When:

• You need $10K-$350K

• Speed is critical (need funds in 15-20 days)

• Straightforward working capital need

• Want simple, fast process

Traditional Working Capital Structures

1. Term Loans ($50K-$5M)

How It Works:

• Receive lump sum

• Fixed monthly payments

• Set repayment schedule

• Interest + principal each month

Best For:

• Specific investment with clear ROI

• Equipment purchases over $350K

• Business acquisitions

• Major expansion projects

• Debt consolidation/refinancing

Typical Terms:

• 2-7 years

• Monthly payments

• Fixed or variable interest

• May require collateral (equipment, real estate, A/R)

2. Revenue-Based Financing ($50K-$1M)

How It Works:

• Receive lump sum

• Repay as percentage of daily/weekly/monthly revenue

• Payments flex with sales (more sales = higher payment, less sales = lower payment)

• No fixed monthly obligation

Best For:

• Seasonal businesses

• Businesses with variable monthly revenue

• Retailers, restaurants, service businesses

• Companies wanting payment flexibility

Typical Structure:

• 3-12 month terms

• 5-15% of monthly revenue until repaid

• Factor rate 1.15-1.35 (borrow $100K, repay $115K-$135K)

• No personal collateral typically

3. SBA Loans ($150K-$5M)

How It Works:

• Government-guaranteed loan

• Processed through LVRG's SBALoansMichigan.com platform

• Access to 25+ elite SBA lenders

• Best rates and longest terms available

Best For:

• Businesses wanting lowest rates

• Longer-term financing (10+ years)

• Large working capital needs

• Business acquisitions

• Real estate + working capital combined

Typical Terms:

• Up to $5 million

• 10-25 year terms

• Interest rates: Prime + 2-3%

• Requires more documentation

• 6-8 week process through LVRG

Learn more: Visit SBALoansMichigan.com for detailed SBA loan information

Qualification for Traditional Working Capital

More Flexible Than Express:

• May accept businesses with 600+ credit (vs. 650+ for Express)

• Startups may qualify (franchise concepts, certain industries)

• Higher debt loads acceptable (with strong cash flow)

• Broader industry acceptance

More Rigorous Documentation:

• Business plan may be required for $1M+

• Detailed financial projections

• More extensive due diligence

• Collateral analysis if secured loan

Industries LVRG Serves - Traditional Working Capital

LVRG Business Funding has deep expertise financing Michigan businesses across industries:

Manufacturing & Industrial:

• Automotive suppliers (Tier 1, 2, 3)

• Metal fabrication

• Plastics & injection molding

• CNC machining

• Food processing

• Industrial distribution

Construction & Trades:

• General contractors

• Specialty contractors (HVAC, electrical, plumbing)

• Excavation & site work

• Restoration & remediation

• Commercial construction

• Residential construction

Healthcare & Medical:

• Dental practices

• Veterinary clinics

• Medical practices (primary care, specialty)

• Home healthcare agencies

• Pharmacies

• Medical device distribution

Professional Services:

• Accounting & tax preparation

• Law firms

• Consulting firms

• Marketing agencies

• IT services & managed service providers

• Engineering firms

Food & Hospitality:

• Restaurants (franchise and independent)

• Catering companies

• Bars & breweries

• Hotels & motels

• Food distribution

Retail & E-commerce:

• Brick-and-mortar retail

• E-commerce

• Specialty retail

• Franchise retail concepts

• Wholesale distribution

Technology & Communications:

• Software companies (SaaS with recurring revenue)

• IT services

• Telecommunications

• Managed service providers

• Cybersecurity firms

Transportation & Logistics:

• Trucking companies

• Freight forwarding

• Warehousing & distribution

• Last-mile delivery

• Fleet services

And Many More:

• Agriculture operations

• Fitness centers & gyms

• Funeral homes

• Government contractors

• Property management

• Self-storage facilities

• Auto dealerships (certain types)

Restricted Industries: Most businesses qualify. However, certain industries have restrictions:

• Adult entertainment

• Cannabis (still federally illegal)

• Gambling

• Speculative real estate

• Passive income businesses

Contact LVRG to discuss your specific industry and eligibility.

How to Qualify for Working Capital Loans in Michigan

Understanding qualification criteria helps you prepare and choose the right financing option.

Credit Score Requirements

Personal Credit (FICO):

Express Working Capital:

• Minimum: 650 FICO

• Preferred: 680+

• Excellent: 720+

Traditional Working Capital:

• Minimum: 600 FICO (some programs)

• Preferred: 650+

• Excellent: 700+

What Affects Your Credit Score:

• Payment history (35% of score) - most important

• Credit utilization (30%) - keep under 30%

• Length of credit history (15%)

• Credit mix (10%)

• New credit inquiries (10%)

Improving Your Credit Before Applying:

• Pay all bills on time for 6+ months

• Pay down credit card balances (below 30% utilization)

• Fix any errors on credit report

• Don't close old accounts (hurts length of history)

• Avoid new credit applications before applying

Business Credit (SBSS, Dun & Bradstreet):

Express Working Capital:

• Minimum: SBSS 165

• Preferred: SBSS 180+

What is SBSS? Small Business Scoring Service - business credit score that measures:

• Payment history to vendors/suppliers

• Business credit utilization

• Public records (liens, judgments)

• Company size and industry

How to Build Business Credit:

• Get business credit cards, use responsibly

• Establish trade lines with vendors (pay on time)

• Register with Dun & Bradstreet

• Keep business and personal finances separate

• Pay business debts before due date when possible

Time in Business

Express Working Capital:

• Minimum: 2 years operating history

• Calculated from date business started operations (not incorporation date)

• Some franchise concepts may have modified requirements

Traditional Working Capital:

• Minimum: Varies by program (some accept 1+ years)

• Startups may qualify for certain franchise concepts

• Veterinary and dental practices have special consideration

• Longer track record = better rates and terms

Why Lenders Care About Time in Business:

• Survival rate: Most business failures happen in first 2 years

• Track record: Demonstrates ability to generate revenue and manage operations

• Financial history: More data to analyze = more confidence

Revenue Requirements

Express Working Capital:

• Typical minimum: $300,000+ annual revenue

• Some industries may have higher requirements

• Consistent revenue more important than amount

Traditional Working Capital:

• Varies widely by program and loan size

• Larger loans require larger revenue base

• SBA loans: typically $250K+ annual revenue

• Revenue-based financing: $500K+ annual revenue preferred

Revenue Verification:

• Bank statements (primary verification)

• Tax returns (IRS-filed confirmation)

• P&L statements (current year performance)

Profitability & Cash Flow

Profitability: Lenders prefer profitable businesses, but break-even or slight losses may be acceptable if:

• Clear path to profitability demonstrated

• Strong cash flow despite paper losses (depreciation, etc.)

• Owners taking below-market salaries (add-back available)

Debt Service Coverage Ratio (DSCR):

Formula: Net Operating Income ÷ Annual Debt Payments

Minimum: 1.25x (Express and most programs) Preferred: 1.50x or higher

Example:

• Net Operating Income: $250,000/year

• Existing Debt Payments: $100,000/year

• New Loan Payment: $50,000/year

• Total Debt Payments: $150,000/year

• DSCR: $250,000 ÷ $150,000 = 1.67x ✓ Qualifies

Cash Flow Analysis: Lenders review bank statements to verify:

• Consistent deposits (revenue)

• Adequate ending balances

• No excessive NSF/overdrafts

• Seasonality patterns (if applicable)

• Owner withdrawals (reasonable)

Collateral Requirements

Express Working Capital:

• Minimal collateral requirements

• No personal collateral for qualifying businesses

• Business assets may be pledged (UCC filing)

• Personal guarantee required

Traditional Working Capital: Varies by loan size and structure:

Unsecured ($50K-$250K):

• No collateral required

• Personal guarantee required

• Based on credit and cash flow

Secured ($250K+):

• Equipment (if purchasing equipment)

• Accounts receivable

• Inventory

• Real estate (if owned)

• Personal assets (for larger amounts)

What is a Personal Guarantee? Legal agreement that you (the business owner) are personally liable for the debt if the business cannot pay. Standard for virtually all small business loans.

Industry-Specific Considerations

Michigan Automotive Suppliers:

• Lenders understand 60-90 day OEM payment terms

• Strong contracts with Ford, GM, Stellantis strengthen application

• IATF 16949 certification viewed positively

• Diversification across multiple OEMs preferred

Michigan Manufacturers:

• Equipment serves as strong collateral

• Long-term customer relationships valued

• Capacity utilization important (operating at 60%+ good sign)

• Skilled labor availability considered

Construction Contractors:

• Seasonal cash flow understood and modeled

• Bonding capacity important

• Project pipeline considered

• Owner experience in industry critical

Restaurants:

• Higher risk profile (more scrutiny)

• Franchise concepts easier to finance

• Location and concept matter

• Sales validation (POS data) helpful

Healthcare Practices:

• Insurance reimbursement patterns understood

• Payer mix analyzed

• License verification required

• Malpractice insurance required

Geographic Considerations

LVRG Serves All Michigan:

• Metro Detroit (Wayne, Oakland, Macomb counties)

• Grand Rapids & West Michigan

• Ann Arbor & Washtenaw County

• Lansing & Mid-Michigan

• Flint & Genesee County

• Upper Peninsula

• Traverse City & Northern Michigan

• Everywhere in between

No geographic restrictions. Whether your business is in downtown Detroit or rural Upper Peninsula, same programs available.

Michigan Advantage: Being Michigan-based, LVRG understands:

• Michigan economy and industries

• Automotive supply chain dynamics

• Seasonal business patterns (winter impacts)

• Great Lakes shipping and logistics

• Regional economic differences (Detroit vs. Grand Rapids vs. Outstate)

The Application Process: Step-by-Step

LVRG makes applying for working capital simple and transparent.

Step 1: Determine Your Needs

Before Applying, Answer:

How much do you need?

• Be specific (don't just guess)

• Add 15-20% buffer for unexpected costs

• Consider: equipment cost + installation + training + working capital during transition

What will you use it for?

• Specific, clear use of funds

• ROI justification (how will this make/save money?)

• Timeline for deployment

How quickly do you need it?

• Emergency (days): May need merchant cash advance (expensive)

• Urgent (2-3 weeks): Express Working Capital ideal

• Normal (4-8 weeks): Traditional Working Capital or SBA

Can you afford the payment?

• Conservative cash flow projection

• Account for seasonality

• 1.25x DSCR minimum (prefer 1.5x+)

Do you meet minimum qualifications?

• Credit score 650+ (Express) or 600+ (Traditional)

• 2+ years in business (Express) or 1+ (Traditional)

• Revenue sufficient for loan size

• Current on all obligations

Step 2: Apply Online

LVRGFunding.com/apply-now

Application Takes 5-10 Minutes:

• Business information (name, industry, location, time in business)

• Owner information (name, ownership %, SSN for soft credit check)

• Loan request (amount, use of funds)

• Financial snapshot (annual revenue, estimated credit score)

• Contact information (phone, email)

No Hard Credit Pull: LVRG does soft inquiry only at application stage. Your credit score is NOT impacted. Hard inquiry only if/when you decide to move forward.

Immediate Confirmation: You'll receive email confirmation immediately. LVRG advisor will contact you within 1 business day (usually same day).

Step 3: Initial Consultation

LVRG Advisor Contact: Within 1 business day, experienced LVRG funding advisor contacts you:

• Discuss your business and financing needs

• Explain options (Express vs. Traditional, loan structures)

• Answer questions about process, timeline, terms

• Request initial documentation

No Pressure: LVRG's consultation is educational and advisory. We help you understand options and make informed decisions. No high-pressure sales tactics. If working capital financing isn't right fit, we'll tell you honestly.

Step 4: Document Submission

Document Checklist (Express Working Capital):

□ Business bank statements (3 months) □ Business tax returns (3 years) □ Personal tax returns of 20%+ owners (3 years) □ Current P&L statement (within 90 days) □ Current balance sheet (within 90 days) □ Business debt schedule □ Affiliate analysis (if applicable)

How to Submit:

• Secure online portal link provided

• Upload documents (PDF format preferred)

• LVRG advisor assists if you have questions

Tips for Faster Processing:

• Organize documents in advance

• Label files clearly (2023_Business_Tax_Return.pdf)

• Ensure all pages included and readable

• Provide complete information (don't leave blanks)

Step 5: Underwriting & Credit Decision

What Happens During Underwriting:

Document Review:

• Verify information accuracy

• Reconcile tax returns to bank statements

• Analyze cash flow patterns and trends

• Calculate debt service coverage ratio

Credit Analysis:

• Pull business and personal credit reports

• Review payment history and derogatory items

• Assess credit utilization and available credit

• Understand any credit issues (you'll have chance to explain)

Risk Assessment:

• Industry analysis (is industry stable/growing?)

• Business model evaluation

• Competitive position assessment

• Management experience and capability

Collateral Evaluation (if applicable):

• Equipment appraisal or valuation

• Real estate appraisal (if securing loan with property)

• A/R aging report analysis

• Inventory valuation

Timeline:

• Express: 5-7 business days for credit decision

• Traditional: 2-3 weeks depending on complexity

Step 6: Approval & Term Sheet

If Approved: You'll receive detailed term sheet outlining:

Loan Amount: Approved funding amount Interest Rate: Annual percentage rate Repayment Term: Length of loan (months/years) Monthly Payment: Principal + interest amount Collateral: What (if anything) secures the loan Personal Guarantee: Who signs (all 20%+ owners typically) Fees: Origination fee and any other costs Prepayment: Terms for paying off early Conditions: Any requirements before closing (insurance, etc.)

Review Carefully:

• Read everything

• Ask questions about anything unclear

• Understand total cost of financing

• Verify payment fits your budget

• Check prepayment penalty (LVRG has none on Express)

Negotiation: Some terms may be negotiable:

• Interest rate (if stronger guarantor or collateral)

• Loan amount (if need less/more)

• Repayment term (longer = lower payment but more interest)

Decline to Proceed: If terms don't work for you, no obligation to proceed. LVRG respects your decision and maintains relationship for future needs.

Step 7: Closing Process

If You Accept Terms:

Closing Documents Prepared:

• Promissory note (your promise to repay)

• Security agreement (if secured loan)

• Personal guarantee

• Corporate resolution (board approval of loan)

• ACH authorization (for payments)

• UCC-1 filing (if secured)

Document Review:

• LVRG sends closing docs electronically (DocuSign)

• Review carefully before signing

• Ask questions if anything unclear

• May want attorney review for large loans ($500K+)

Conditions Cleared:

• Proof of insurance (hazard, liability, life insurance sometimes)

• Vendor invoices (if financing specific purchase)

• Any other conditions from approval

Signing:

• Electronic signature through secure platform

• All guarantors must sign

• Takes 15-30 minutes typically

• Can be done from anywhere (phone, computer)

Timeline:

• Express: Close within 2-3 days of acceptance

• Traditional: Close within 1 week of acceptance

Step 8: Funding

Wire Transfer: Once all documents signed and conditions cleared:

• LVRG wires funds to your business bank account

• Usually same day or next business day after closing

• No delays, no excuses

Funding Amount:

• Loan amount minus any fees withheld

• Example: $100,000 loan, 3% origination fee = $97,000 wired to you

Confirmation:

• Email confirmation when wire sent

• Typically hits account same day

• Confirm receipt with your bank

Post-Funding:

• LVRG sets up loan servicing account (online access)

• First payment date communicated (typically 30 days from funding)

• Autopay setup recommended

• Ongoing support from LVRG team

Total Timeline Summary

LVRG Express Working Capital:

• Day 1: Apply online

• Day 2: LVRG contact, document request

• Day 7: Documents submitted

• Day 12: Credit decision, approval

• Day 15: Closing

• Day 17: Funding

• Total: 15-20 business days

Traditional Working Capital:

• Week 1: Apply, consultation, document request

• Week 2-3: Documents submitted, underwriting

• Week 4: Credit decision, approval, term sheet

• Week 5: Closing process

• Week 6: Funding

• Total: 4-6 weeks

Compare to Banks:

• 90-120+ days (and that's if approved)

Working Capital vs. Other Financing Options

Understanding alternatives helps you choose the best fit.

Working Capital Loan vs. Line of Credit

Working Capital Term Loan:

• Lump sum received upfront

• Fixed monthly payment

• Set repayment schedule

• Interest on full amount from day one

• Pay off early without penalty (LVRG)

Line of Credit:

• Draw as needed (up to limit)

• Interest only on drawn amount

• Revolving (pay down, draw again)

• Ongoing access to capital

• Annual renewal typically

When to Choose Working Capital Loan:

• One-time specific need (equipment, inventory, acquisition)

• Want fixed payment for budgeting

• Don't need ongoing access

• Lower interest rate than line of credit

When to Choose Line of Credit:

• Ongoing working capital needs

• Seasonal fluctuations

• Want flexibility to draw as needed

• Pay interest only on what you use

LVRG Position: LVRG does not currently offer traditional lines of credit. We focus on term loans (working capital, equipment, SBA) where we can provide better rates and terms than revolving credit lines.

Alternative: Revenue-based financing provides similar flexibility to line of credit (payments adjust with revenue).

Working Capital vs. SBA Loan

Working Capital Loan (LVRG Express or Traditional):

• Faster approval (15-20 days Express, 4-6 weeks Traditional)

• Less documentation

• More flexible use of funds

• Higher interest rates than SBA

• Shorter terms typically

SBA Loan (via SBALoansMichigan.com):

• Longer approval (6-8 weeks with LVRG, 90-120+ days direct to bank)

• More documentation required

• Specific use restrictions

• Lower interest rates (Prime + 2-3%)

• Longer terms (up to 10-25 years)

• Lower down payment for real estate (10% vs. 20-30%)

When to Choose Working Capital:

• Need money in 2-4 weeks

• Loan amount under $350K

• Want simple documentation process

• Use of funds doesn't fit SBA restrictions

When to Choose SBA:

• Large amount ($500K+)

• Want lowest possible rate

• Buying real estate or business

• Can wait 6-8 weeks (through LVRG)

• Want 10-25 year term

Can Be Combined: Many businesses use LVRG working capital for immediate needs, then later use SBA loan for larger strategic investments.

Learn More About SBA Loans: Visit SBALoansMichigan.com for complete SBA loan guide.

Working Capital vs. Equipment Financing

Working Capital Loan:

• Use for anything (equipment, inventory, payroll, etc.)

• Not secured by specific equipment

• May have higher rate if unsecured

• Flexible deployment

Equipment Financing:

• Specific to equipment purchase

• Equipment serves as collateral

• Lower interest rate (secured)

• Terms match equipment life (5-7 years typical)

• May finance 100% of equipment cost

When to Choose Working Capital:

• Buying equipment PLUS need working capital

• Equipment under $50K

• Want flexibility in deployment

• Used equipment with limited value

When to Choose Equipment Financing:

• Buying equipment $100K+ (LVRG specializes in $100K-$50M equipment financing)

• Want lowest rate (equipment as collateral)

• Equipment has strong resale value

• Financing 100% of cost

Can Be Combined: Finance equipment separately (equipment financing), use working capital for installation, training, and operational costs during transition.

LVRG Equipment Financing: For equipment needs $100K+, LVRG has specialized equipment financing division. Contact us for details.

Working Capital vs. Merchant Cash Advance (MCA)

Working Capital Loan (LVRG):

• Structured as loan (regulated)

• Interest rate disclosed (APR)

• Fixed or variable monthly payment

• Repayment term specified

• Reasonable cost (8-18% typically)

• No daily ACH

Merchant Cash Advance:

• NOT a loan (unregulated)

• Factor rate, not interest rate

• Daily ACH from business account

• Repaid via % of credit card sales or daily ACH

• VERY EXPENSIVE (40-80% APR equivalent)

• Can trap businesses in cycle

When to Consider MCA:

• Absolute emergency (equipment breakdown, can't operate without immediate fix)

• Horrible credit (500s)

• Can't qualify for anything else

• Can repay in 3-4 months maximum

Why MCAs Are Dangerous:

• Daily ACH drains cash flow

• Very expensive (businesses often pay back 1.3-1.5x in 6-9 months)

• Renewal trap (need another MCA to pay first one)

• Can lead to business failure

LVRG's Position: We do NOT offer merchant cash advances. We believe they're predatory and harmful to businesses. If you currently have an MCA, LVRG can help you refinance it into a more affordable working capital loan (debt consolidation is approved use).

Better Alternative: LVRG Express Working Capital funds in 15-20 days at reasonable rates. Plan ahead—don't wait until it's emergency and MCA is only option.

Working Capital vs. Revenue-Based Financing

Traditional Working Capital Loan:

• Fixed monthly payment

• Predictable schedule

• Works for stable cash flow businesses

• Lower cost typically

Revenue-Based Financing:

• Payment is % of monthly revenue

• Payments flex with sales (more sales = higher payment, less sales = lower payment)

• No fixed monthly obligation

• Higher cost than fixed payment loan

• Great for seasonal businesses

When to Choose Revenue-Based:

• Seasonal business (tourism, retail, construction)

• Variable monthly revenue

• Want payment protection (if sales slow, payment slows)

• Growing fast (expect revenue to increase significantly)

When to Choose Traditional Working Capital:

• Stable, predictable revenue

• Want lowest cost

• Fixed payment easier for budgeting

LVRG Offers Both: We can structure either fixed payment working capital or revenue-based financing. Your advisor will help determine which fits your business best.

Industry-Specific Working Capital Strategies

Michigan's diverse economy requires specialized approaches by industry.

Manufacturing & Automotive Suppliers

Unique Cash Flow Challenge: 60-90 day payment terms from OEMs (Ford, GM, Stellantis, etc.) create massive cash flow gaps. You buy raw materials and pay labor today, but don't get paid for 2-3 months.

Working Capital Solution:

Accounts Receivable Bridge Financing:

• Borrow against open invoices

• Receive cash immediately instead of waiting 60-90 days

• Repay when customer pays invoice

• Typical advance rate: 80-85% of invoice value

Inventory Financing:

• Finance raw material purchases

• Especially useful for large orders

• Repay when product ships and invoice paid

• Enables accepting larger contracts

Equipment + Working Capital Combined:

• Finance new machinery (equipment loan)

• Include working capital for materials during ramp-up

• Gives you full solution for capacity expansion

Example Structure: Sterling Heights automotive supplier needs to expand capacity for new EV component contract:

• Equipment financing: $800,000 (CNC machines, robotics)

• Working capital: $300,000 (raw materials, labor during ramp-up)

• Total package: $1,100,000

• Timeline: 4-6 weeks

• Payment structured with 3-month interest-only period during installation

LVRG's Automotive Industry Expertise:

• Understand OEM payment terms (not surprised by 60-90 days)

• Value contracts with Ford, GM, Stellantis appropriately

• Know IATF 16949 certification significance

• Deep relationships with Michigan automotive lenders

• Closed hundreds of deals for automotive suppliers

Construction & Trades

Unique Cash Flow Challenge:

• Material costs upfront (supplier COD or 30-day terms)

• Labor costs continuous (weekly payroll)

• Progress payments delayed (30-60 days)

• Winter seasonal slowdown (Michigan-specific)

• Bonding requirements tie up capital

Working Capital Solution:

Seasonal Working Capital:

• Larger line in spring/summer (busy season)

• Smaller payment in winter (slow season)

• Structured to match construction seasonality

• Revolving structure (pay down in busy months, draw in slow months)

Project-Based Financing:

• Finance materials and labor for specific large project

• Repay from progress payments

• Enables bidding on larger contracts

• Shows GC you have financial capacity

Equipment + Working Capital:

• Finance equipment (excavator, dump truck, etc.)

• Include working capital for operational costs

• Total solution for capacity expansion

Example Structure: Lansing general contractor winning $2M commercial project:

• Equipment: $400,000 (new excavator, trucks)

• Working capital: $300,000 (materials, subs, payroll)

• Total: $700,000

• Structured with milestone draws (like GC will pay contractor)

• Repaid over 3 years after project completion

LVRG's Construction Industry Expertise:

• Understand seasonal cash flow (not surprised by winter slowdown)

• Value bonding capacity

• Appreciate project pipeline and backlog

• Know Michigan contractors face (cold weather impacts)

• Experience with Davis-Bacon wage requirements (government contracts)

Healthcare & Medical Practices

Unique Cash Flow Challenge:

• Insurance reimbursement delays (30-90 days)

• High upfront equipment costs (medical/dental equipment expensive)

• Staff expansion needed before revenue grows

• Credentialing delays for new providers

• Regulatory compliance costs

Working Capital Solution:

Accounts Receivable Financing:

• Borrow against outstanding insurance claims

• Get paid immediately instead of waiting months

• Typical advance: 80% of approved claims value

Equipment + Working Capital:

• Finance medical/dental equipment

• Include working capital for staffing during patient ramp-up

• Enables practice expansion or associate hire

Practice Acquisition Financing:

• SBA loan for practice purchase (via SBALoansMichigan.com)

• Working capital for patient integration and transition costs

• Total solution for practice growth through acquisition

Example Structure: Ann Arbor dental practice expanding with associate dentist:

• Equipment: $250,000 (digital x-ray, chairs, operatory build-out)

• Working capital: $100,000 (associate salary, marketing, patient ramp-up)

• Total: $350,000

• 7-year term

• Payment structured knowing insurance reimbursement cycles

LVRG's Healthcare Industry Expertise:

• Understand insurance reimbursement timelines

• Know equipment holds value well (good collateral)

• Appreciate licensing and credentialing delays

• Experience with dental, veterinary, medical practices

• Relationships with healthcare-focused lenders

Restaurants & Food Service

Unique Cash Flow Challenge:

• High upfront build-out costs

• Seasonal fluctuations (winter slow in many Michigan markets)

• Equipment breakdowns can shut down operations

• Thin margins (10-15% profit typical)

• High competition and failure rate

Working Capital Solution:

Equipment Emergency Financing:

• Walk-in cooler fails? Need replacement immediately

• Express working capital funds in 15-20 days

• Avoid expensive MCA options

• Get back to operating quickly

Seasonal Working Capital:

• Build inventory and staff for summer (tourism areas)

• Revenue-based financing (payments lower in slow winter months)

• Bridge winter cash flow gap

• Prepay for spring without draining reserves

Expansion/Second Location:

• Working capital for buildout, equipment, inventory

• Traditional 4-6 week timeline

• May combine with SBA loan for larger expansion

Example Structure: Traverse City restaurant in tourist area:

• Revenue-based financing: $150,000

• Use: Winter inventory, marketing, staff retention

• Repayment: 10% of monthly revenue

• Winter months (Nov-March): $3,000-$5,000/month payment

• Summer months (June-Aug): $15,000-$20,000/month payment

• Self-adjusting to seasonal revenue pattern

LVRG's Restaurant Industry Expertise:

• Understand seasonality (especially tourist areas)

• Know equipment financing critical

• Appreciate thin margins

• Experience with franchise and independent concepts

• Realistic about risks (restaurants are higher risk)

Retail & E-commerce

Unique Cash Flow Challenge:

• Seasonal inventory purchases (Christmas, back-to-school)

• Vendor payment terms (often COD or short terms)

• E-commerce: cash tied up in inventory for months

• Brick-and-mortar: high occupancy costs

• Omnichannel complexity (online + physical)

Working Capital Solution:

Seasonal Inventory Financing:

• Finance large inventory purchases (Oct-Nov for Christmas)

• Repay from holiday sales (Dec-Jan)

• Enables stocking up without draining cash

• Can take early-pay discounts from vendors

E-commerce Growth Capital:

• Finance inventory for product launches

• Marketing/advertising spend (FB ads, Google ads)

• Amazon FBA inventory financing

• Repay as inventory sells

Retail Expansion:

• Second location build-out

• Inventory for new location

• Working capital during ramp-up period

Example Structure: Grand Rapids e-commerce retailer (Michigan-made products):

• Working capital: $200,000

• Use: Inventory purchase for Q4 holiday season

• Timeline: Funded in September, repaid by February

• Structured knowing 60% of annual sales occur Oct-Dec

• Can reapply for next year's season

LVRG's Retail Industry Expertise:

• Understand seasonal patterns

• Know inventory financing critical

• Appreciate online vs. brick-and-mortar differences

• Experience with Michigan retailers across categories

• Realistic underwriting of retail risk

Professional Services

Unique Cash Flow Challenge:

• Staff expansion needed before revenue grows

• Large contracts require upfront investment (hiring, systems)

• Government contracts have long payment terms (60-90 days)

• Technology investments needed (CRM, project management, etc.)

• Business development costs (marketing, sales staff)

Working Capital Solution:

Growth Capital for Staffing:

• Finance hiring of key personnel ahead of revenue

• Gives runway for BD and revenue ramp

• Invest in sales/marketing to grow client base

Government Contract Bridge Financing:

• Finance work on government contracts (payment delayed 60-90 days)

• Accounts receivable financing against open invoices

• Enables accepting government work without cash flow strain

Technology & System Investment:

• Finance software, systems, training

• Improves efficiency and capacity

• ROI-justified (saves money or enables growth)

Example Structure: Detroit marketing agency winning major automotive client contract:

• Working capital: $250,000

• Use: Hire 4 additional staff, invest in project management software, client onboarding

• 5-year term

• Client contract provides repayment confidence

• Debt service coverage strong with new contract

LVRG's Professional Services Expertise:

• Understand contract-based revenue

• Know government payment terms

• Appreciate importance of talent acquisition

• Experience with service businesses across sectors

• Value long-term client relationships

Common Working Capital Mistakes to Avoid

Learn from others' mistakes.

Mistake #1: Waiting Until It's a Crisis

The Problem: Applying for financing when desperate puts you at extreme disadvantage:

• Lenders sense desperation (worse terms offered)

• May get declined due to distress signals

• Forced into expensive options (MCA) because need money TODAY

• Make poor decisions under pressure

Why It Happens:

• "I'll deal with it when I need it"

• Optimism bias (things will work out)

• Fear of debt

• Don't realize how long process takes

The Fix:

• Apply when you DON'T desperately need it

• Establish financing relationship before crisis

• Have backup capital source ready

• Think 3-6 months ahead, not 3-6 days

Michigan Example: Detroit contractor's excavator breaks down (can't work without it). Needs $75,000 immediately. Banks say 8-12 weeks. Desperate, takes merchant cash advance at 1.45 factor rate. Ends up paying back $108,750 in 8 months (nearly $34K in cost vs. ~$6K if had gotten LVRG Express loan proactively).

Lesson: Establish financing relationship before you need it. LVRG Express can fund in 15-20 days—but only if you apply BEFORE it's emergency.

Mistake #2: Not Calculating TRUE Need

The Problem: Borrowing too little means:

• Coming back for more money (another application, more time, more costs)

• Running out of capital mid-project

• Unable to complete what you started

• Opportunity cost of what you COULD have done with adequate capital

Why It Happens:

• Want to "minimize debt" (false economy)

• Underestimate costs

• Don't include working capital buffer

• Optimistic about timeline/revenue

The Fix:

• Calculate realistic need

• Add 20% buffer for unexpected costs/delays

• Include working capital for transition period

• Consider opportunity cost of being undercapitalized

Example Calculation: Equipment purchase working capital need:

• Equipment cost: $200,000

• Installation: $20,000

• Training: $10,000

• Working capital during 3-month ramp-up: $60,000 (payroll, materials)

• Buffer (15%): $43,500

• Total needed: $333,500

If you only borrowed $200,000 for equipment, you'd be short $133,500 for everything else.

Michigan Example: Grand Rapids manufacturer borrows $400,000 for equipment, ignoring $150,000 working capital need during ramp-up. Equipment arrives, can't afford materials to run it. Scrambles for additional financing (expensive, takes time). Should have borrowed $550,000 originally.

Lesson: Borrow what you ACTUALLY need, not what sounds "reasonable." One larger loan usually better than two smaller loans.

Mistake #3: Choosing Based Only on Rate

The Problem: Focusing only on interest rate ignores:

• Fees (origination, closing, prepayment penalty)

• Term length (lower rate but longer term = more total interest)

• Speed (opportunity cost of delay)

• Flexibility (prepayment options, collateral requirements)

• Relationship value

Why It Happens:

• Rate is easy number to compare

• Seems like most important factor

• Don't understand fees and terms

• Don't calculate total cost

The Fix:

• Calculate TOTAL cost of financing (rate + fees + term)

• Consider speed and flexibility value

• Think about prepayment (will you pay off early?)

• Evaluate entire relationship, not just one loan

Comparison Example:

Option A: Bank Loan

• Amount: $300,000

• Rate: 6%

• Term: 7 years

• Origination fee: 1% ($3,000)

• Prepayment penalty: 3 years

• Timeline: 12 weeks

• Total interest paid: $72,000

• Total cost: $75,000

Option B: LVRG Express

• Amount: $300,000

• Rate: 9%

• Term: 7 years

• Origination fee: 3% ($9,000)

• Prepayment penalty: NONE

• Timeline: 3 weeks

• Total interest paid: $114,000

• Total cost: $123,000

Wait—Option B costs $48K more!

But consider:

• 9 weeks faster funding (opportunity cost: could that equipment generate $48K+ in 9 weeks?)

• No prepayment penalty (can refinance or pay off early if business does well)

• Higher approval odds (bank may decline)

• Less documentation hassle

Sometimes paying more is worth it for speed, flexibility, certainty.

Michigan Example: Lansing retailer chooses bank loan at 5.5% over LVRG at 8.5%. Bank takes 14 weeks, approves week before Christmas season. Inventory arrives late, misses most profitable 6 weeks of year. Lost profit: $150,000. Saved on interest: $8,000. Net loss: $142,000 by choosing based on rate alone.

Lesson: Consider total value proposition, not just interest rate. Speed and certainty have value.

Mistake #4: Poor Use of Funds

The Problem: Using working capital for wrong purposes:

• Personal expenses (never)

• Speculative investments

• Covering ongoing losses (without fixing problem)

• Non-revenue-generating expenses

• Paying off personal debt

Why It Happens:

• Blurred line between business and personal

• Panic spending when cash arrives

• No clear plan for deployment

• Using as "general slush fund"

The Fix:

• Have specific use of funds BEFORE applying

• Deploy immediately according to plan

• Track spending against plan

• Use for revenue-generating or cost-saving purposes only

Good Uses:

• Equipment that increases capacity/efficiency

• Inventory for specific sales opportunity

• Marketing with clear ROI

• Staff to support growth

• Refinancing expensive debt (improves cash flow)

Bad Uses:

• Owner draw/personal expenses

• Speculation/gambling

• Covering losses without fixing root cause

• Luxury items for office

• Personal debt payoff

Michigan Example: Detroit service company receives $200,000 working capital. Instead of using for planned staff expansion, owner:

• Takes $50K personal draw

• Buys new office furniture ($30K)

• "Invests" $40K in friend's startup (loses it)

• $80K sits in account unused

Result: Still doesn't have staff to fulfill contracts, revenue doesn't grow, struggles to make loan payments.

Lesson: Use working capital strategically for specific revenue-generating purposes. Have plan BEFORE funds arrive.

Mistake #5: Ignoring Cash Flow Impact

The Problem: Not accurately projecting cash flow impact of loan payment leads to:

• Struggling to make payments

• Having to cut staff or inventory to make payments

• Defaulting on loan

• Damaging credit and banking relationships

Why It Happens:

• Optimistic revenue projections

• Don't account for seasonality

• Forget about taxes, other expenses

• Focus on getting approved, not ongoing management

The Fix:

• Conservative cash flow projections

• Model worst-case scenario (revenue 20% lower than expected)

• Account for seasonality (Michigan construction has winter slowdown)

• Ensure 1.5x DSCR cushion (not just 1.25x minimum)

Cash Flow Projection Example:

Before Loan:

• Monthly revenue: $150,000

• Monthly expenses: $120,000

• Monthly net cash flow: $30,000

• Comfortable

After $200K Loan ($3,500/month payment):

• Monthly revenue: $150,000 (same)

• Monthly expenses: $120,000 (same)

• Loan payment: $3,500

• Monthly net cash flow: $26,500

• Still comfortable (but less cushion)

If Revenue Drops 20% (realistic scenario):

• Monthly revenue: $120,000 (-20%)

• Monthly expenses: $110,000 (reduced somewhat)

• Loan payment: $3,500

• Monthly net cash flow: $6,500

• Tight (not much room for error)

Michigan Example: Traverse City resort borrows using summer revenue projections, doesn't account for 6 months of low winter revenue. Summer: cash flow great, no problem. Winter (Nov-April): revenue drops 70%, struggles to make payment. Late payments damage credit. Could have avoided by:

• Projecting seasonality accurately

• Negotiating seasonal payment structure

• Borrowing less

• Building 6-month payment reserve

Lesson: Model conservative cash flow scenarios BEFORE borrowing. Ensure you can make payment in worst-case reasonable scenario.

Mistake #6: Not Reading the Fine Print

The Problem: Signing documents without fully understanding terms leads to nasty surprises:

• Prepayment penalties (can't refinance or pay off early without huge fee)

• Personal guarantee scope (affects personal assets)

• Default provisions (what triggers default beyond late payment)

• Confession of judgment (lender can seize assets without court)

• Restrictive covenants (limitations on what you can do)

Why It Happens:

• Eager to get funded (don't want to delay)

• Documents are long and complex

• Embarrassed to ask questions

• Assume "standard" terms

The Fix:

• Read EVERYTHING before signing

• Ask questions about anything unclear

• Have attorney review (for loans $500K+)

• Negotiate unfavorable terms BEFORE signing

• Never sign under pressure

Key Terms to Understand:

Prepayment Penalty: Some lenders charge penalty if you pay off loan early.

• LVRG Express: NO prepayment penalty ✓

• Some banks: 2-3 years of interest if paid off early ✗

Personal Guarantee: You're personally liable if business can't pay.

• Standard for virtually all small business loans

• Affects personal credit if default

• Can pursue personal assets

Default Provisions: What besides non-payment triggers default:

• Filing bankruptcy

• Materially false statements in application

• Liens/judgments against business

• Change in ownership

• Failure to maintain insurance

Confession of Judgment: Allows lender to obtain judgment without court hearing.

• Mostly used in MCA industry (predatory)

• LVRG does NOT use confession of judgment

• If you see this, negotiate or walk away

Michigan Example: Warren contractor refinances expensive MCA with seemingly attractive loan. Doesn't read fine print. Discovers:

• 24-month prepayment penalty (locked in)

• Confession of judgment clause

• Weekly ACH (not monthly)

• Personal guarantee extends to future advances

Realizes too late he signed worse deal than MCA. Could have avoided by reading carefully and negotiating.

Lesson: Read every word before signing. If lender rushes you or won't answer questions, that's a red flag.

Mistake #7: Over-Leveraging

The Problem: Taking on too much debt relative to business size leads to:

• Debt service consuming most/all profit

• No cushion for problems or opportunities

• Stressed cash flow constantly

• Difficulty qualifying for additional financing later

• Default risk if any hiccup occurs

Why It Happens:

• "If some debt is good, more is better"

• Aggressive growth plans

• Overconfidence about revenue growth

• Don't understand debt capacity limits

The Fix:

• Conservative debt load (DSCR 1.5x+, not just 1.25x)

• Don't max out debt capacity

• Leave room for additional financing later

• Grow profitably before levering up more

Rule of Thumb: Total annual debt payments should be no more than 25-30% of revenue.

Example:

• Annual revenue: $1,000,000

• Maximum total debt payments: $250,000-$300,000/year

• ($21K-$25K/month)

If already paying $15K/month on existing debt, only take new loan with $6K-$10K/month payment maximum.

Michigan Example: Detroit manufacturer has revenue $2M/year, profit $300K/year. Already has:

• Equipment loan: $5K/month

• Building mortgage: $8K/month

• Vehicle loans: $2K/month

• Total: $15K/month ($180K/year)

DSCR: $300K ÷ $180K = 1.67x (healthy)

Gets aggressive, takes additional $500K working capital loan:

• Payment: $10K/month ($120K/year)

• New total: $25K/month ($300K/year)

New DSCR: $300K ÷ $300K = 1.0x (breaks even, zero cushion)

One slow month or unexpected expense creates payment crisis. Should have borrowed less or waited until revenue grew.

Lesson: Don't max out debt capacity. Leave cushion for inevitable problems and opportunities.

Working Capital Success Stories: Michigan Businesses

Real examples of Michigan businesses using working capital strategically.

Sterling Heights Automotive Supplier: $425,000

Business: Tier 2 automotive supplier, metal stamping and fabrication Employees: 45 Annual Revenue: $6.5M

Challenge: Won major contract with Ford for EV component production. Required:

• New CNC machine ($250K)

• Robotic welding system ($175K)

• Raw materials for initial production run ($100K)

• Labor during 3-month ramp-up period

Total need: $525,000

Bank said 12-16 weeks minimum. Ford wanted production to start in 8 weeks.

LVRG Solution:

• Equipment financing: $425,000

• Additional line: $100,000 (materials and labor)

• Total package: $525,000

• Timeline: 4 weeks from application to funding

• Structure: 7-year equipment financing at 7.2%, interest-only first 3 months during installation

Result:

• Equipment installed on time

• Production started week 7

• Ford contract fulfilled successfully

• Revenue increased 35% ($2.3M additional annual revenue)

• Hired 8 additional staff

• Loan paid down aggressively (will be paid off in year 4)

• Relationship with Ford strengthened (now preferred supplier)

Owner Quote: "LVRG understood our business and the automotive industry. Banks wanted endless documentation and would have taken 3+ months. We would have lost the Ford contract. LVRG moved fast, gave us straight answers, and funded exactly when they said they would. We're now discussing additional financing for our next expansion."

Grand Rapids Restaurant Group: $180,000

Business: 3-location restaurant group (casual dining) Employees: 85 seasonal (50 year-round) Annual Revenue: $4.2M (highly seasonal)

Challenge: Walk-in cooler failure at flagship location during peak summer tourist season (July). Without cooler, couldn't operate. Quotes:

• Equipment: $85,000 (commercial walk-in cooler, installation)

• Emergency timeline: needed ASAP

Also needed:

• Kitchen equipment refresh at 2nd location ($65,000)

• Working capital for fall/winter season ($30,000)

Total need: $180,000

Considered merchant cash advance (could get $100K in 2 days) but cost was 1.4x ($140K repaid). Banks said 8-10 weeks.

LVRG Solution:

• Express Working Capital: $180,000

• Timeline: 16 days from application to funding

• Structure: 5-year term, 9.5% rate, revenue-based payment option (10% of monthly revenue)

• No prepayment penalty

Result:

• Emergency cooler installed, flagship location back operating in 5 days from funding

• 2nd location kitchen refresh completed during slow season

• Revenue-based payment structure perfect for seasonal business:

  • Summer (June-Aug): $15K-$18K/month payments (easy to handle)

  • Winter (Jan-March): $4K-$6K/month payments (manageable in slow season)

• Avoided expensive MCA (saved ~$100K vs. MCA option)

• Paid off in 3.5 years (ahead of 5-year term)

Owner Quote: "We were in panic mode. The cooler died peak season—every day we were closed was $8,000-$10,000 in lost revenue. Merchant cash advance companies were calling immediately (how do they know??) offering same-day money but the cost was insane. LVRG funded in just over 2 weeks, which felt like forever at the time but was actually incredibly fast. The revenue-based payment was genius—high payments when we're busy, low when we're slow. Exactly what seasonal businesses need."

Ann Arbor Medical Practice: $350,000

Business: Primary care practice, 2 physicians + 1 NP Employees: 12 Annual Revenue: $2.8M

Challenge: Opportunity to acquire retiring physician's solo practice:

• Purchase price: $280,000 (goodwill, patient base, equipment)

• Integration costs: $40,000 (EMR integration, marketing, staff transition)

• Working capital during patient transition: $30,000

Total need: $350,000

SBA loan would have been ideal (best rates) but timeline was 8-10 weeks. Seller had another buyer interested and wouldn't wait.

LVRG Solution:

• Express Working Capital: $350,000

• Timeline: 18 days from application to closing

• Structure: 7-year term, 8.8% rate

• Secured by acquired practice assets + personal guarantee

Result:

• Acquisition closed on schedule

• 560 patients transitioned to acquiring practice (82% retention rate)

• Revenue increased $900,000 annually

• Hired 2 additional staff (medical assistant, front desk)

• After 18 months, refinanced with SBA loan at lower rate (LVRG had no prepayment penalty)

• Expanded to second location 2 years later (LVRG financed that too)

Owner Quote: "The timing was critical. The selling physician was retiring whether we bought his practice or not. If we waited 10 weeks for an SBA loan, the other buyer would have taken it. LVRG understood the urgency and moved incredibly fast. Yes, the rate was higher than an SBA loan, but the opportunity was worth it. And when we were ready to refinance 18 months later, LVRG had no prepayment penalty. That flexibility was huge."

Lansing HVAC Contractor: $125,000

Business: Commercial HVAC installation and service Employees: 18 Annual Revenue: $3.1M

Challenge: Seasonal cash flow management. Revenue pattern:

• Spring/Summer (Apr-Sep): $350K-$400K/month (installation season)

• Fall/Winter (Oct-Mar): $150K-$200K/month (service only)

During winter, struggled to:

• Maintain full crew (payroll $140K/month)

• Purchase materials for spring projects

• Cover fixed overhead ($45K/month)

Used credit cards (high interest) and sometimes delayed vendor payments (damaged relationships).

LVRG Solution:

• Revenue-Based Financing: $125,000

• Structure: Repay 12% of monthly revenue until $156,250 paid back (1.25 factor)

• Seasonal adjustment: Payments automatically flex with revenue

Result:

• Received $125,000 in November (slow season starting)

• Used to:

  • Maintain full crew through winter ($85K)

  • Pre-purchase materials for spring ($30K)

  • Cover overhead gap ($10K)

• Payments:

  • Winter (Nov-Mar): $18K-$24K/month (12% of ~$150K-$200K revenue)

  • Spring/Summer (Apr-Sep): $42K-$48K/month (12% of $350K-$400K revenue)

• Paid off in 11 months

• Benefits:

  • Crew stayed together (no layoffs/rehiring)

  • Ready to start season with materials and full crew

  • Vendor relationships intact (paid on time)

  • Credit cards paid off (saved 22% interest)

Owner Quote: "Seasonal businesses like construction and HVAC have a feast-or-famine cash flow. Winter is brutal—revenue drops but costs don't. Revenue-based financing was perfect because payments adjust automatically. When revenue is down, payment is lower. When revenue is high, payment is higher but affordable. This structure makes way more sense for seasonal businesses than traditional fixed payment loans."

How to Calculate Your Working Capital Needs

Don't guess—calculate precisely what you need.

Method 1: Cash Flow Gap Analysis

Best For: Covering operational shortfalls, seasonal businesses, payment term gaps

Formula: Working Capital Need = (Monthly Operating Expenses × Number of Months to Cover) - Current Cash Reserves

Example: Michigan Automotive Supplier

Monthly Operating Expenses:

• Payroll: $200,000

• Materials: $150,000

• Rent/utilities: $25,000

• Other overhead: $25,000

• Total: $400,000/month

Payment Terms Gap: You pay suppliers COD or net-30, but GM pays you in 90 days = 2-month gap

Calculation:

• Need to cover: 2 months of expenses

• 2 months × $400,000 = $800,000

• Current cash reserves: $200,000

• Working capital need: $600,000

This ensures you can operate for 2 full months before GM payment arrives.

Method 2: Growth Capital Calculation

Best For: Expansion, new locations, significant growth initiatives

Formula: Working Capital Need = (Upfront Investment Costs + Operating Losses During Ramp-Up) - Expected Revenue During Ramp-Up

Example: Grand Rapids Retailer Opening Second Location

Upfront Costs:

• Leasehold improvements: $80,000

• Initial inventory: $120,000

• Equipment & fixtures: $40,000

• Deposits & licenses: $15,000

• Total upfront: $255,000

Monthly Operating Costs (New Location):

• Rent: $8,000

• Payroll: $25,000

• Utilities/other: $7,000

• Total: $40,000/month

Ramp-Up Timeline: 6 months to breakeven Expected Revenue During Ramp-Up:

• Month 1-2: $15,000/month

• Month 3-4: $30,000/month

• Month 5-6: $45,000/month

• Total 6-month revenue: $180,000

Operating Costs for 6 Months: $240,000 Revenue During Ramp-Up: $180,000 Operating Loss: $60,000

Total Working Capital Need:

• Upfront: $255,000

• Operating loss: $60,000

• Total: $315,000

Add 20% buffer for delays/unexpected: $378,000

Method 3: Accounts Receivable Financing Need

Best For: B2B businesses with long payment terms

Formula: A/R Financing Need = (Average Monthly Sales × Payment Terms in Months × Desired Advance Rate)

Example: Detroit Professional Services Firm

Average Monthly Sales: $150,000 Payment Terms: 60 days (2 months) Desired Advance Rate: 80%

Outstanding A/R at Any Time: $150,000 × 2 = $300,000

A/R Financing Need: $300,000 × 80% = $240,000

This gives you 80% of invoice value immediately instead of waiting 60 days.

Method 4: Inventory Financing Need

Best For: Retailers, wholesalers, seasonal inventory businesses

Formula: Inventory Financing Need = (Peak Inventory Required - Current Inventory - Available Cash)

Example: Traverse City Retailer (Seasonal Tourist Business)

Peak Inventory Needed (June 1): $250,000 Current Inventory (April 1): $80,000 Available Cash: $40,000

Additional Inventory to Purchase: $250,000 - $80,000 = $170,000 Cash Available: $40,000

Inventory Financing Need: $170,000 - $40,000 = $130,000

This enables stocking up for peak season without depleting cash reserves.

Method 5: Equipment + Working Capital Bundle

Best For: Equipment purchases that require operational capital during transition

Formula: Total Need = Equipment Cost + Installation + Training + (Monthly Operating Costs × Transition Period in Months)

Example: Ann Arbor Manufacturing Company

Equipment Costs:

• CNC machine: $300,000

• Installation: $25,000

• Training: $15,000

• Total equipment: $340,000

Operating Costs During Transition:

• Materials for test runs: $30,000

• Labor during learning curve: $45,000 (3 months reduced productivity)

• Maintenance during warranty period: $10,000

• Total transition costs: $85,000

Total Financing Need: $340,000 + $85,000 = $425,000

Most businesses only think about equipment cost ($300K) and run short on transition costs ($85K).

Quick Working Capital Assessment Tool

Answer these questions to estimate your need:

1. What's your average monthly operating expense? $__________

2. How many months of expenses do you want to cover? ______ months (Seasonal businesses: 3-6 months; Stable businesses: 1-3 months)

3. Basic need = Question 1 × Question 2: $__________

4. Current cash reserves: $__________

5. Net working capital need = Q3 - Q4: $__________

6. Add 20% buffer for unexpected: $__________

7. TOTAL WORKING CAPITAL NEED: $__________

Don't Forget Hidden Costs

When calculating working capital needs, include:

Taxes:

• Payroll taxes (7.65% of payroll)

• Sales tax remittance (if applicable)

• Quarterly estimated taxes

• Property taxes

Insurance:

• Liability insurance premiums

• Workers comp (often quarterly)

• Property/equipment insurance

• Health insurance (if providing)

Professional Services:

• CPA/accounting fees

• Attorney fees

• Consultants

• Marketing agencies

Maintenance & Repairs:

• Equipment maintenance

• Facility repairs

• Vehicle maintenance

• Technology support

Regulatory & Compliance:

• Licenses and permits (renewals)

• Inspections

• Certifications (ISO, industry-specific)

• Training (safety, compliance)

Michigan-Specific Considerations:

• Winter heating costs (significantly higher Nov-March)

• Snow removal (commercial properties)

• Salt/materials for winter operations (construction, transportation)

• Seasonal fluctuations in utilities

When to Revise Your Working Capital Needs

Increase Your Need If:

• Sales growing faster than expected (need more inventory, staff)

• Customer payment terms extending (A/R growing)

• Supplier terms tightening (need to pay faster)

• Experiencing unexpected expenses

• Opportunity arises (acquisition, large contract)

May Need Less If:

• Sales slower than projected

• Improved collections (A/R shrinking)

• Better supplier terms negotiated

• Found cost efficiencies

• Received unexpected cash injection

Review Quarterly: Working capital needs change as business evolves. Review every 90 days and adjust accordingly.

Frequently Asked Questions

Q: What's the minimum credit score needed for working capital loans in Michigan?

A: Depends on program:

• LVRG Express: 650 FICO personal, 165 SBSS business minimum

• Traditional Working Capital: 600 FICO personal for some programs

• Below 600: Very limited options, likely merchant cash advance only (expensive)

Q: How fast can I get working capital funding?

A:

• LVRG Express: 15-20 business days average

• Traditional Working Capital: 4-6 weeks

• SBA Loans: 6-8 weeks through LVRG (90-120+ days direct to bank)

• Merchant Cash Advance: 1-3 days (but expensive—not recommended)

Q: Do I need collateral for a working capital loan?

A: Depends:

• LVRG Express: Minimal collateral requirements, no personal collateral for qualifying businesses

• Traditional Unsecured: No collateral for $50K-$250K if strong credit

• Traditional Secured: Collateral required for larger amounts (equipment, A/R, real estate)

• Personal Guarantee: Required for virtually all small business loans regardless of collateral

Q: Can startups get working capital loans?

A: Difficult but possible:

• LVRG Express: Requires 2+ years operating history (startups not eligible)

• Traditional: Some programs accept 1+ years in business

• Franchise Startups: May qualify with franchise experience

• Dental/Veterinary: Special consideration for new practices

• Best Alternative: Personal loans, SBA microloans, or wait until 2 years in business

Q: What can I use working capital loans for?

A: Almost anything except commercial real estate purchase:

• ✅ Equipment purchases

• ✅ Inventory/supplies

• ✅ Payroll

• ✅ Marketing/advertising

• ✅ Leasehold improvements

• ✅ Debt refinancing

• ✅ Business acquisitions

• ✅ Working capital/cash flow

• ❌ Commercial real estate (use LVRG Commercial Real Estate Financing instead)

• ❌ Personal expenses

• ❌ Speculative investments

Q: Does LVRG serve businesses outside Metro Detroit?

A: Yes! LVRG serves businesses throughout Michigan:

• Metro Detroit (Wayne, Oakland, Macomb)

• Grand Rapids & West Michigan

• Ann Arbor & Washtenaw County

• Lansing & Mid-Michigan

• Flint & Genesee County

• Upper Peninsula

• Everywhere in Michigan

Plus, LVRG provides financing nationwide for certain products.

Q: What's the difference between working capital and a line of credit?

A:

• Working Capital Loan: Lump sum, fixed monthly payment, set term

• Line of Credit: Draw as needed, revolving, interest only on drawn amount

LVRG currently focuses on working capital term loans (not traditional lines of credit). However, our revenue-based financing offers similar flexibility to a line of credit.

Q: Can I pay off my working capital loan early?

A: With LVRG Express: YES, no prepayment penalty!

Many banks have prepayment penalties (2-3 years of interest). LVRG Express has NONE—if your business does well and you want to pay off early, you can without penalty.

Q: What if my business is seasonal?

A: Perfect for revenue-based financing!

Revenue-based financing payment is percentage of monthly revenue, so:

• Busy season: Higher payment (but revenue is high so affordable)

• Slow season: Lower payment (matches lower revenue)

Example: Construction company in Michigan

• Summer: $400K revenue, payment $40K (10%)

• Winter: $150K revenue, payment $15K (10%)

Self-adjusting to seasonal patterns.

Q: How is working capital different from SBA loans?

A: Working Capital Loans:

• Speed: 15-20 days (Express program)

• Documentation: Minimal

• Interest Rate: Higher (8-18%)

• Repayment Term: Shorter (1-10 years)

• Use of Funds: Very flexible

• Best For: Fast needs, amounts under $350K

SBA Loans:

• Speed: 6-8 weeks (via LVRG's SBALoansMichigan.com)

• Documentation: Extensive

• Interest Rate: Lower (Prime + 2-3%)

• Repayment Term: Longer (10-25 years)

• Use of Funds: More restrictions

• Best For: Large amounts, best rates available

Learn more about SBA loans: SBALoansMichigan.com

Q: What industries does LVRG serve?

A: Most industries! Common Michigan industries:

• Manufacturing & automotive suppliers

• Construction & trades

• Healthcare (dental, veterinary, medical)

• Professional services

• Restaurants & hospitality

• Retail & e-commerce

• Technology & IT services

• Transportation & logistics

• And many more

Restricted: Adult entertainment, cannabis, gambling, speculative real estate

Q: Will applying hurt my credit score?

A: No! LVRG does soft credit inquiry during application—does NOT impact your score.

Hard inquiry only if/when you decide to proceed with loan after approval.

Q: What if I have bad credit?

A: Options are limited but exist:

• 650+ credit: LVRG Express and most programs available

• 600-649 credit: Some traditional working capital programs

• Below 600: Very limited (revenue-based financing possible if strong revenue)

Best Strategy: Work on improving credit for 6-12 months before applying. Even 50 points improvement (600→650) opens many options.

Q: Do I need a business plan?

A: Depends:

• LVRG Express ($10K-$350K): No business plan required

• Traditional under $500K: Usually not required (clear use of funds sufficient)

• Over $500K: Business plan or detailed investment memo helpful

• SBA Loans: Usually required

Q: Can I get working capital to refinance merchant cash advances?

A: YES! This is an approved use and one of the best uses of working capital.

Many Michigan businesses are trapped in expensive MCAs (40-80% APR equivalent). LVRG can refinance into affordable working capital loan (8-18%), dramatically improving cash flow.

Q: How much does working capital cost?

A:

• Interest Rate: 8-18% typically (depends on credit, risk)

• Origination Fee: 1-5% of loan amount

• Monthly Payment: Depends on amount and term

• Total Cost: Calculate rate + fees over full term

Example: $100,000 loan at 10% for 5 years

• Monthly payment: $2,124

• Total paid: $127,440

• Total interest: $27,440 (27.4% of loan amount)

Q: What documentation do I need?

A: For LVRG Express:

• Business bank statements (3 months)

• Business & personal tax returns (3 years)

• Current P&L and balance sheet (within 90 days)

• Business debt schedule

• Completed LVRG application

That's it! No business plan, no projections, no excessive documentation.

Q: Can I get working capital if I already have debt?

A: Yes, if your cash flow can support additional debt.

Lenders calculate Debt Service Coverage Ratio (DSCR):

• Formula: Net Operating Income ÷ Total Annual Debt Payments

• Minimum: 1.25x

• Preferred: 1.50x+

If your DSCR with new loan is 1.25x or higher, you likely qualify.

Q: What if I'm declined?

A: Ask why specifically, then:

Common Reasons & Solutions:

• Credit too low: Improve credit, reapply in 6 months

• Not enough cash flow: Increase revenue or reduce expenses, reapply in 6-12 months

• Too much existing debt: Pay down debt, improve DSCR

• Incomplete documentation: Provide complete info, reapply immediately

• Use of funds not approved: Change use or try different product

One lender declining doesn't mean all will. If LVRG declines, we'll help identify what you need to do to qualify later.

Apply for Working Capital Today

Don't let cash flow challenges hold your Michigan business back.

Why Choose LVRG Business Funding?

Michigan's Business Loan Authority

20+ Years Experience: Founded in Metro Detroit in 2003, LVRG has facilitated over $1 billion in financing to more than 10,000 businesses nationwide, with deep expertise in Michigan's economy and industries.

Fast Approvals:

• Express Working Capital: 15-20 days

• Traditional Working Capital: 4-6 weeks

• SBA Loans (via SBALoansMichigan.com): 6-8 weeks

Compare to 90-120+ days at banks.

Flexible Options:

• $10K-$350K Express program

• $50K-$5M traditional working capital

• Revenue-based financing for seasonal businesses

• SBA loans for best rates (via SBALoansMichigan.com)

Michigan Expertise: We understand:

• Automotive supplier payment terms

• Seasonal business patterns (winter impact)

• Manufacturing equipment financing

• Construction cash flow challenges

• Michigan's diverse economy

Boutique Service, Institutional Capacity:

• Work directly with senior leadership (not call center)

• Direct lending capability + banking partnerships

• Personal service at every step

• Long-term relationship focus

No Prepayment Penalties: LVRG Express has NO prepayment penalty—pay off early, save interest.

Transparent Terms: No hidden fees, no surprises. All costs disclosed upfront before you sign anything.

Three Ways to Apply

1. Apply Online (Fastest)

• Visit: LVRGFunding.com/apply-now

• Takes 5-10 minutes

• No hard credit pull

• Response within 1 business day

2. Call Us

• Phone: (855) 998-5874

• Speak with LVRG funding specialist

• Get questions answered

• Start application over phone

3. Email Us

• Email: info@lvrgllc.com

• Describe your business and needs

• We'll respond within 4 business hours

• Schedule consultation call

What Happens After You Apply?

Day 1: Apply online or call Day 2: LVRG advisor contacts you, discusses options Day 5-7: Submit documentation Day 12-15: Credit decision, approval, term sheet Day 15-20: Closing, funding wired to your account

For Express Working Capital: Average 15-20 business days from application to funding

Geographic Areas Served

LVRG proudly serves Michigan businesses statewide:

Metro Detroit:

• Detroit

• Warren

• Sterling Heights

• Dearborn

• Livonia

• Troy

• Farmington Hills

• Southfield

• Rochester Hills

• Novi

• Canton

• Ann Arbor

• Pontiac

• Royal Oak

• And all Wayne, Oakland, Macomb counties

West Michigan:

• Grand Rapids

• Kalamazoo

• Holland

• Muskegon

• Wyoming

• Kentwood

Mid-Michigan:

• Lansing

• East Lansing

• Jackson

• Battle Creek

Other Michigan Cities:

• Flint

• Saginaw

• Bay City

• Traverse City

• Petoskey

• Marquette (UP)

• And everywhere in between

No matter where your Michigan business is located, LVRG can help.

Industries We Specialize In

LVRG has deep expertise financing:

• Manufacturing (especially automotive suppliers)

• Construction (general contractors, specialty trades)

• Healthcare (dental, veterinary, medical practices)

• Professional Services (accounting, law, consulting, IT)

• Restaurants & Hospitality

• Retail & E-commerce

• Transportation & Logistics

• Technology & Software

• And many more

If your industry isn't listed, contact us—we likely serve it.

Ready to Get Started?

Don't wait until cash flow becomes a crisis.

Apply today and have working capital in place BEFORE you need it urgently.

Phone: (855) 998-5874

Online: LVRGFunding.com/apply-now

Email: info@lvrgllc.com

Office: LVRG Business Funding 615 Griswold Street, Suite 700 Detroit, MI 48226

Hours: Monday-Friday: 8:00 AM - 5:00 PM EST

About LVRG Business Funding

LVRG Business Funding is Michigan's Business Loan Authority, headquartered in Downtown Detroit. Founded in 2003 by Charles M. Barr, LVRG has facilitated over $1 billion in business financing to more than 10,000 established businesses nationwide.

Our Services:

• Express Working Capital Loans: $10K-$350K (15-20 days)

• Traditional Working Capital: $50K-$5M

• Equipment Financing: $100K-$50M+

• Commercial Real Estate Financing: $500K-$15M

• SBA Loans: Via SBALoansMichigan.com platform ($500K-$15M)

Our Approach: LVRG combines boutique personal service with institutional capital capacity. We're not transactional—we build long-term strategic partnerships with business owners. Whether you need $10,000 or $10,000,000, you work directly with experienced professionals who understand your business and industry.

Our Commitment:

• Transparent terms, no hidden fees

• Fast decisions (days to weeks, not months)

• Expert guidance through entire process

• Michigan expertise and nationwide reach

• Your success is our success

Contact LVRG: Phone: (855) 998-5874 Website: LVRGFunding.com Email: info@lvrgllc.com

Meta Note: This guide was last updated November 20, 2024. Lending programs, rates, and requirements change. Contact LVRG for current information specific to your situation. This guide is for informational purposes only and does not constitute financial advice.