Madison Resources Ltd. provides financing to small and mid-sized businesses from Carle Place, on Long Island. The first thing we look at is not a credit score — it is whether the cash the business actually generates can cover what it would owe.
Lenders call this debt service coverage. It is simple, it is the most honest single test of a business loan, and you can run it yourself before speaking to anyone. Move the sliders.
Monthly figures. Estimates are fine — this is for your own orientation.
There is no universal cut-off, and every lender sets its own view. The bands below reflect how the ratio is commonly read.
The business would have to find money from elsewhere every month to stay current. A loan here does not solve a cash problem; it enlarges it.
Payments are covered, but with little margin. One slow month, one late customer or one repair bill tips it over. Proceed only with a clear reason and a reserve.
Around 1.25× is a benchmark many lenders commonly use. It leaves room for the ordinary unevenness of business income.
A weak coverage ratio is information, not an obstacle to route around. These tend to help more than a larger or more expensive loan.
Business financing can be priced as an interest rate, a flat fee, a factor or a mixture, which makes offers hard to compare. New York's commercial finance disclosure law requires providers of many small business financing offers to disclose the cost in standardized terms, including an estimated annual percentage rate and the total repayment amount.
Whether or not a particular offer is covered, ask every provider for the same three figures before signing: the total amount you will repay, the payment schedule, and an annualized cost. Then compare those — not the headline.
Fixed repayment over a defined term, sized to the business's demonstrated cash flow.
Access to funds for timing gaps between costs and receipts, drawn and repaid as needed.
Finance for the equipment a business uses to earn, repaid over its working life.
No. We finance businesses only. For a mortgage or personal credit, you need a lender licensed for consumer lending.
Usually not, and that answer protects the business. A loan the cash flow cannot carry tends to end in missed payments, collateral at risk and a harder position than before.
Often, for smaller businesses. A guarantee usually makes you personally responsible for the whole debt. Read it carefully and take independent legal advice before signing.
Do not pay. We never charge before funding. Advance-fee loan offers are fraud, whatever name they use.
Recent financial statements and your existing debt schedule tell us more than any conversation. Before sending documents, confirm our identity through a source you find yourself — for example the New York Department of State's business entity records — rather than relying on any website, including this one.