Archive for June 28th, 2010
A Small Business Loan Alternative for your Growing Business
Financing a small business can be a difficult job if no one is willing to spend money on what you’re selling. But in order to stay afloat, business owners go for the option of applying for small business loans. A business loan can give you more leeway to purchase new supplies, pay off debts, or expand your business.
However, more banks nowadays are enforcing stricter rules and guidelines for giving out business loans. Policies on approval of small business loans are now less lenient and some banks have even demanded additional requirements.
A bad credit history is one important criterion for the approval of a business loan. Like each other bank or lending institution, risk factors have to be taken into consideration before they hand you their money. The credit card services you have availed and how you paid these services are very important information for these companies because it will be their basis on the approval (or disapproval) of your request, and the rate of interest they can give you. You need at least 700 points to securely get approved.
Fortunately, there is now an easier way to get a small business loan without the fear of your own credit card history. Getting a business cash advance is a faster and less stressful option for a business loan. A business cash advance is a lending service offered to business owners who accept credit cards as payment for their goods or services. This substitute form of business loan has a shorter processing time and has lesser stipulations than a bank loan. This type of small business loan is quite perfect for those emergency situations where you need a massive sum of money, fast. Approval of a business cash advance usually only takes 24 to 72 hours, depending on the company. Upon approval, the money is automatically transferred to your individualized account. This fast-paced business loan is usually applied for online, which is very convenient.
Getting Small Business Loans with No Collateral in this Recession
The global financial crisis has prefabricated it quite difficult for companies, especially small businesses, to get business loans. Ironically, it is also in this situation that smaller companies often need additional capital infusion to boost income. You might need to get small business loans to acquire a superior business location, construct a new building, renovate your premises, pay for new equipment, fixtures or furniture or increase inventory and working capital.
Most Small Business Loans Require Collateral
To get business loans, even small business loans, is a major challenge.
First you need to refer which among the many types of small business loans you need. Small business loans ranging from $5,000. 00 to $35,000. 00 are called micro loans. For larger needs, such as for the acquisition of land, buildings and other major fixed assets, development financing is what you should find. There are also import export loans as well as franchise financing. Do your research to find out if you are eligible for small business loans guaranteed by the U. S. Small Business Administration or SBA.
Any of these small business loans will require extensive preparations and paperwork. As a small business owner, you will need to establish your credit worthiness through a individualized credit history report. Lenders will also require a business plan which includes your credentials as the business owner, your company financial statements, business assets and an analysis of your market. All of these should be packaged in a professional loan proposal which presents how the loaned amount will be used to strengthen the business and how you intend to repay the loan. Most of all, you need to present your loan collateral – the assets you will place up to secure the loan.