Western Financial Review

Lender Overview

Types of loans
  • Capital equipment financing
  • Small business working capital
  • Business line of credit (LOC)
  • Merchant cash advance (MCA)
Loan amounts
  • $10,000 to $2 million business LOC
  • MCA capital based on prior sales
  • 100% equipment financing
Terms of payment
36 to 60 months
Pros
  • Same-day or next-day approval
  • Provides funding to high-risk industries
  • Possible 24-hour turnaround time for equipment financing
Cons
  • May take 5 or more business days to receive funding
  • Term and rate information not available on the website
  • Merchants must contact the lender for full loan fee details

What businesses are the best candidates for loans from Western Financial?

Western Financial provides funding for businesses in a diverse range of industries, including high-risk vocations like transportation and construction. Businesses without the financial strength or positive credit profile required to obtain a bank loan may be candidates for a loan from this lender. Transportation and health companies in need of equipment leases can inquire about Western Financial’s equipment financing options.

Company Profile

Western Financial was established in 2009 and is currently located in Orange, California. As a small business loan and equipment financing provider, it offers funding to merchants in the U.S. and Canada seeking alternatives to banks and other large lending institutions.

Western Financial serves many high-risk industries, including transportation and construction, and prides itself on innovation. Citing the use of “cutting-edge technology” to help merchants “unlock their business potential,” Western Financial seeks to position itself as an exceptional player in the online lending space.

Although the website speaks strongly of the lender’s focus on the individual and its drive for results, as of this writing, many of the links on the site fail to work, and the latest blog post stating the site is being updated was written in 2014. However, the company is still actively lending to merchants and can be contacted via phone or its online form.

Credit Policy

No specific credit score requirement is given by Western Financial, but the “Financial Calculator” on the lender’s resource page allows interested merchants to select anywhere from “poor” to “excellent” when estimating payments on the desired amount of a loan. This suggests Western Financial is willing to work with companies struggling with low credit.

Considering the full financial picture of a company is a typical practice for alternative lenders. Most businesses seeking funding from lenders like Western Financial don’t meet the qualification requirements of traditional lending institutions and have a better chance of obtaining funding from a source that will look at more than just a FICO score as a measure of determining eligibility.

Exceptions

The diverse range of industries to which Western Financial lends indicates its willingness to take on a greater level of risk than many other lenders. Although no particular exceptions are stated, alternative lenders are usually open to trying to find a loan product even for companies not meeting the minimum qualification requirements. Merchants in challenging financial situations would need to contact Western Financial to find out if the company is able to approve funding.

Target Market

According to its website, Western Financial works with the following industries and business types:

  • Agriculture
  • Automotive
  • Aviation
  • Construction
  • Consumer retail
  • Convenience stores
  • Environmental services
  • Franchises
  • Green energy
  • Health and fitness
  • Healthcare
  • Hospitality
  • Information technology
  • Legal
  • Manufacturing
  • Mining
  • Non-profit
  • Oil and gas
  • Printing
  • Professional services
  • Recreation
  • Restaurant and food retail
  • Software
  • Telecommunications
  • Trucking and transportation
  • Utilities

Cautionary Industries

Many of the businesses with which Western Financial works aren’t serviced by other alternative lenders and are likely to be turned down by banks because they’re considered high-risk investments. Transportation, non-profits, legal services and some types of automotive businesses have few options when it comes to financing, especially if credit is less than ideal.

Because of the lender’s willingness to consider funding these industries, companies with unique financial needs, poor credit or high-risk markets may be able to obtain loans from Western Financial. Calling the company to discuss the type and amount of funding needed is the best way to determine if an appropriate loan product is available.

Term Length

According to the Western Financial payment estimate calculator, terms for loans range from 36 to 60 months. This is longer than the average terms offered in the alternative lending industry and gives merchants a little more leeway in paying off loans. However, because the payment estimation tool doesn’t include a loan type, it’s difficult to determine how monthly obligations differ between working capital and equipment leasing options.

According to the calculator, a business with good credit taking out a $150,000 loan for 60 months would have an average monthly payment of $3,005. With 36-month terms, the payments jump to $4665 per month. These numbers provide a basic idea of how to budget for each monthly installment.

With a revolving business LOC, payments are made only on what a merchant draws from the credit line and not the full amount of credit available. MCAs have no specific terms or due dates and are instead structured to provide a lump sum at the start of the loan which is then paid back in daily installments until the principal and fees have been paid in full.

What’s Required to Apply

There are two ways to start the lending process with Western Financial: complete the online application or call for a quote. Applying online requires merchants to provide:

  • Business name or DBA
  • Business type
  • Business address, phone number and fax number, if applicable
  • Business email address
  • Tax ID
  • Location of equipment to be financed
  • Time in business, including time under different ownership

For each current owner, the application also requests:

  • Owner’s name and contact information
  • Owner’s date of birth and social security number
  • Owner’s title at the company

Once an application is submitted, Western Financial reviews the details and should approve qualifying businesses the same day or the next day. Approved merchants are contacted by an account manager with a loan offer, and the loan documents are sent for review. If a merchant accepts the offer, the documents are signed and returned. Western Financial wires funds electronically into the merchant’s accounts within five days of receiving the completed documents. Turnaround time for equipment funding can be as fast as 24 hours.

Business LOCs and equipment loans require collateral to secure the amount Western Financial approves. The lender uses the equipment being financed as collateral for the loan and offers a variety of options for securing its LOCs, including real estate.

Factor Rates

FWestern Financial doesn’t list much rate information on its website aside from noting rates on its equipment loans are fixed and no down payment is required at the time of funding. Merchants looking for more information must either fill out an application or call the company, as there is no way to request a quote online.

Using the lender’s financial calculator, it’s possible to get an idea of loan rates associated with various credit levels and term lengths. Inputting a fixed amount and changing the variables indicates merchants can expect rates between 1.08 and 1.43 depending on the financial strength of the business.

Western Financial offers both fixed and flexible repayment options, including the traditional MCA payment structure of a fixed daily percentage of credit card sales. It’s advisable for merchants to use the financial calculator to estimate monthly obligations before deciding whether to apply.

Stacking

Western Financial doesn’t state any particular policy regarding stacking, but taking out loans from multiple providers isn’t often welcomed by alternative lenders. Merchants already carrying loan debt, especially those with poor credit or operating in high-risk industries, are more likely to miss payments or default, creating more risk for the lender.

However, because Western Financial provides more than one type of loan and is in the business of funding equipment, merchants with diverse financial needs should inquire whether the lender will extend more than one loan at a time. This may be necessary for medical companies, construction companies or fleet operators needing to purchase multiple pieces of equipment at once or those seeking to invest in extensive growth.

Merchants must keep in mind each loan has its own fees and terms, and taking on several monthly payments at once could lead to bigger debt problems instead of the growth desired.

Documentation Fees

No documentation fees are listed on the Western Financial website; however, an additional cost for processing loan or lease paperwork may apply.

Origination Fees

It’s unclear whether Western Financial charges origination fees on loan products.

Renewal Policy

On its website, Western Financial states merchants may qualify for “additional capital” before paying off existing loans. How much needs to be paid off and the exact terms required to qualify isn’t explained. A common practice among alternative lenders is to require at least 50 percent of a loan to be paid back and for the business to have maintained or improved the financial profile presented at the time of the initial loan.

Merchants with a business LOC through Western Financial have a continual source of working capital thanks to the revolving structure of the loan. Each time a payment is made, available credit is replenished; therefore, no renewal is needed.

Interest Forgiveness

Few alternative lenders offer interest forgiveness, and Western Financial doesn’t indicate that it extends this type of financial relief to merchants. When loan fees are based on fixed buy rates and not percentages, there’s no benefit to paying back early. Some lenders have the opposite policy and charge a prepayment penalty.

The structure of equipment leases requires fixed monthly payments over a predetermined period of time, so merchants don’t have the option of settling the lease before the end of the terms.

Loan Use

Because Western Financial offers several different funding options, merchants can choose the loan type most suited to their needs.

Capital equipment loans are for “most equipment types” used in the industries the lender serves. This financing can be used to:

  • Expand trucking fleets
  • Update existing equipment
  • Buy new equipment
  • Update medical technology
  • Improve construction speed or capacity
  • Invest in safer equipment

Approved merchants receive 100 percent financing, allowing for the purchase of equipment without putting a strain on the company’s budget. Funding may also be beneficial if a limited-time deal on equipment is offered at a point when a merchant isn’t able to cover the full purchase with existing finances.

Western Financial’s LOCs and MCA loans can be used for “any business purpose,” including:

  • Seasonal working capital
  • Balancing cash flow
  • Investing in growth
  • Purchasing inventory
  • Launching seasonal marketing campaigns

Merchants with ongoing funding needs may benefit most from an LOC. MCAs are best when cash is needed immediately but sales are expected to pick up in the near future.

Online Reputation

Very little feedback regarding Western Financial is available online. The company appears to have no presence on social media and hasn’t claimed a Google or Yelp profile.

Specific loan information on Western Financial’s website is difficult to find, and the site appears to have been in the redesign phase since 2014. Along with the lack of social media profiles and reviews, this presents a challenge for merchants trying to compare multiple loan options. At this time, contacting the company directly is the only way to find out more about its loan process and determine the level and quality of customer service provided.

Licenses & Accreditations

Western Financial has been accredited by the BBB since 2015 and maintains an A+ rating.

Company Contacts Details

Phone number:

  • 1 (800) 385-5290

Email:

  • info@westernfin.com

Key personnel:

  • Adam Seaver, managing member
  • Darren Voage, managing member
Theresa Houghton
About Theresa Houghton
Theresa "Sam" Houghton is a wellness consultant and freelance writer from Upstate NY. With more than half a decade of experience in the business world, Theresa understands the unique challenges small business owners face in highly competitive markets. Her experience with researching and writing positions her to provide solid advice and high-quality content on a variety of topics. When she's not writing or helping people get on track to better health, Theresa likes to read the Bible, play humorous card games and knit socks. You can learn more about Theresa's wellness consulting services at GreenGutWellness.com and connect with her on LinkedIn.

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