Hi all….. Being a financial consultant I am usually flooded with the inquiries regarding funding process, especially for small businesses. I am surprised by the lack of awareness in most of the people making inquiries; mind you some of them are very successful at what they are doing.
It seems there is some sort of uneasiness amongst the small business owners who are seeking either capital loans or working capital loans. May be it is those power suits………
Never mind………….The process is very smooth, provided you are well prepared and well informed. Through this blog, I will discuss different aspects of process involved in small business funding.
To start with, let’s discuss the types of loan and funding options available:
Long Term loans are the most common loans. They are mostly used as a capital funding source. Repayment is monthly over a term agreed.
Short term loans are for both capital and working capital finance, and are to be repaid in one year or less in a lump sum at the end of the term, instead of monthly.
Loan against equipments is easier to secure. The equipments bought through the funds are the direct collateral for the loan. Used for capital expenses only.
Credit lines are generally for working capital funding. Instead of granting the full amount of loan, a certain amount per year is loaned.
There is one great option other than going for loans from banks and financial institutions: availing business cash advance.
The cash advance is to be repaid from the credit card sales that the business does in a specific period, usually through automatic debit. Organizations like Merchantcashdirect provide such cash advance.
In my next posting I will discuss the financial institutions providing loans, and essentials of a good loan application.
Posted by antonyeldwin 
