Tag: Loan

Medium to Long-term Business Loans, loan for business.#Loan #for #business


Medium to long-term business loans

Most businesses need a financial helping hand to either get them off the ground or expand and a medium to long-term business loan can be one of the best ways to get funding. It’s not as easy as it once was to find business loans, but the major banks still all offer them and if your business plan, credit score and homework is all in place, it’s certainly worth applying.

You can get insurance from these companies through MoneySuperMarket, but this doesn’t include every single insurer on the market.

Fee free small business loans from 1,000 up to 35,000

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Loan for business

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Loan for business

How our site works

When you’re looking for a medium to long term business loan, we want to give you as much choice as possible, so you can choose what’s best for you. Some lenders don’t want to be included on comparison websites, so we can’t promise to show you every single one. We show high street banks at the top of the list, with other lenders further down. We rotate the other lenders on the 1st of every month, so the ranking order changes regularly. You can find out more about how we work here.

Medium to long-term business loans

Setting up a business or expanding your current one can be expensive. Some people opt to fund it themselves but for many, this is impossible and chances are you’ll need financial support.

The reason many business owners prefer a medium to long-term business loan is so they can be certain that they will have funding in place to support their enterprise for several years. In turn, this will help them plan and budget.

Here, we take a closer look at some of the advantages and disadvantages of medium to long-term business loans…

Longer term loans

A medium to long-term business loan typically enables you to borrow money to help your business for one to five years.

The loan is repaid in monthly instalments, with interest added to the amount you owe. There are two types of business loan:

  • Fixed rate of interest: Your payments won’t change over the term of the loan.
  • Variable rate: The amount you owe could vary over the loan term.

Make sure you know which you are getting into as this could have a real impact on budgeting for your business.

Advantages of a medium to long-term loan

A medium to long-term business loan can help with all the costs associated with setting up a business, from cashflow to expenses and paying staff.

The longer the term of your loan, the lower your monthly payments will be, as you are spreading the cost over a longer period of time. This can be useful when you are trying to get your business off the ground, as it means you won’t have to make high monthly payments at a time when there will invariably be plenty of other set-up costs to consider.

Disadvantages of a medium to longer term loan

Taking out a business loan over a longer period may mean that your payments are lower than if you’d opted for a shorter term loan, but remember that ultimately this means you will pay more interest overall.

How much interest will you pay?

The amount of interest you must pay on a business loan will depend on your individual circumstances, including how much you want to borrow and over what period of time. If your business is just starting out, the lender will usually want to look at your personal credit rating to give them an idea of how responsibly you manage your money. The higher your credit score, the more likely you are to be offered a loan at a competitive rate of interest.

Alternatives to medium to long-term business loans

As well as loans, there are several other ways that business can secure funding. You may, for example want to use a business account overdraft which can provide you access to funds as and when you need them, making them useful for any unforeseen expenses. Business overdrafts are usually available for any period up to 12 months.

Alternatively, you may want to consider a business credit card. These can provide a useful way to manage staff spending and usually give up to 56 days interest-free credit.

Other options include cashflow finance, which enables companies to borrow against the value of their unpaid invoices, and borrowing against assets, for example your business’s property or equipment.


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Business Loan: Small business finance, Westpac, loan for business.#Loan #for #business


Business Loan

We ll be in touch in 1 working day.

Essentials

Looking to grow your business? Take the next step in your business plan.

Choose a fixed or variable rate Business Loan.

Variable rate

  • Make extra payments, which could reduce interest paid over the life of the loan
  • Option to swap between interest only or principal and interest repayments
  • Redraw allows you to make extra payments and access these funds later.

Fixed rate

  • Provides certainty in knowing what you’re up for with each repayment
  • Protects you from potential future interest rate movements.

Make tax time less taxing

Keep track of your Business Loan balance and financials online (and at tax time, export details of interest paid to your accounting software).

Terms and loan security

The term of your Business Loan will vary depending on security offered (you may swap if your situation changes):

  • Loan term up to 30 years when residential property used as security
  • Loan term up to 25 years when commercial or rural property used as security.
  • Loan term up to 5 years when unsecured (guarantee may be required)
  • Establishment fee
  • Monthly loan maintenance fee
  • Other fees apply.

Rates

About applying

Important Considerations

Here are some important points to consider before applying for a business loan:

  • Security – depending on your circumstances, business loans can be unsecured or require security in the form of residential, commercial or rural property. A guarantee will also be required by company directors for corporate borrowers
  • Credit history – all borrowers, owners, directors and guarantors must have clear credit records. All statutory payments and ATO liabilities need to be up to date and not under arrangement
  • Banking and borrowing history – existing bank accounts and lending products must be within their approved limits
  • Domicile – your business must be registered in Australia

Looking to borrow less than $50,000?

Consider our range of business credit cards. Terms and Conditions apply.


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Small Business Loan Definition, small business loan.#Small #business #loan


Small Business Loan

Small business loan

Small business loan

Definition:

A small business loan is an amount of money borrowed from a financial institution by a small business person to start, run, or expand a small business.

Getting a Small Business Loan is Difficult

Unfortunately, financial institutions are notoriously reluctant to lend to small businesses – according to a recent survey by ondeck of over 10,000 business loan applicants in the U.S,, 82% were denied financing by their bank.

Loaning to small businesses, especially startups, is a riskier proposition for banks than mortgage lending or lending to larger, established businesses.

In addition, given that the underwriting costs for evaluating, verifying, and processing a small loan is roughly the same as for a larger one, banks can increase their profits by focusing on larger loans to bigger businesses (small businesses typically request loans of less than $500,000). As well as being rejected for financing more often, smaller businesses also typically pay higher interest rates on loans than big businesses.

Consider that you may have an excellent credit rating and a solid business plan and still not be able to get a small business loan because you have no collateral. Even established business people can find themselves in this position, if they do not own enough tangible assets, such as houses or other property.

In other words, the small business loan is not being granted on the status of your business; it s being granted on your personal financial status.

That s why it s important that your personal financial house is in order before you apply for a small business loan.

You will also find that many lenders just don t provide seed money. While they re perfectly willing to give a small business loan to help a business grow, they don t want to take the risk of lending to a start up.

All that being said, you have a better chance of getting a small business loan if you know where to look and are prepared to meet the lender s expectations. Keep in mind that the overarching consideration of lenders is risk management and approval will hinge on their assessment of your ability to pay back the loan.

Increasing the Odds of a Successful Loan Application

Aside from sufficient collateral, financial institutions will need the following before considering a loan application:

  • A business plan document that outlines your company, products, target market, staffing, cash flow and other financial projections, etc. Banks scrutinize business plans to reassure themselves that the business they are lending to is likely to be successful. As such, the business plan needs to demonstrate a solid business model backed by sound management.
  • If you are an established business, information such as loans/credit history, bank accounts, and other supporting financial information. You should also include accounts receivable and accounts payable statements, and references from vendors that indicate that you have a solid history of making payments on time. Finally, include balance sheets, corporate tax returns, and (if possible) audited financial statements for the previous few years of business.
  • A personal financial summary, including details of assets such as property, vehicles, investments, etc. and liabilities such as mortgages, loans, credit card debt, etc.

Note that banks will often also require creditor insurance on business loans, which covers repayment of the loan in the case of death or disability of the business owner(s).

For more on increasing your chances of getting a small business loan, see How to Get a Small Business Loan.

Credit Unions May Be a Better Choice Than Banks

Credit unions are an increasingly important source of financing for small businesses. According to the Huffington Post: From June 2007, the onset of the financial crisis, to December 2015, small business loans outstanding at credit unions more than doubled—growing by slightly more than 130% over the period.

Those loans at banks actually shrank by 10% during that time.

Credit unions are smaller, more locally oriented institutions and as such are more likely to lend to small businesses in their communities. Banks on the other hand, have gotten larger and more national (and international) through mergers and acquisitions. The larger the institution the less likely decisions (such as lending policy) are made at the local level.

Examples: Steven s application for a small business loan was rejected because he didn t have any collateral.


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Government Small Business Loans, getting a small business loan.#Getting #a #small #business #loan


Government Small Business Loans

Government small business loans help put your own business within reach. First there’s the quest for a decent location, then comes building a customer base, followed by all the initial hiccups of generating a cash flow before your business grows roots and gains momentum. The beginning of a business is crucial because it’s when you gain or lose market credibility. If you disappoint your customers, they may not give you a second chance. If your business gets off to a rocky start (most do), and you believe you can recover but need further financing to make this happen, you can apply for government small business loans.

For-profit lenders are reluctant to issue loans to anyone who does not have a strong credit report and financial history. That is not the case with government small business loans. Obviously, a decent credit report is important, and you will have to follow the guidelines regarding the repayment period and the interest rate set by the government, but usually the interest rates charged by government loans are lower than those you could expect in the private sector.

More about Government Small Business Loans

Government loans are typically offered through banks and credit unions that partner with the Small Business Administration (SBA). The SBA is a U.S. government body, with the motive of providing support for small businesses and entrepreneurs. For each loan authorized, a government-backed guarantee offers serious credibility, since the lender knows that even if you default, the government will pay off the balance. These loans can be applied to a number of uses, such as:

  • Purchase of new equipment, machinery, parts, supplies, etc.
  • Financing leasehold improvements
  • Commercial mortgage on buildings
  • Refinance existing debt
  • Establishing a line of credit

Government small business loans benefit both small businesses and the lending agency. For small businesses, it is beneficial because this is money capital they may not have access too. For banks, the loan’s risk is decreased due to the loan being backed by the SBA.

Different SBA Government Loans

The SBA extends financial help through various lending programs it has to offer. Some of the more popular loans are:

  • 7(a) Loan Guarantee Program: aimed primarily in helping a small business start or expand its services. The maximum size of such a loan is $5 million.
  • MicroLoan Program: mostly used for short-term purposes, such as purchase of goods, office furniture, transportation, computers, etc. The maximum amount is fixed at $50,000.
  • 504 Fixed Asset Program: featuring fixed-rate and long-term financing, these loans are aimed at applicants whose business model will benefit their community directly, either by providing jobs or bringing needed services to an underserved area. Again, the maximum amount is $5 million.
  • Disaster Assistance: under this program, loans are sanctioned to renters or homeowners with a low-interest, long-term plan for the restoration of property to its pre-disaster condition.

In most cases, maintaining a good business credit report is enough to qualify. In addition, it instills confidence not only in the lender, but also in you. There is at least one SBA office in every state in America. If you contact them regarding the startup status of your business model and plan, you can get started on a government small business loan that will give you the financing to make your dreams a reality.


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Business Loans, Westpac, business loan.#Business #loan


Business loans

Business loan

Vehicle equipment finance

When you don’t want to use cash flow to purchase new assets.

  • Business vehicle finance: Buy, hire or lease the latest model without tying up your cash
  • Business equipment finance: Buy, hire or lease – the choice is yours when it comes to financing plant and equipment.

Business loan

Business overdraft

Provides cash flow relief with funds to cover business expenses, such as invoices and wages until you’re paid.

  • Unsecured Business Overdraft: Up to $50k. No asset security taken. Director’s Guarantee required for Corporate borrowers

Business loan

Business loans

Great for purchasing an existing business or franchise, or investing to grow.

  • Westpac Business Loan: Borrow from $20,000 and choose between a fixed rate with predictable repayments or variable rate with flexible repayments

Looking for other business loans?

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Things you should know

Credit criteria, fees, charges, terms and conditions apply. Talk to your banker for product details.

Conditions, fees and charges apply. These may change or we may introduce new ones in the future. Full details are available on request. Lending criteria apply to approval of credit products. This information does not take your personal objectives, circumstances or needs into account. Consider its appropriateness to these factors before acting on it. Read the disclosure documents for your selected product or service, including the Terms and Conditions or Product Disclosure Statement, before deciding. Unless otherwise specified, the products and services described on this website are available only in Australia from Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.


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SBA Disaster Loan Application Deadlines Nears, sba loan programs.#Sba #loan #programs


SBA Disaster Loan Application Deadlines Nears

AUSTIN, Texas – Two important deadlines are ahead for Texans who are considering a loan through the U.S. Small Business Administration for recovery from the April storms and flooding.

Most survivors who registered with FEMA for disaster assistance were contacted by the SBA with information on the agency’s loan-interest disaster loans, as well as instructions on how to complete the loan application.

The deadline to submit the application for physical damage is June 24, 2016. The deadline for businesses to submit a loan application for economic injury is Jan. 25, 2017.

The SBA is the federal government’s primary source of money for the long-term rebuilding of disaster-damaged private property, offering low-interest disaster assistance loans to businesses of all sizes, private nonprofit organizations, homeowners and renters.

Survivors may apply online using the electronic loan application via SBA’s secure website at disasterloan.sba.gov/ela.

Disaster loan information and application forms are also available from SBA’s customer service center by calling 800-659-2955 or emailing [email protected] Individuals who are deaf or hard‑of‑hearing may call 800-877-8339. For more disaster assistance information or to download applications, visit sba.gov/disaster.

Completed applications should be mailed to:

U.S. Small Business Administration

Processing and Disbursement Center

14925 Kingsport Rd.

Fort Worth, TX 76155

SBA loan applications should be submitted even as disaster survivors await an insurance settlement. The loan balance is reduced by the settlement. SBA loans may also be available for losses not covered by insurance.

Both FEMA and the SBA encourage Texans who suffered damage or loss from the April storms and were provided a loan application to complete the application. There is no obligation to take a loan if offered. If approved, and a survivor does not accept the loan, it may make them ineligible for additional federal assistance.

Homeowners may borrow up to $200,000 from SBA to repair or replace their primary residence.

Homeowners and renters may borrow up to $40,000 to repair or replace personal property.

Businesses may borrow up to $2 million for any combination of property damage or economic injury. SBA offers low-interest working capital loans—called Economic Injury Disaster Loans—to small businesses and most private nonprofit organizations of all sizes.

FEMA’s mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.


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How to get funding for a business without a bank loan, Startups, business startup

How to get funding for a business without a bank loan

Business startup loan

With bank lending figures continuing to fall, thousands of entrepreneurs are looking for alternative sources of funding to get their business off the ground. If you re one such firm, this article provides a comprehensive guide to the tools and options at your disposal.

A Start Up Loan

If you are starting a new business or you have been trading for no longer than 24 months, you may be eligible for a government-backed Start Up Loan.

These are unsecured personal loans of up to £25,000 that must be used for business purposes and are repayable at a fixed 6% interest per annum.

Bank overdrafts

For companies with fluctuating income, a bank overdraft can provide quick, flexible cashflow. The idea is simple: you dip into the overdraft in the leaner months, and come back out when the business picks up.

Most major banks charge interest only on the amount you overdraw, and many offer tailored packages for young businesses.

We’d love to hear your insight:

For example, RBS/NatWest provides overdrafts up to £500, free of set-up fees, for a start-up business first 12 months (normally £50). However rates of interest on bank overdrafts are usually charged above base rates (e.g. 6.5% for RBS/NatWest), and in most cases the overdraft amount is repayable on demand.

Business cash advance

Companies such as Worldpay, Business Cash Advance and Credit for Merchants allow businesses to receive money upfront before debts and invoices have actually been paid.

Under the terms of the agreement, the financier purchases a fixed percentage of your future credit/debit card transactions at a discount, and then advances the cash into your bank account, usually within 10 working days. Repayments will be scheduled at a pre-agreed percentage of every transaction usually between 10 and 20%.

With a cash advance, you can secure up to £100,000 without the burden of collateral or fixed monthly repayments, only paying the advance back when your customers pay you. But you may have to meet a rigorous set of conditions; for example Business Cash Advance insists all clients must have been in business for at least a year, with a minimum monthly turnover of £3,500 and the ability to process credit and debit card transactions.

Find out more about business cash advances here.

Asset finance

An asset-based loan works the same way as a mortgage. You borrow money against an existing possession, and, if you can t meet your obligations, the asset is repossessed. Assets which can be used as collateral include property and premises, accounts receivable, inventory and equipment.

Although interest rates are often punitive, asset-based finance can be extremely useful for a company desperate for cash, or a business backed by valuable property which has yet to make major profits such as a hotel or plant hire specialist.

Factoring

Factoring can speed up cashflow and free up the time spent chasing bad debts, but there are drawbacks. A factor will impose a charge on each invoice, so your profit margins will be reduced, and it can be difficult to sever a contract with a factoring firm, because you have to compensate them for all outstanding invoices before you can formally part company.

One alternative, which could be more cost-effective, is MarketInvoice, an online marketplace which allows you to auction your invoice to a community of investors. You receive payment straight away and the investor will receive a profit when the payment finally comes in.

Angel investors

If you manage to impress a business angel, they may provide investment in return for an equity stake. Most angels are seasoned entrepreneurs themselves, so they know what you re going through and they re likely to be patient.

Furthermore, the process of finding and enticing an angel is far less daunting than you might think. Take a look at our investor directory to take a look at some of the most active angel funds and angel investors in the UK. If you can put together a tight pitch with realistic growth projections, and are prepared to give up a share of your business, this could be the route for you.

Crowdfunding

Crowdfunding is, essentially, an extension of the charity sponsorship page in the business world. People come together, on crowdfunding sites, to pool money towards a particular venture or idea it could be 10 people putting in £500 each, or 3,000 people each giving £1.

Donors or investors on crowdfunding sites, such as Kickstarter or Crowdcube are typically private individuals providing small sums, so they re unlikely to give you the sort of grilling, and rigorous conditions, an angel investor would. You can also scope out the popularity of your idea via a crowdfunding site, and get some crucial word-of-mouth marketing going.

If you re interested in raising finance using crowdfunding take a look at our crowdfunding form. We ve partnered with a few crowdfunding platforms to help businesses raise seed or growth capital and may be able to point you in the right direction.

Peer-to-peer loans

A peer-to-peer exchange site, such as Zopa or Funding Circle, will put you in touch with private lenders, and create a personal relationship between you and the lender fostering trust and patience.

A number of companies are now well-established in this space, and several offer generous terms. Indeed Zopa waives all fees for loan applications, reduces interest rates for borrowers who make early repayments, and adds only a one-off fee of £130 to the cost of the loan.

Micro-loans

If you only need a very small amount of money, you should think about a micro loan, which is tailored to your circumstances and can be used alongside funding from other sources.

A number of companies in the UK offer micro loans; for example Finance Wales offers funding from £5,000 to £25,000, with generous repayment terms ranging from one to five years.

Community schemes

A plethora of community development finance initiatives, or CDFIs, have been set up around the country to help individuals, and businesses, denied credit by banks and lending companies.

CDFIs provide help with everything from bridging loans and working capital to funds for property and equipment purchase, but their terms are usually restrictive; you usually have to be either a micro-business or a social enterprise, and be based in a disadvantaged area to qualify.

Family loans

If you want to keep things ultra-simple, a supportive family, with money to spare, can provide a fair, willing and reliable source of loan funding. Relatives and loved ones are more likely to trust you with their money than an outsider, and they will probably demand lower interest and fewer incentives than a commercial organisation.

There are of course some drawbacks when it comes to mixing family and finance, so it s worth weighing up both the pros and cons of family funding.

Any finance model or provider should be researched thoroughly before you make any commitments, to ensure this is the best solution for your business. You will find more information on some of these finance options in our Raising Finance section.

We would also recommend researching specific providers or funding platforms online and speaking to other businesses which have used them.


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Small-Business Loans – 3 ways to get a loan, start up business loan.#Start #up

3 ways to get a small-business loan

The recovering economic environment has meant that small businesses have had to be more creative when looking for loans.

However, companies with sound business strategies still can borrow. Options include loans from traditional banks and institutions affiliated with the Small Business Administration, as well as financing from Internet-based lenders.

“For creditworthy, high-scoring small businesses, there is money available,” says George Cloutier, CEO of American Management Services, a consultant to small businesses.

Bank loans

The best place to get a small-business loan is still a bank, says Cloutier. Banks typically offer the lowest interest rates and many have established reputations as trustworthy lenders.

“Many small businesses try three or four banks and then stop looking,” Cloutier says. A more persistent approach has better odds of success.

Calculate business loan payment

Want to calculate your small-business loan payment? Go to Bankrate’s loan and amortization calculator.

“Take out the phone book, target 10 banks and work through that list,” he says.

That strategy worked for Michael McKean. He is founder of The Knowland Group, a company that helps hotels fill up their meeting space.

A few years ago, as the success of The Knowland Group grew, McKean began searching for a bank that would give the growing company expanded access to credit.

“We talked to every bank in our area, at least a dozen,” McKean says. “Many came back with proposals, but the terms were very onerous. Or sometimes they shifted terms.”

Finally, M T Bank came through.

“They just wanted to get our business,” McKean says.

McKean says his company did not approach M T any differently than it had approached the other banks. It was just a matter of being persistent until the right deal came along, he says.

“We did everything right, approaching the right person at each bank,” he says. “We’re a profitable business. I think it was just the … credit crunch that prevented us from getting a loan.”

Cloutier says the key to success with banks is to show past profitability, and to describe a well thought-out plan for future profits.

“If you aren’t making a profit now, you must be able to tell the bank how you will change that in the short term, or you really won’t be able to get a loan,” he says.

He also recommends that businesses start small in their loan requests.

“If you need money for four trucks, ask for two,” Cloutier says. “The bigger the loan request, the harder it is to get it approved.”

SBA loans

Another way to find a bank loan is through the Small Business Administration, or SBA. The SBA can direct you to banks that offer loans guaranteed by the agency. This way, you’ll have the advantage of approaching banks specifically interested in lending to small businesses.

Interested businesses should contact the SBA office nearest to them, which can be found on the agency’s website. Jeanne Hulit, the SBA’s acting administrator, urges businesses to seek a bank that is an experienced SBA lender.

Banks granting SBA loans place increased emphasis on business plans, cash flow and profit forecasts in deciding whether to lend, she says. The SBA also can refer businesses to free counseling centers to improve their performance.

Online opportunities

Another source for loans is the Internet. There are several sites where businesses can seek alternative lenders, such as individuals and small companies.

Interest rates are generally a little higher than what a bank will charge, but it’s much less than what you’ll have to pay on many credit cards.

Look around at different sites, some may charge a one-time fee to list your business, while others are free to list but might have fees reflected in loan rates.

If you’re going to list your company on one of these sites, describe your business in clear and concise language.

Lastly, make sure to investigate the company you are looking to post your business on. These kinds of companies were successful in 2008 and during the recession, but times have changed. Many have since gone out of business. Before paying for anything, make sure the company is legit.


Tags : , , ,

Small-Business Loans – 3 ways to get a loan, start up business loan.#Start #up

3 ways to get a small-business loan

The recovering economic environment has meant that small businesses have had to be more creative when looking for loans.

However, companies with sound business strategies still can borrow. Options include loans from traditional banks and institutions affiliated with the Small Business Administration, as well as financing from Internet-based lenders.

“For creditworthy, high-scoring small businesses, there is money available,” says George Cloutier, CEO of American Management Services, a consultant to small businesses.

Bank loans

The best place to get a small-business loan is still a bank, says Cloutier. Banks typically offer the lowest interest rates and many have established reputations as trustworthy lenders.

“Many small businesses try three or four banks and then stop looking,” Cloutier says. A more persistent approach has better odds of success.

Calculate business loan payment

Want to calculate your small-business loan payment? Go to Bankrate’s loan and amortization calculator.

“Take out the phone book, target 10 banks and work through that list,” he says.

That strategy worked for Michael McKean. He is founder of The Knowland Group, a company that helps hotels fill up their meeting space.

A few years ago, as the success of The Knowland Group grew, McKean began searching for a bank that would give the growing company expanded access to credit.

“We talked to every bank in our area, at least a dozen,” McKean says. “Many came back with proposals, but the terms were very onerous. Or sometimes they shifted terms.”

Finally, M T Bank came through.

“They just wanted to get our business,” McKean says.

McKean says his company did not approach M T any differently than it had approached the other banks. It was just a matter of being persistent until the right deal came along, he says.

“We did everything right, approaching the right person at each bank,” he says. “We’re a profitable business. I think it was just the … credit crunch that prevented us from getting a loan.”

Cloutier says the key to success with banks is to show past profitability, and to describe a well thought-out plan for future profits.

“If you aren’t making a profit now, you must be able to tell the bank how you will change that in the short term, or you really won’t be able to get a loan,” he says.

He also recommends that businesses start small in their loan requests.

“If you need money for four trucks, ask for two,” Cloutier says. “The bigger the loan request, the harder it is to get it approved.”

SBA loans

Another way to find a bank loan is through the Small Business Administration, or SBA. The SBA can direct you to banks that offer loans guaranteed by the agency. This way, you’ll have the advantage of approaching banks specifically interested in lending to small businesses.

Interested businesses should contact the SBA office nearest to them, which can be found on the agency’s website. Jeanne Hulit, the SBA’s acting administrator, urges businesses to seek a bank that is an experienced SBA lender.

Banks granting SBA loans place increased emphasis on business plans, cash flow and profit forecasts in deciding whether to lend, she says. The SBA also can refer businesses to free counseling centers to improve their performance.

Online opportunities

Another source for loans is the Internet. There are several sites where businesses can seek alternative lenders, such as individuals and small companies.

Interest rates are generally a little higher than what a bank will charge, but it’s much less than what you’ll have to pay on many credit cards.

Look around at different sites, some may charge a one-time fee to list your business, while others are free to list but might have fees reflected in loan rates.

If you’re going to list your company on one of these sites, describe your business in clear and concise language.

Lastly, make sure to investigate the company you are looking to post your business on. These kinds of companies were successful in 2008 and during the recession, but times have changed. Many have since gone out of business. Before paying for anything, make sure the company is legit.


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How to Start a New Business Loan With Bad Credit, new business loan.#New #business

How to Start a New Business Loan With Bad Credit

New business loan

With bad credit, you may need to go outside traditional lending companies for a loan for your business.

bank image by Pefkos from Fotolia.com

Related Articles

  • 1 [Business Loan] | How to Get a Business Loan With No Credit
  • 2 [Small Business Loan] | How to Get a Small Business Loan With Bad Credit No Collateral
  • 3 [Woman Get Start] | How Can a Woman Get Start Up Funds for a Business When She Has Bad Credit?
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When you want to start a new business and you have bad credit, you have fewer options for borrowing startup capital.

When you need to borrow money to start a new business and your credit’s bad, you have two strikes against you: bad credit and a new business without a track record. Traditional lenders don’t like lending to startups, but with the rise of internet lending and other possibilities the internet provides, you can probably get a loan anyway, although not necessarily at the interest rate you’d prefer.

First Steps to Take

Before you apply for a loan, there are some preliminary steps you need to take:

  • Pencil out your financial needs. This first step doesn’t have to be detailed or complex, but it’s a map you’re going to need. Include not only how much money you need initially but also how much you’ll need later – almost every business has a negative cash flow after starting up.

These first steps can be daunting, but they are critical to success in obtaining a loan.

Traditional Lenders

Bankers don’t like bad credit and they seem to hate new businesses. Nevertheless, some community bankers may be willing to listen. If nothing else, you’re practicing your pitch.

Credit unions are another traditional lending source. If you don’t belong to a credit union, perhaps your spouse, a close friend or family member does and would be willing to sign or co-sign for the loan. Which brings you to another important lending source: friends and family.

Friends and Family

If you have bad credit because you spend more than you earn or are generally careless about paying bills and making credit card payments, you can’t expect friends or family members to go out on a limb for you. However, if special circumstances generated a low credit score – a difficult divorce, for example – and you have a reputation for following through when you make important life decisions, your friends and family may be willing to lend you the money or at least some of the money you need. One way of accomplishing this is to ask them to co-sign on your loan. The co-signer is ultimately responsible, but you’ll make all loan payments directly to the lender, and all the payment reminders come to you first.

Internet Lenders

The internet opened up a lot of business opportunities with one of them being internet lending. Internet lenders tend to accept more risk than banks and put you through fewer hoops when you apply for a loan. Two of the largest are Prosper and Lending Club. The book “Peer Finance 101” lists 20 more. With bad credit, you can probably get a loan, but it will come with a higher-than-average interest rate.

Crowd Funding

Crowd funding is an amazing internet success story. If you have a killer idea and no money to execute it, crowd funding may be your answer. In essence, you use the internet to pitch hundreds and sometimes thousands of people to motivate them to lend or donate the money you need to execute your idea. The largest crowd funding organization is IndieGoGo, which has raised more than $1 billion for budding entrepreneurs. The IndieGoGo website has a short pamphlet that explains how crowd funding works.

Besides IndieGoGo, there are many more crowd funding organizations, some of which specialize in lending in specific areas: real estate, socially responsibility, women and minorities, artists and others. To see the opportunities available, do an internet search for “crowd funding organizations” or “crowd funding [your special interest].”


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