Category: Ask 4 Funding - page 2

You have a brilliant idea for a business, you have the manpower to begin but now how do you go about getting the funding to sustain the business till it is bringing in revenue.  That is where unsecured business loans come into play.  An unsecured business loan will be available to you to draw on for the needs of the business as it flourishes like an open loan agreement up to a point.  Often times this type of loan is good for the start up cost involved in opening a new business such as; equipment, expansion or modifications of the existing office and advertising needs.

Going about acquiring an unsecured business loan is much like any other type of loan agreement.  The major difference is that you are now required to put up any collateral to secure the advance.   The great thing about this type of loan is that you are only accessed interest on the amount of the loan that is used.  So even if the loan is for twenty five thousand dollars if you only use five thousand, interest will only occur on five thousand.

In order to receive an unsecured loan many lenders will look into your business plan and the credit history of the business.  Of course, this is an issue if the business is brand new.  Lenders want to ensure that they will be able to recoup the lent funds.  It is imperative that your businesses credit score get established.  In order to do this you will need to make sure the outstanding payments the business does have are paid on time and in full.

Establishing a good business credit score can be done by taking out small loans with multiple lenders that report to the SBFE.  You can also establish a business credit history by using business credit cards and with your vendors and the lines of credit they establish for you.   Just be consistent with your payments and you will find yourself well on your way to establishing a credit history worthy of an unsecured business loan.

It takes time to get a small business, or any business for that matter off the ground.  With some strategic planning and a lot of hard work and a bit of luck you will be well on your way to establishing your dream.  Remember when starting out when you take off don’t let it go to your head.  Getting too big for your britches does not make you successful in business.  Work at a steady consistent pace to receive the rewards which you are working towards.

What do you do if you are a small business owner looking for some extra money?  Maybe it is around the holiday and you have slowed to a creep but you still need to pay your bills to keep the business running until it picks up again.  The answer could fall into your lap as a merchant cash advance.  It is not a loan from the bank it is a way that business owners receive capital now based on future credit sales.

With merchant cash advances you will find that the requirements to obtain one are not a stringent as if you were applying for a business loan.  Usually merchant cash advances are flexible with easier eligibility requirements than with financial institutions loans.  It is an accessible option to explore because you also don’t have to lay down specifically what the money will be used for within the business.

The cash advances are given based on your future credit business.  This means that in turn for capital now you give the merchant cash advance lender the write to debit you through your credit card processing company a percentage of sales, agreed upon by both parties, until the debt is paid off.  The nice thing about this is that payment is based on money brought in and not predetermined.  If you are having a slow business period it will take longer to pay off the cash advance where as if you are super busy the opposite happens and the advance is paid off sooner.

Often new business owners take out loans which require a set amount each month no matter what the business is bringing in.  It is hard to see a profit in a new business when all of your working capital is already hedged for loans.  Merchant cash advances allow for the great advantage to be paid back as you make the money.   The percentage amount that is determined to be distributed from the credit cards is predetermined and does not change of the course of the advance.

If you are looking for a flexible and easy to access way to get extra working capital for your company a merchant cash advance may be the way to go.  It is necessary with any financial business decision that you seek the advice of business partners as well as financial consultants such as your accountant.  They will help determine if this is a sound financial investment for you to make.

You will find that it has several key benefits over a traditional loan form a bank lender.  It is much quicker and easier to apply for and you are not required to supply the documentation you would have to with a loan.  It is also much easier to qualify for a merchant cash advance it is related more to your credit card processing history than your credit score.  Usually you can have an answer on your advance within three days and the risk is all on the company who advances the money to you.

Loans are so tricky.  Whether you are looking for a mortgage loan, a car loan, a business loan or a boat it can be hard to find a lender who has your best intentions at heart.  Often lenders lure consumers in with low annual percentage rate better known as APR and the promise of a loan quickly.  Most of the time when we are in the need for a loan we don’t have time on our side, perhaps a car died or you are in need of capital for a business debt.  It is usually under circumstances that you would jump to have the money fast and hassle free without really looking into the finer details.

This is of course not the suggested method of acquiring a loan.  You want to be cautious and perhaps a bit conservative when it comes to your loan company options.  It is best to be knowledgeable about the lingo the loan officer will use.  It is often a large commitment taking on a loan and often loans, like in the case of a mortgage, will be with you for an extended period of time.  It is imperative that you get the best deal for your financial situation.

How do you go about finding this mystery loan company you ask?  I would start first by doing internet research.  It is a great place to see what other consumers are saying about lenders and to get yourself a base knowledge about loan options related to your need.  Next I would talk to friends and family who may have recently been in your situation.  You can also contact the local business associations in your area for references.  It is a good place to see who has been around in the community awhile and how involved the company is with the patrons of the community.

I would not take a realtors advice on a mortgage lender only for the simple fact that they might be working together getting a cut of one another’s business.  It is hard to be impartial in a case where money is involved.  I would also look for car loans before you go to the dealership.  Don’t get caught up in the moment with an auto loan.  Often people can better interest rates when dealing with their own bank verse one supplied by an auto dealership.  Looking online is another method but I personally like the idea of sitting down face to face with someone to let my gut help guide me in big decisions such as a loan.

There are things you will want to investigate and compare before you sign on the dotted line.  Make sure all the options line up with your expectations always leaving yourself room to negotiate terms.  Look into the interest rate, loan repayment options, fees for processing your application and what the company’s policies are for early payoff and convenience fees in regards to how you repay the loan.  When all the start align and you are pleased with the deal that you have been offered than you will feel confident not only in your purchase but the loan that you have secured to make the purchase.