To assist you in your financial journey, we’ve put together a comprehensive FAQ guide that addresses common questions and provides valuable resources. Whether you’re exploring the world of business financing or seeking to understand financial terms, our FAQ page is here to help.
Please feel free to explore the questions and answers below, and if you have any additional inquiries or require further assistance, our dedicated team of experts is just a phone call or email away.
If you don’t have enough cash to cover monthly operating expenses, equipment purchases, or growth opportunities, a loan may be a viable solution.
The type of loan you need depends on your specific requirements. If you need cash for operating expenses, a line of credit is usually best. If you require a one-time cash injection for equipment or a business vehicle, a term loan may be the better choice.
A term loan provides a set amount of funds upfront, with fixed monthly payments over the loan term.
Business loans typically have monthly payment obligations. A line of credit has interest-only payments, while a term loan features fixed principal and interest payments.
You’ll need some basic business and personal financial information to submit an application. Review our Loan Checklist for more details.
Yes! OPB accepts online loan applications for lines of credit and term loan amounts up to $250,000 and up to $350,000 for owner occupied commercial real estate.
It is a common practice that all business owners provide a personal guarantee. Providing a personal guarantee means that if the business becomes unable to repay the debt, the individual assumes personal responsibility for the balance.
A general rule of thumb is that a line of credit should be around 10% of your annual revenues.
You can use a business credit card, but it may have higher interest rates than a business line of credit. Credit cards can be suitable for employee purchases and rewards.
Working capital lines of credit are designed to address short-term operational needs and maintain liquidity.
Working capital is not cash alone. It’s the amount left after subtracting current liabilities from current assets, reflecting your business’s operational efficiency.
Working capital is vital for day-to-day operations, growth, and resilience. It affects liquidity, debt payments, and growth potential.
No, you only pay monthly interest on the balance of your line of credit. If it’s at a zero balance, no interest will accrue.
Credit decisions consider personal/guarantor credit history, business credit history, years in business, financial trends, debt service coverage, leverage, payment history, industry type, guarantor strength, overdraft history, collateral, etc.
Cash flow is the movement of money into and out of your business and it’s measured by tracking that movement. The timing of cash flows is crucial for your business operations. If more cash is going out than coming in, it may result in a cash flow deficit, making it challenging to pay suppliers, employees, and more. A revolving line of credit can help bridge these cash flow gaps until you receive cash, such as payments from accounts receivable.
No, a company can show a profit on the Income Statement but have no cash in the bank. For example, you may have sold inventory and recorded the sale, but you haven’t received payment yet. This results in a profit on your Income Statement but no cash on your Balance Sheet.
Working capital lines of credit are generally required to be secured by a blanket lien on general business assets. Other collateral may be considered. Reach out to us here.
Please reach out to us by contacting one of our local Commercial Relationship Managers to discuss your options.
Yes. We will pull credit on all individual borrowers and guarantors. We use the report to evaluate consumer credit history to help determine the level of risk associated with lending to that consumer and their history of credit repayment.
The time to access loan funds varies depending on complexity. Factors such as type of loan, type of collateral and the speed of documentation back and forth can affect the overall timeline. Our goal is to get you access to your loan funds as quickly as possible.
A prepayment penalty is a fee that some lenders charge when you pay all or part of your loan balance off early, prior to maturity. Generally, commercial real estate loans will have a prepayment penalty, but all loans can have them.
Owner Occupied commercial real estate requires occupancy by the borrower or guarantor. SBA guidelines require at least 51% of total square footage occupancy to be considered Owner Occupied. Non-owner Occupied real estate is either investment property or occupied less than 50% by the borrower or guarantor.
Yes, please reach out to us by contacting one of our local Commercial Relationship Managers to discuss your options.
No, you can apply without having an OPB account, but we pride ourselves on our relationship-based banking and would like the opportunity to visit with you about deposit accounts and other banking solutions.
Local banks offer personalized service, local decision-making, and a deeper understanding of your community’s needs.
Terms to Know: leverage, working capital, loan term, amortization, net worth, assets, liabilities, revolving, business assets, interest only, fixed payment, variable rate, refinance, owner-occupied, non-owner occupied, LTV (Loan to Value), unsecured, accrued, operating expenses.
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