Business Loans

Obtaining capital in this “tight money market” is easier said than done these days. As more and more banks go belly up, lenders are increasingly making it more difficult to obtain capital. I will show you how it is possible, even in this market, to obtain unsecured business funds without having to show business bank statements, tax returns, balance sheets, profit and loss statements, etc. Although you won’t need any financial documentation, you may need a simple business plan.

Make sure when you are working with a lender that you pay absolutely zero “upfront fees” or “application fees.” Applying for business capital should not have to cost you anything up front. Most lenders should charge their fees from the “back end” (proceeds of the line of credit). Keep in mind that most unsecured “no doc” business loans will come with a higher price tag than one that is secured and is “full doc” (bank statements, business tax returns, etc.). Reason is pretty simple; funding unsecured, no financial business loans poses a higher risk to the lender. read more »

photo credit: norhendraruslan

Last week I conducted an exploratory marketing session with a new business owner. One of the topics that came up was how tough the credit crunch has made it for businesses to get financing. And that got me thinking…

For several years I’ve championed the concept of growth through leveraging marketing assets. Assets that already exist within companies. This approach frees the business owner from worries that come from having to ‘beg’ a banker for money. And there’s no need to give up a portion of your company to venture capitalists either.

If you have an existing business, the easiest way to increase your operating capital isn’t to go get more loans. Business finance should be your last option. Most people balk at this thought. This is a mindset problem. I know. I worked in banking for ten years. The idea of leveraging marketing assets never occurs to business people. They have been conditioned to think the money must come from someone else. read more »

photo credit: MTN_CompanyThe sky is falling! Run for your life! The banks aren’t lending! Well, the first two might be correct, but the last one is not. Commercial banks are lending, but they are very picky.

Private lending practices are known for being very forgiving and very sloppy. One needs look no further than the current financial mess to realize as much. Banks were handing out money to pretty much anyone who asked for earlier this decade. The result? An overheated housing market that finally collapsed and is even now taking down banks right and left with it.

Commercial banking is a part of the financial industry that bears little resemblance to personal finance. In fact, about the only common factor is both have the word “banking” in them. Other than that, the process of successfully applying for a loan is very different. Regardless of the type of commercial loan you are seeking, there are always four basic components you need to be strong on. read more »

photo credit: karpov the wrecked train

Many businesses are finding it difficult to secure funding. Most banks are not lending money to businesses that don’t have exceptional credit and large amounts of collateral. There are a few new programs available to business owners that can’t find funding through traditional avenues.

The first program is a Merchant Advance, this is based on your credit card receivables. Generally, you can expect an advance of 125% of your monthly credit card sales. For example, you do $10,000 a month in credit card sales, your advance amount could be up to $12,500. With a $12,500 advance, your total pay back would be around $16,500. The terms vary from six months to one year. You will receive the cash in around 7 business days. You will more than likely have to switch your credit card processors, but most companies will meet or beat your current processing fees. Since this program is based on your previous sales there is no collateral necessary, and bad credit is not an issue. The amount available with this program is $5,000 to $300,000 per location. read more »

photo credit: gcoldironjr2003

I am frequently approached by business owners seeking financing for their companies. It’s become a love-hate scenario. I love it because that’s what I do, arrange financing for small businesses. I don’t enjoy it as much when I soon realize that the business owner often doesn’t know why they need the money, how the money will help their business, or if they can afford to take a loan.

I’m surprised at the number of business owners that haven’t taken the time to determine how they plan to use the money. Most of them believe they need to do more marketing or buy more equipment, but they haven’t figured out their estimated return on investment or what they really expect to get in the end. There are 3 quick planning and analysis steps every business owner should perform before seeking to take on a loan or other commercial financing:

1) Analyze your current situation to determine the problem you’re trying to solve. This may differ for start-ups versus established businesses. As a start-up, you may be seeking financing to lease equipment to get the business operating or advertising dollars to notify your target market they need your product or service. read more »

photo credit: norhendraruslanA working capital loan is a form of business loan that is commonly allocated to support the daily operations of a business or buy earning assets. This source of funding is often sought when the net working capital is deficient. This circumstance results from a low or even negative figure when the existing liabilities in the form of accounts payable are subtracted from the current asset comprising of accounts receivable and inventory.

For most businesses, their objective in acquiring a working capital loan is to make sure that the business operations are continued until such time that the cash flow coming in is sufficient enough to accommodate the upcoming operational costs as well as the maturing short-term debt.

Working capital loan is ideal for whatever business situation whether an emergency crisis or pursuing a new venture for development. It poses as a great option to come up with a quick source of funds. When you have already decided that a working capital loan is right for you, one thing to learn about it is that different traditional financial institutions may refer to it in varying terms or it comes in different forms such as: read more »

photo credit: ItzaFineDay

There are several ways to obtain funding for your business; the most common lender is the traditional bank, credit unions and private loan companies or capital companies. Through these types of lenders, business loans must be secured. This means using your personal assets as guarantee (collateral). Business loans are very risky because there are fixed monthly payments that don’t change, even if your sales go down, besides the application process is very complicated and it takes a long time until funding occurs, that’s assuming you even qualify, as the lender will require credit scores of over 750.

Banks may also ask that a business have a co-signer or guarantor. This means finding a financial partner or even checking into the various types of small business loans that the government offers as help to small business owners. Minorities and women certainly have a wider selection of companies willing to loan them working capital. The Minority Business Development Agency (MBDA) read more »

photo credit: norhendraruslan

Most business owners are told by bankers and other “financial advisors” that they will have to qualify for their business credit line based on their personal credit score and that they will have to personally guarantee any credit extended to their business, especially if it is a new business.

That is not true.

Understand that there are three business credit bureaus just as there are three main personal credit bureaus. In fact, 2 of them, Experian and Equifax are the same ones who handle personal credit. But the third is actually the most important, Dun and Bradstreet.

When you apply for a loan, lease, mortgage or credit terms, lenders and suppliers will usually start by looking at your D&B “Paydex” score.

The Paydex score is like a FICO score for your business. It shows how your company has paid its bills over the past year or so. read more »

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Aged Shelf Corporations & ELOC’s can help protect & grow your businesses in many different ways.

1. Owners should convert existing personal businesses into corporations

2. Establish corporate history, trade lines, and protect personal credit and assets.

3. Owners want to establish business trade lines in the business name instead of using there personal credit or loans.

4. Business has grown or wants to expand out side of local area, vendors asking for personal guarantee or company Duns Number for validation.

5. Owners or entrepreneurs want or need to acquire larger corporate credit lines, Credit card lines of credit, and bank loans to finance a variety of small to mid-size businesses necessities.

6. There are a million different reasons why owners & entrepreneurs need aged corps

Do not waste time building corporate credit if your plan for funding is now. read more »

photo credit: TheTruthAbout…

Even if you might have less than a perfect credit rating, you can still find unsecured credit lines and business finance.

A good credit score is important, especially if you run a business as it can affect your personal score when you look for a loan from a bank. Unsecured business financing can seem like a nightmare to find, but if you know where to look it need not be.

Do not suffer the trauma of being turned down for business loans when you do not have to?

A good relationship between you and your vendor is vital to the success of your business. When you have been given a line of credit with a supplier, treasure it and keep to the terms. Having a line of credit can make the difference between sinking or swimming. When you have bad credit it can be very difficult to find any vendor who will work with you and give you a line of credit. How are you supposed to run your business when you cannot get a line of credit through any vendors? Maybe you just aren’t looking in the right places for the right vendors. Unsecured business loans are available if you know where to look. read more »