Business Loans

The banks have virtually shut down, especially commercial lending. They may as well hang an out of business sign on their door, but should probably ad the following; we are out of business because we do not believe in our economy at all. Why else would they refuse to lend?

A very good business man I know, who has already had a small SBA loan and has paid flawlessly over many years. He has an excellent credit score, in the 700’s, his business is and has been profitable and is growing monthly both gross revenue and profitability, he has adequate collateral and he wants to borrow a significant amount to purchase another profitable business heavy with assets to merge into his own. It is a natural deal, perfect in every way. No real risk.

I sent him back to his bank and suggested he seek another SBA guaranteed loan, and with a 90% guaranty, how could he be refused.

He actually was not refused; his bank simply said we are not doing any lending so thanks but no thanks. He went to another two banks and heard the same story. Not even interested in an application, unmotivated by a 90% guaranty, high collateral value and the other benefits this borrower brings to the deal.

It amazes me, how could they just go out of the lending business even with 90% guarantee from the SBA?

So this deal will not happen, yet, we continue to search for a bank still in the lending business.

What to do he asked me? I thought very briefly and gave him the only answer available.

It must be done with seller financing and a wrap around note. In other words, the seller must keep his financing in place; my buyer will step into the sellers LLC and pay the note as well as an additional note to the seller for his profit. The seller is unhappy as he wanted a big hit and to be out of the debt obligation, but it is what it is and if this buyer cannot finance, then no buyer can. Thus, the seller must realize if he wants to sell he must be the bank.

This is the way we must do it in today’s market.

So yes, money is not available from the lenders, but it may be available from the seller. Seller financing is the only remaining avenue. Explore this approach, educate the seller and close a good deal. It is the only way in today’s shut down credit market.

Author: Don Todrin
Article Source: EzineArticles.com
Provided by: Digital Camera News

A business line of credit is one of the most popular forms of business loans. For the business owner or operator, particularly for small businesses, a business line of credit can be a lifeline of financing that can allow them to pay their bills, meet their payroll and continue to operate even when times are tough or business is slower than usual. For banks and lending institutions it allows them to hold the business on a short credit lease while they determine their viability in the marketplace.

The good news about a business line of credit is that it usually easy to get, even for businesses that have not been in business for a long time. The bad news is that financial institutions like a bank or credit union often will want personal guarantees or co-signing arrangements before they hand over access to a business line of credit.

A bank or other lending institution usually requires a business to have been in operation for a minimum of two years before granting a business line of credit. That is because the likelihood of a business failing within the first two years is far greater than at any period in its term of operation. Once a business passes this threshold a bank is much more likely to consider a business as a candidate for loans or lines of credit.

A business line of credit can be used for short term cash flow management, to make special or seasonal purchases, to re-stock inventory or supplies or for just about any other reason that can satisfy the banks demand for its usefulness to the business. A business line of credit is not normally made available to pay for salaries or bonuses to the employees of a business or to repay creditors from other banking arrangements.

These funds can be made available to the business in a number of manners under a business line of credit. They are sometimes available in a revolving cash account that can be borrowed against up to a certain amount or even in the form of a credit card that can be used by the company to make purchases for the business as required. Some business lines of credit require minimum payments plus interest every month and others have interest payment only options.

To see if you qualify for a business line of credit it is best to approach a bank or credit union where you already do your business banking. They know you, not just from seeing your face as you make deposits or withdrawals but they also know your personal credit history and this becomes an important factor in granting a business line of credit. Banks are most comfortable lending money to customers that they already know than the off the street business. This will help you not only get the business line of credit that your business may need but also help you get the best possible interest rate for your hard earned business dollar.

Author: David Gass
Article Source: EzineArticles.com
Provided by: Digital Camera Times

In the language of business, business is a process of generating income. Planned and adequate investments in business make it flourish more. Business is incomplete without sufficient funds. Money is the medium through which a business grows. So if you are planning to generate money then use money itself to generate it. You can get this money through business loan.

Business loan are basically designed for the people planning to start a new business or planning to expand their existing business. It can also be used to purchase new premises, consolidate existing business debts or invest in working capital.

Banks and building societies provides business loan; but there are several other lending companies that provide loan at competitive prices. Getting loan from these institutions is not an easy task. It involves a lot of risk. So before lending, these institutions ask to fill an application form that contains particulars and brief of your new business plan or for what purpose it will be used. Sometimes they may also ask for guarantees to secure the lending amount. But this generally depends on the amount being borrowed and the credit history of a person. The loan amount can be drawn according to ones requirements and needs. You can avail this loan ranging from ₤5000 to ₤100000.

Benefits of business loan:-

It is the fastest way to raise money for satisfying the needs of business. Business loan helps you to retain the ownership of your company. As said before, it can also be used for business debt consolidation and other purposes as well. Last but not least, it provides flexible repayment options

Before going for a business loan the person should take care of following points:

1. Take sufficient time to shop around, so that you can compare the different business loan quotes on the basis of rate of interest as they play a significant role in applying for a loan.
2. The person should not only compare the rate of interest but the other costs as well. He should also assess the terms and condition of loan. Therefore, the best deal comes to his way.
3. He should not deal with unauthorized lenders.

The lending procedure is very long and chaotic. An alternative solution is the online option where online lenders will provide you business loan at your convenience. You are just required to provide relevant information on internet itself and the lender will provide you the best possible deal.

Author: Peter Taylor
Article Source: EzineArticles.com
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