Payoff Letter
00:26 How Payoff Letters help
00:40 Step 1: Verify that you paid off the Lenders.
01:06 Step 2: Get or find the letter.
01:10 Step 3: Submit the Payoff letter at the same time you apply.
01:32 Step 4: Make sure the Payoff letter was received
02:30 State UCC Lien information and release
A Payoff Letter or E-Mail for a previous Loan proves that loan is paid off and has a $0 Balance.
Why should you get one? A new lender may not know if an old loan is paid off. If they count that loan as active, it will work against your debt to income ratio and may cause a decline.
Also, if you have payment problems or even a Default on a previous loan, proof of payoff helps because it shows that
you did pay what was owed, even if there were problems along the way. This is even more so true when your company has High Sales along with a Payoff Letter for Defaults.
Call 919-771-4177 for more info.
Payoff Letters For Business Loans (Video Transcript: Click to Expand)
How to use a Payoff letter after a Default. Welcome to Bankstatementloan.com. You defaulted on a Business loan and cannot get a loan or MCA.
Do you have Payoff Letters? Call us at 919-771-4177 if you do and we will help you get the business funding you need. To apply, click or Tap
on the Apply button, or on the endscreen of this video or call us at 919-771-4177.
Payoff letters prove that you got behind or defaulted but your business paid what it owed or paid a settlement amount. This is important to the lenders because it acts as a sign of proof that your business will pay them, even with derogatory business credit.
STEP 1
Verify that you paid off the Lenders. If you paid off an MCA Cash Advance or loan after a Default, then you should have gotten a
Payoff letter. Maybe the Funder did not send it to you. If not, call them and ask them to Email, text or mail it to you.
Or call us and we can help you with that process.
TIP
It is best to get a traditional letter style layout and sent to you as a PDF or jpeg.
STEP 2
Get or find the letter. Follow step 1 if you do not have it.
STEP 3
Submit the Payoff letter at the same time you apply. Provide all letters if there are multiple
MCA Defaults or accounts with a slow pay history.
TIP
Do not wait until you are asked for a payoff or settlement letter. Your business will probably be declined
immediately because the lender will see the default, but will not know if your business did payoff the loan or MCA.
STEP 4
Make sure the Payoff letter was received and reviewed as part of any decision. Call the lender after
submission or any decision to verify they reviewed they payoff information after you apply.
If they did not, any approval may be for a much shorter time and much less money.
Conclusion
Underwriting may make a loan or MCA offer if you have a payoff letter that proves you paid all defaults or an MCA with slow or missed payment history.
The offer will often be with longer terms and higher amounts. Use the power of the payoff letter to turn declines
due to a previous default into approval for your business.
Frequently asked questions
Why should I provide payoff letters?
It proves you did not avoid your loan or MCA debt obligations. You worked it out and paid what was owed. It will
also not leave your business in the same light as a business that did not payoff their default. That is worse.
Don’t they have records that prove the debt was paid?
No. The debt was between your business and just that one lender. There isn’t a database or public record that
proves you paid it off and what the terms were for any payoff.
Do the State UCC records showing a lien release prove I paid it off?
The State UCC records may not show the Lender name and it does not show any payment information.
We can help you with how to get the UCC lien removed at the State. Many lenders fail to remove the
lien with the State and future lenders think you still owe that debt.
To apply, click or tap on the apply button, or on the end screen of this video or call us at 919-771-4177.
END VIDEO TRANSCRIPT
Examples of reasons Payoff Letters are requested:
-
-
- A request to show other small business loans are paid off.
- A request to verify that a credit card is paid off
- A Letter showing that a similar type of loan has a zero balance and is paid off.
Many lenders want to make sure that loans are paid off before approving a new loan or a larger business loan. Get a loan with out one, apply below.
Did you know?
These are also called “Zero Balance Letter” and must say Payoff or Zero Balance.
Customers rarely have this document. Another reason is they also don’t like getting paperwork together and are unsure how to do it. Customers also see it as a burden that they do not have the time or desire to deal with.
How to Handle a Payoff Letter request:
If a Lender asks you to provide a Payoff or Zero balance letter, then find out which Institution it is.
If you have more than one loan with that institution, get the Account number to make sure you will be getting the information for the correct account. Once you have this information, call the customer service number for that Lender.Tell the Representative
what you need and they will transfer you to the correct department. Most Companies have specific Departments that handle this type of request. In most cases you will receive it in 2 to 4 hours.
If you have been asked for this type of Documentation, call us to discuss. Explain what you are being requested to provide. There are other Financing products that do not require this and other forms of verification. You can instead apply for other Financing options and avoid having to provide this type of Documentation.
FAQ
What is a Payoff Letter?
A payoff letter is sent by a lender showing the amount required to payoff the borrower’s loan by a certain date. It often shows how much the payoff increases each day or month when not paid by that date.
How can it help me?
It proves the total amount you owe to a lender. Without it, a new lender has to guess or estimate how much you owe. Lenders may offer less or decline your request without this information.
How do I get it?
Contact your existing lender and ask them to send you a payoff letter. Ask them to address it to whom it may concern and put a date through which the payoff is valid.
Learn more about other types of request for proof of Documentation such as
Proof of income.Recent examples from the Web:
Therapeutics Corporation entering into a Payoff Agreement and Letter.
-
Author Biography: Will Sanio, Owner of SCF Funding, dba bankstatementloan.com/, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.
Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.
Follow me and our Videos below!
VIMEO
YOUTUBE
LINKEDIN
TWITTER
https://developers.google.com/profile/u/willsanio
GitHub
StackOveflow
