Want Funding For Your Small Business, Well…Options Galore

In my last posts I discussed the types of loan, funding options available, and documents essential for the successful loan application. Now I will discuss the financial institutions providing small business funding.

You should approach your bankers first to apply for a commercial borrowing. You and they have worked together. The resultant familiarity will go a long way in mitigating doubts and insecurities. Also banks charge less for commercial loans than others.

But banks are a little more circumspect, and stickler of rules and guidelines regarding the borrower.

There are quite a few other types of business lenders. The main separating factor is the type of loans they offer: secured or unsecured loans.

Banks usually deal in secured ones, while independent financial organizations favor unsecured loans more. These independent financial organizations are ready to take more risks on startups and smaller businesses than banks. Often they look for particular industries, types of loans, or business sizes.

There are a third kind of lenders who mostly provide working capital funding. These lenders offer business cash advance.

The cash advance will 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.

Small Business Loans…How Not To Bungle

In my last post I discussed the types of loan and funding options available. Now I will discuss the essentials of successful loan application for small business funding.

Applying for the commercial credit demands a lot of preparation documentation wise. The thoroughness and accuracy of the documents are absolute musts for successful borrowing, so it pays to prepare them carefully. Some of the must have documents are:

 

• Financial statements: balance sheet, profit and loss statement, and tax returns of the company
• Personal financial statements and tax returns for last three years
• Cash flow estimates on the monthly basis
• Comprehensive business plan
• Precise loan utilization detailing
• Profiles of decision making people i.e. top management

Before actually going to the banks or any other financial institution don’t forget to have your financial documents reviewed by a qualified accountant, certainly in case you require capital funding.

You can avoid all those cumbersome paperwork if you just want working capital funding. In this case you can opt for 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.

Know your Basics- Types of Loans

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.