Every business owner who has ever tried to get a business loan knows how difficult it is to get the money out of those banks and financial institutions. Surprisingly enough, these same people don’t need to be coaxed for a personal loan even if you are going to spend all that money for a pleasure trip or buying a car, but if you are looking for a business loan that is likely to give you a good ROI, you need to fulfill a bunch of criterions to qualify. One of the prime criteria for getting a business loan is to have a good credit score and unfortunately over 92% of the American population does not qualify for a business loan including the Small Business Administration (SBA) Guarantee Loan Program.
Credit Score is just the tip of the iceberg, even if you have a good credit score, you will have to provide the bank with financial statements, audited tax returns, business plan, a personal guarantee or collateral and meet other regulatory requirements set forward by the financial institutions.
Most banks would not even consider offering a business loan if you are
a) New in business
b) Have low credit score or no credit or credit problem
c) Do not have enough collateral
d) Need under $100,000
Also a business loan brings with it the liabilities of making monthly repayments of fixed amounts.
While it is so difficult to obtain a business loan, it becomes pretty easy to get some funding if you opt for a business cash advance. A business cash advance company would offer cash even to people with relatively low credit score. Most business that accepts credit cards and are in business for more than 2 years qualify for a business cash advance. A business cash advance is similar to a factor company except for the fact that it uses your future credit card receivables instead of business-to-business receivable invoices.
A business cash advance does not require a personal guarantee or a collateral neither is there a fixed monthly repayment schedule. Business cash advance is repaid automatically through Visa or Master card sales. A business cash advance is a much easier option compared to business loans. A cash advance provider would not take equity ownership of your business and you are free to use the money for any business purpose you see fit.
As the cash advance provider gets paid only when you sale and get paid, it is more of an investment to them. The repayment of your business cash advance follows the revenue trend of your business and your cash sales are never used for repayment. This ensures that it is never a burden for you to repay the cash advance.
If your business needs an injection of cash flow it is time you apply for a business cash advance and start enjoying the financial stability.
This article is written by Ray Smith, a marketing expert with years of experience in different industries and specialized knowledge on branding and Internet marketing. Business cash advance [http://1rstfunds.com/Business-Cash-Advance.php]
Business Loan FAQ:
Question: What is the key to getting a business loan?
I’m writing a business plan, and i want to know some key steps to make sure I get the loan. I know that I have to have good credit, but that’s about all that I know.
Answer: A clear business plan, that has all the elements, sales projections (good, okay, bad, three cases), SWOT analysis, projected revenue for first 3-5 years, anticipated loan for each phase and repayment, market analysis, and so on.
Question: What are the general requirements for business loan?
Answer: The basic requirements for business loan are: You should have own the business for at least six months, you should have business processes at least $3,500 in monthly credit card sales, the owner should not have unsettled bankruptcies, you should also have at least one year remains on business lease.
Question: I’m 20 yrs old and I want to start a business. Do you think I should get a loan or go princes trust?
I have spoke to the bank and they said I have to bring in a business plan but I am in the process of doing this. But when I spoke to Princes trust the process seemed so long winded! I would like to get the business started in a month.
Answer: Realistically, it takes longer than 4 weeks to get a business up and running. It took a team of 6 of us 3 months to get a business from concept to trading and that was working quite intensely.
Contact your local Business Link and go on one of their free starting in business seminars. That will take you through all the things you need to know. You’ll also be assigned an advisor who gives you free advice on taking your ideas forward. They’re very good on business plans and they also help a lot with sorting out the appropriate sources of funding.
Be clear about what kind of business you want to start, who it’s for and how you’re going to reach them. You’ll also have to explain in your business plan how you’ll repay any loan that you get.
Question: Where can I get a small business loan?
I need a small business loan for $1500.00 I don’t know if banks usually give out loans that small of an ammount. Is there any institutions that would help me out with this? I don’t want to get any credit cards. Also my credit isn’t the best. I know that with this business I can make the $1500.00 back in six months.
Answer: Go to the bank. If they won’t give you a small business loan perhaps they will give you a line of credit.
Question: If a person has money but no collateral how do they secure a business loan?
For example, I have $20,000 and I’m trying to secure a business loan for $100,000. I don’t have “collateral”…can I “put up” my money against it, or do I purchase something worth $20,000, or how do I go about “using” my 20k to secure the other money I need?
Answer: You can use your $20k to secure a larger loan, but unless you have spotless credit and a long credit history, you probably won’t be able to borrow $100k with only $20k as collateral. Talk to your banker and ask about keeping the $20k in a separate account called a “compensating balance” account.
Question: Am I eligible for a Business loan?
I need to get a loan for approx $100,000. I am currently on unemployment but have excellent credit. I want a career change and I have a business plan written for my up and coming boutique. Would the bank consider me or do I need an income when I apply for the loan?
Answer: Unless you have a house that you are willing to put up against the loan AND a co-signer, you will never get that kind of money being on unemployment. Even then, you will have a VERY hard time even finding a bank to dish out that kind of money.
Question: How can a business owner advocate the federal government to expand the SBA Community Express Loan program?
This loan program is a “pilot” meaning that the number of loans that can be made are limited a percentage of the total SBA loans approved. My business assists small business owners and this is an excellent program to get credit to business owners but it doesn’t have a champion!
Answer: You need to contact your local Representative and your two Senators. Provide them with as much information as you can to support the extension and expansion of the program. If possible, get testimonials from small businesses that have used the program successfully as well as get other small business owners to write to their senators and rep supporting the program. The more people you can get to have their voices heard, the better your chances – remember that you are competing for scarce dollars against other program people deem worthy.
Question: Where would I find a small business loan or grant in British Columbia without a magnificent credit score?
Answer: There are government programmes designed to help start up businesses and The Business Development Bank of Canada is a lender to small businesses that might have difficulty getting traditional bank funding. Check the web sites for BD Canada and the government of B. C. Depending on your location there may be incentives to start a business you could check on with your local municipal business development department.
It is very important to a lender to know how prepared the borrower is and what they plan to do with the funds borrowed. I strongly recommend you prepare a business plan before you approach anyone for a loan. The big banks have excellent web sites with instructions for preparing a business plan and advice for applying for a loan.
By the way, it will be more difficult to obtain a loan from any lender if your credit record is poor. Best advice is to acknowledge past problems and what you are doing to improve your record.