Just wishing for business success is quick and easy. Actually achieving it may require getting a quick business loan from a bank, but this is not so easy.
True success in the business world takes time. Unfortunately, the world of business also moves fast. A quick business loan can help you catch up but knowing where to go and how to qualify is tricky. Once you learn the ins and outs of the process, and the options available, you can make the decision that is right for your business.
Is it Possible for a Small Business to Qualify for a Quick Business Loan from a Bank?
For companies that have millions of dollars in assets and a longstanding history of good business, getting a quick business loan is simple. The rest of us must take a more difficult journey.
Most business owners or nonprofit officers look for a quick business loan from a bank when they have a serious cash problem. However, banks are just not set up for speed.
Banks will require a 700 or better credit score and 100 percent collateral to back up a fast business loan. They also expect you to provide tons of documents to support your application. This includes (but is far from limited to) several years’ worth of tax returns, bank statements and letters from your accountant.
In addition, the application process for a bank is long and tedious. Just gathering all the documents can take more than 24 hours out of your business week. This is valuable time that you or your employees could be spending in growth pursuits.
Even after you gather all the paperwork and complete the application, any banks willing to give you a business bank loan will still take 2-4 months to get everything in place. This is assuming that you can qualify. In actuality, most small businesses are unable to qualify for a fast business loan from a bank. That means that all your work will be for nothing.
What kind of Small Business Loans Can You Get from a Bank
You can typically get term loans or a business line of credit (LOC) from a bank. There are also other popular options that may be available.
Term loans are for more capital purchases. These are usually given in a lump sum for a specific reason and you pay it back over a set period of time. You cannot use the money for daily business expenses or anything else that is not part of the loan agreement.
A LOC is normally more for short term emergencies. This is money that you receive and can draw upon at any time. You can take money out of the stash at any time. Normally, you have to repay what you remove before you can take money out again. It’s ideal for handling cash flow shortages and unexpected events such as an equipment break down or natural disaster.
SBA loans are also an option for some businesses. These are loans you can apply for with the Small Business Association. While the SBA does not financially back these loans, they do work with banks to help you obtain approval. They also put their own stamp of approval on the application, guaranteeing that they will work with you to ensure repayment. With the SBA, the loan process is especially long and cumbersome. You will get your money but it will take several months.
If your business is under $10 million in sales then you might as well just not look towards a bank. They don’t want your business or are not set up to work with companies of your size.
To make matters worse, since the recession, banks have been tightening the reins on offering all types of small business loans. To minimize risk, they are developing stricter criteria and looking at each application with a fine tooth comb. As a result, a small business that has debt to income ratio numbers that are marginal will now be denied. This is because a bank will ere on the side of caution instead of taking a chance on a good business that just needs a little help to be great.
Are There Any Alternatives to a Quick Business Loan from a Bank?
When you are anxious to get a new project or program off the ground, or worrying about an unexpected expense, time is crucial. You don’t have weeks or months to wait for immediate business financing. If you are unable to wait on a bank or can’t qualify, you might think you are out of luck. Fortunately, many small businesses are finding success with alternative lenders.
Over the last 10 years alternative financing companies are now filling the void by serving the businesses with $150,000 to $10 million in yearly revenue. This includes both for profit small business and nonprofit organizations.
Financing Solutions (www.financingsolutionsnow.com) was one of the first companies in the US to introduce a quick line of credit for small organizations. We offer cash advances, lines of credit and debt consolidation. You only need to have a 550 credit score or higher, unlike the impossible to meet criterial at a bank.
The line will be set up in 24-72 hours. You do not have to provide collateral and there are no personal guarantees except in the cases of fraud.
It’s also easy for nonprofits to get not for profit funding from Financing Solutions. You can have a board member sign the application. They make approval decisions by looking at how your business or nonprofit is doing.
What are Some Quick Ways to Grow Your Business?
Growing your business is hard. It’s especially stressful when you are also wearing numerous hats and just trying to keep your business from sinking. That’s why it’s essential to delegate minor tasks so you can focus on the big picture activities that will increase your profitability and ensure that you will still be around next year and beyond.
Of course, you know you need to think long term and demonstrate value to your customers. But it takes more than that. You must make the decision to really take action and implement real strategies to take your business to the next level.
Be prepared – rapid growth can be dangerous if you are not ready for it. Even though things may be moving fast, it’s important to pay attention to the small details. For example, you can’t let your growth get in the way of quality control. Also, if you find that growth is happening too fast, don’t be afraid to slow things down a bit.
Research your target audience – it’s vital that you know who you are selling to. What are his pain points? How does she like to receive information? Knowing your audience is the best way to identify trends and new opportunities. When you understand what they really want, you will quickly start to see what they will want next. Then, you can be the company to provide it before anyone else does.
Develop partnerships – you may not be ready to sell your business or acquire the competition. However, you can still use other companies to your advantage. One way to do this is to partner with companies that sell products or services complimentary to yours. For instance, if you manufacture bird houses, join forces with a company that makes bird seed. You can also make friends with a bird watching organization. This is ideal because you are not in competition with one another. Therefore, you can share contact lists and resources to benefit you both. You will quickly reach more customers than you could on your own and create new pathways for increasing market share.
Create complimentary products yourself – it’s not always necessary to find other companies with complimentary products and services if you can create your own. For example, if your company produces mattresses, you might already have the materials to also create bedding or pillows. You could also offer CDs with relaxing music or produce and sell e-books on how to get the best sleep.
Switch things up – you can’t expect new results from using the same old tired techniques and processes. It’s important to constantly challenge yourself and your team. This is one idea that doesn’t take much fast business financing. Just a lot of creativity and flexibility is all you need. Work in a different location (a nearby park, on the roof, etc.) to spark inspirations. Place a box at your worksite and ask staff to each write down one new concept or suggestion every week. Then, you should actually READ them. You never know where the next big thing for your business will come from. To generate new revenue streams, you may need to break old habits and request the unexpected. Still, it’s vital that you not bite off more than you can chew. Find one or two excellent ideas and focus on bringing them to completion.
Mind your money – all the best growth strategies in the world will fall flat if you run out of cash. Pay attention to cash flow. Make sure you have a business line of credit from Financing Solutions to manage it.