RSSShort Term Business Loans – A Synonym to Speed and Convenience
May 03
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If your business requires the financing of additional inventory or a high volume of accounts receivable, a Short-Term Loan may be the ultimate solution.
Short term business loans enable people to secure cash from market to start a new business or just to boost up the existing one and the help is provided to him for a short duration of time.
You can take these loans in two forms – secured and unsecured. In case of secured loan you have to pledge collateral against the money and this will help you to get the interest rate reduced by a certain degree. But with unsecured ones you do not have to put your property at risk and you get the money at no cost at all. These loans are basically short term loans which do not require any collateral. Under the loan program a borrower is entitled to borrow amount in the range of
Can I Still Get a Business Loan If My Credit Isn’t Great?
Nov 23
Business Loan Abundance, Business Cash Advance, Business Endeavors, Business Financing, Business Funds, Business Loan, Business Loans, Cash Advances, Cash Flow, Credit Card Statements, Credit Score, Credit Scores, Lenders, Loan Repayment, Midst, Personal Credit History, Sales Business, Score Business, Small Business Owners, Traditional Business No Comments
How do I get a business loan if I don’t have the best credit score? This is a question that resides in the heads of various small business owners. There is an abundance of small business owners who need money to finance business endeavors, but have not been able to obtain this money because their credit scores are not as high as lenders would like.
Even though it may seem like one has to have impeccable credit to receive a loan, there is still hope for business owners with not-so-great credit who need business funds. So what is it that these small business owners can do to receive business financing while in the midst of improving their credit scores? It is called a business cash advance and it is a source of business financing that relies on the business’s cash flow for loan repayment.
Instead of looking at your personal credit history, and evaluating your credit score, business cash advance lenders look at your business’s history, reviewing your business’s most recent credit card statements, and finding your business’s average monthly credit card sales.
Business cash advances can be used for whatever your business may need, without restrictions. And unlike traditional business loans, a potential borrower does not need to thoroughly explain to a lender how the loan will be used.
The steps and the time between applying for your business cash advance and having your bank account funded are very few. First, an applicant must complete a short application and provide lenders with documentation of their business’s most recent months’ credit card sales. Then, a funding specialist will review the application and documentation, and determine how much money can be advanced. Once the applicant agrees to accept the deal, the account of his/her choice can be funded in as little as ten business days.
Now, the question is no longer, “Can I get a business loan if my credit isn’t great?” but, “How soon can I get my business cash advance?” Requirements do not need to come in between you and business financing, and the sooner you contact a lender and complete an application, the sooner you can have the money your business needs.
Your Bank and Business Financing ? Reality Check
Sep 03
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Business owners and managers want to compare equipment finance companies to their bank and for a good reason; a bank is a company’s first point of reference when borrowing money or financing equipment or an expansion project. A bank is the most obvious place to start and a secure place to store your money and use their multiple services. But what a bank does not do well, both historically because of their structure and the recent tightening of the credit market, is offer business financing for capital assets (equipment). Yet many people get confused when looking for an equipment loan because they are not seeing the whole picture; this is a case where you definitely want to compare apples to apples to get the best results.
Here are a few points to compare; these are not set in stone but based on years of experience, these trends apply a majority of the time.
1) Total Dollars Financed – banks normally require that you keep a balance of 20% or 30% of the equipment loan amount on deposit.
This means they are only financing 70% or 80% of your equipment costs because you have to keep a certain amount of YOUR money in a fixed account for the duration of the loan. In contrast, an equipment finance company will cover 100% of the equipment including all “soft” costs and will only request a one or two month prepayment. No fixed deposits required.
2) Soft Costs – banks also will normally not cover “soft” costs like labor, warrantees, consulting and installation which means these costs come out of your pocket. An equipment finance company will cover 100% of the equipment price including “soft” costs and some projects can be financed with 100% “soft” costs which no bank would ever consider.
3) Interest Rates – this is the most popular question in the finance world; what’s my rate? If the bank requires 30% deposit in a fixed account then that automatically raises a 5% interest rate to a 20% rate.
Now people will argue that you get that deposited money back at the end of the term but that is money which you do not have access to and has an opportunity cost associated with it. Equipment finance companies target their financing rates between 3-5% for cities and 7-9% for commercial financing which is a real fixed rate and not under-stated as the bank rates can be thus independent finance company rates are very competitive with “true” bank rates.
4) Process Speed – banks often take weeks to review and approve a finance request while independent finance companies normally only take a few days and can work much more quickly. Finance underwriters only review business financing while a bank has other types of requests clogging their channel.
Banks also have many more levels of approval and review to pass while independent finance companies normally only have two, underwriting and credit committee. Even with complicated deals, the finance company’s process is always faster.
5) Guarantee – banks require, as a standard part of their documentation, a blanket lien on all assets, both personal and business assets are used as guarantee against default on the loan. Your business assets, your home, your car, and your boat can all be on the line when entering into a bank transaction. This may also be the case with an equipment financing company but if your business operation is solvent then only your business will be listed as collateral and not your personal assets; this is known as a “corp only” approval.
6) Monitoring – banks require yearly “re-qualifying” of all their business accounts which means on the anniversary date of your loan each year, you must submit requested financial documents to assure the bank that everything is going well and nothing has affected your business in a negative way. Finance companies do not require anything during the term of the loan or finance as long as the monthly payments are made on time. Nobody will be checking into your business or policing what you do.
When comparing your bank financing to an independent equipment finance company, you have to make sure you are evaluating all the key parameters, not just one. Clearly, the fine print and terms of the transaction are more important than the big numbers. Banks work well within their space but have proven time and again not to be as flexible or solution-oriented as an independent finance company which solely focuses on business lending can be.
How to Get a Business Loan Fast
Aug 28
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Regular Financing Options
When it comes to business finance, there are many flexible options available such as leasing, factoring, regular loans, etc. However, all these options lack the attribute that we are discussing in the present article. Though sometimes all the above are the cheapest options for financing equipment purchases, manufacturing and internal or foreign sales, the truth is that they fail to provide a solution when time is an issue.
If you are about to complete a good deal and a machine broke up and you lack the funds for repairing, you can’t wait for a leasing contract to be signed in order to replace the equipment and if the delivery is close enough, you probably won’t have enough time to request a regular business loan either.
Fast Options for Business Finance
There are mainly two finance alternatives when time is an issue: Fast Business Loans and a Business Line of Credit. Which one is the best choice depends on many factors such as: time available, amount needed, recurring, credit situation, income expectation, etc.
Fast Business Loans require no long credit verifications. The money you need can be obtained quickly with little paperwork. However, further paperwork and credit checks may be needed after the money is delivered in order to close the deal on better terms. Business Lines of Credit on the other hand, take more time to be approved. But once you’ve a line of credit agreed, you’ll be able to borrow the money you need at any time, return it the way you want (with certain limits) and borrow more money as many times as you need it up to the credit maximum.
As regards to the amount, business lines of credit will provide you a smaller amount than regular business loans but higher amounts than fast business loans. Moreover, business lines of credit provide a recurring source of money which eliminates the need of applying again whenever you need more cash.
Approval for both types of loans is determined by the business’s credit situation. However, fast business loans have fewer requirements than business lines of credit. Nevertheless, approval ratio is high enough for both kind of loans and unless your business has had mayor financial delinquencies in the past approval is almost a certainty in both cases.
The Interest Rate charged for fast business loans is higher due to the fact that there are not so many requirements and fewer credit checks. This implies a greater risk for the lender that is compensated by higher rates and higher costs. However, the difference won’t be more than 3 or 4 percentage points.
Finally your income expectations will also determine which loan option is best for you. Given that fast business loans carry higher interest rates and fixed monthly installments, unless your current and future income guarantee that you’ll be able to repay the loan, you will probably do better with a business line of credit that offers more flexibility when it comes to the repayment plan.
Unsecured Small Business Loans Can Jump Start Your Business
Aug 17
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Unless you were born wealthy, or struck it rich in the state lottery, you have probably been cash strapped at one time or another while running a small business. If you are a daring businessperson, maybe you enjoy running things by the seat of your pants. But a lack of cash can make you pass up on opportunities to make your company live up to its full potential. You may have to pass up on new equipment, hiring an employee, or extra advertising. These investments could provide a great return on investment, providing you with more profits. But if you do not have the cash to make the investment, the opportunity will pass you by.
But is that the way it has to be? Could you find a lender to invest in your company? Maybe your business is new, and so you have not had a chance to establish credit. Or maybe you have been late on some payments, and since your credit has a bad rating, you do not think anybody will give you a second chance. However, you did not start your own business by being a person who gives up or lets opportunities pass you by. Maybe it is time for you to reconsider your opinions about business financing.
In fact, I let my own business stagnate due to a tight cash situation. I had a profitable paid search advertising campaign, but I set the daily limit to a low level because I needed to fund it, and I had to wait until the next month to collect revenues. Since I limited my daily budget, I also limited the website traffic I could convert into sales! Since I limited my revenue by the limit I could afford for my advertising campaign, it seemed as if I was in a situation where I could never catch up and maximize the profits from my website. When my daily budget ran out, my competitors were collecting the visitors and sales that I could have had.
I finally searched for business financing. I did not need a lot of credit, but just a few thousand dollars so I could step on the gas on my sales. However, since I had never gotten any outside money for my business, I did not think I could qualify. Since I ran an internet business, I searched the net for business financing, found an online form, and was very happy to be able to apply in just a few minutes. To my surprise, I was approved! Since the funds allowed me to turn up my advertising, and also my returns, I managed to pay off the loan in a matter of months!
If you are a small business owner, do not let that next opportunity pass you by. Your business life does not have to be that difficult when you can find lenders who are willing to invest in you.