Business Loans

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Running a business is not an easy task and the need of financing is a must. However, a business owner wants a cheap source of financing and not rates that eat up all revenue. Unsecured lines of credit are either too expensive or not available for small businesses. Thus, if the business does not have sufficient assets the owner may have to use his own personal assets. Fortunately there is another solution to secure a loan for your business: the use of the business’ income.

Your business may produce money but it probably does not do so at the rate you want and with the exact timing you need. That is why all businesses need some sort of financial source and secured ones provide a cheap source of funds. There are loans and lines of credit provided both by financial institutions and banks that can be secured with the company’s income in different ways and that can provide all the financing your business needs.

Bank Or Financial Institution Line Of Credit

Your current bank or any financial institution can provide you with a line of credit or a loan based on read more »

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 »

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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 »

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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 »

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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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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 »

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Collateral – A borrower’s asset that is given up to the lender if the borrower is unable to pay back the principal and interest on the loan; making the lender the new owner of the collateral.

Credit Score – A numerical expression based on the analysis of a person’s credit files, to represent the perceived likelihood that the person will pay debts in a timely manner.

These are two terms that one must be familiar with when contemplating a business loan, simply because banks consider both of these when determining whether or not to approve the loan. Many small business owners may not have one or the other (sufficient collateral or a high credit score), leading them to search for unsecured business loans, which only require borrowers to posses one of these requirements.

An unsecured business loan is a business loan that is not backed by collateral. In most cases, this leaves unsecured business loan lenders to rely solely on the borrower’s credit rating. Collateral serves as a means for the lender to get back the money that they have lent, should the borrower default on the loan. It is a back-up plan for lenders to make sure that they get their money back no matter what. read more »