Signing the Contract: What You Need to Know

Once you’ve accepted a funding offer from FundLocal, the next important step is signing the loan contract. This contract legally finalizes the terms of the agreement and outlines your responsibilities as a borrower. Signing the contract is a straightforward process, but it’s crucial to understand the details before moving forward. Here’s a guide to what you need to know when signing the contract.

The loan contract is a legally binding agreement between your business and FundLocal, outlining the terms and conditions of the funding. It includes important information such as the loan amount, interest rates, repayment schedule, fees, and any other relevant terms.

By signing the contract, you agree to:

• Receive the approved funding.

• Repay the loan or line of credit according to the specified terms.

• Abide by the conditions set forth in the agreement.

Before you sign, it’s important to carefully review the contract to ensure you understand all of the details. Here are the key elements you should focus on:

1. Loan Amount

• Total Approved Amount: The contract will specify the total amount of funding that has been approved for your business. Make sure this amount aligns with the offer you accepted.

2. Interest Rate

• Fixed or Variable Interest: The contract will outline the interest rate that will apply to your loan. This could be a fixed rate (remains the same throughout the loan term) or a variable rate (may change based on market conditions). Make sure you understand how the interest will be calculated.

3. Repayment Terms

• Repayment Schedule: The contract will specify when and how you need to make repayments. This typically includes the frequency of payments (e.g., monthly, weekly) and the duration of the loan.

• Payment Amounts: The contract will detail how much you are required to pay in each installment. Ensure that the repayment amounts are manageable based on your business’s cash flow.

4. Fees

• Origination Fees: Some loans may include origination fees, which cover the cost of processing the loan. These fees will be outlined in the contract.

• Other Fees: Be sure to review any additional fees, such as late payment fees or administrative fees. Understanding all the associated costs is essential for managing the loan effectively.

5. Collateral (If Applicable)

• Secured vs. Unsecured: Some loans may be secured by collateral, such as business assets or equipment. If your loan requires collateral, this will be clearly outlined in the contract. If not, it will be an unsecured loan, meaning no collateral is required.

6. Prepayment Options

• Early Repayment: The contract may include details on prepayment options, allowing you to pay off the loan early if desired. Review whether there are any penalties or fees for early repayment, or if there are incentives for paying off the loan ahead of schedule.

Once you’ve reviewed the terms and are ready to proceed, signing the contract is simple and efficient. Here’s how it works:

1. Electronic Signature

• Paperless Process: FundLocal allows you to sign the loan contract electronically, making the process fast and convenient. There’s no need to mail documents or visit an office.

• Quick Completion: You’ll receive a link to access the contract online, where you can review the details one last time and provide your electronic signature.

2. Verify Your Identity

• Identity Verification: In some cases, FundLocal may require additional verification to confirm your identity before finalizing the contract. This could include submitting a copy of your government-issued ID or completing a security check.

3. Confirmation of Signature

• Confirmation Email: Once the contract is signed, you will receive a confirmation email with a copy of the signed agreement for your records.

• Keep a Copy: It’s important to save or print a copy of the contract so that you can refer to it if needed throughout the life of the loan.

Signing the loan contract is a critical step, and it’s important to ensure you’re fully informed. Here are some key considerations to keep in mind before you sign:

1. Understand the Repayment Obligations

• Review the Repayment Schedule: Make sure you understand the frequency and amount of payments required. Consider whether your business’s cash flow can comfortably cover these payments.

• Budget for Repayments: Ensure you have a clear plan for making timely payments to avoid late fees or defaulting on the loan.

2. Clarify Any Uncertainty

• Ask Questions: If anything in the contract is unclear, don’t hesitate to reach out to FundLocal’s support team. It’s essential that you fully understand the terms before signing.

• Check for Flexibility: In some cases, there may be flexibility in the repayment schedule or other terms. If needed, inquire about whether adjustments can be made to better suit your business’s needs.

3. Know Your Penalties for Late Payments

• Late Fees: The contract will outline the consequences of missing payments, such as late fees or other penalties. Be sure to understand the impact of late or missed payments and make a plan to avoid them.

4. Assess Early Repayment Options

• Prepayment Penalties: If you anticipate that you may want to repay the loan early, check whether the contract includes any penalties for early repayment. Some loans offer flexibility in prepayment, while others may charge a fee.

5. Plan for the Future

• Build Your Credit: Successfully managing and repaying your loan can help improve your business’s credit profile. Timely payments can position you for better financing options in the future.

Once the contract is signed, the final steps in the funding process will occur quickly. Here’s what you can expect after signing:

1. Verbal Verification Call

• Confirm Loan Terms: After you sign the contract, you’ll participate in a verbal verification call. This call is to confirm that you understand and agree to the terms of the loan.

2. Fund Disbursement

• Receive Funds: After the verbal verification is completed, the funds will be disbursed directly to your business checking account. In most cases, you’ll receive the funds within one business day.

3. Begin Repayments

• Repayment Schedule: You’ll begin making repayments based on the schedule outlined in the contract. FundLocal provides flexible payment options, and our support team is available to assist you with managing your repayment plan.

At FundLocal, we prioritize transparency and flexibility to ensure you get the best funding solution for your business. From the initial application to signing the contract, we guide you every step of the way, offering clear terms and ongoing support.

If you have any questions about signing the contract or need assistance understanding the terms, feel free to reach out to our support team. We’re here to ensure that the process is seamless and that you feel confident in your decision to move forward with FundLocal.