Where Can I Get a Loan for My Business
Places to Get a Loan for Your Business
You can always go to a bank and apply for a loan. However, you should know that this can be a time-consuming process. They typically have very lengthy applications that could take you several days to complete.
A traditional bank will also require you to have enough assets to cover the value of the loan, which is difficult if you are a small business in need of a loan. In the end, the best you could hope for is a business line of credit.
This basically amounts to a home equity loan, where you will get the money you need by putting up your home as collateral. However, if you run into any difficulties in repaying the loan, you would be in danger of losing not only your business but your house as well. While this might be fine for some, it is a big risk others may not be willing to take.
Going where banks fear to tread, factoring companies are available to help with loans for small businesses. These organizations usually have easier applications, and an approval process with fewer hoops to jump through than a bank.
Nevertheless, factoring companies often charge expensive fees in exchange for their services, amounting to thousands of dollars added to the cost of your loan. In addition, they may lock you into a long term repayment schedule, meaning you will be committed to them for up to two years.
Why Cash Advance Companies are a Better Option
When you need a loan for your business, what you are really looking for is cash that you can use right now to make payroll, pay business taxes or just get you through a rough patch. These cash shortages can happen to any business that is seasonal or those that rely on lots of equipment that may need to be fixed or replaced frequently and without warning.
A cash shortage may also be the result of an account receivable gap, where you must wait 30, 60 or 90 days for your customers to pay but your vendors expect their payment within two weeks. Let’s face it, when you need cash, the best place to go is a company that specializes in providing fast business funding to small businesses, like Financing Solutions (www.fundmypayroll.com).
Using your account receivables as collateral, Financing Solutions can get you the money you need in as little as two business days. With a cash advance company, there is no long term commitment and most businesses are able to repay the funds in a few weeks or months.
Instead of searching for a loan for your business, it is far easier to use a cash advance company. It will save you time, aggravation and money.
What You Should Know Before Applying for a Bank Loan
Some entrepreneurs believe that, if they should ever need to borrow money, the bank will be there for them. If you have a successful business then you are making money, putting people to work and helping the economy, right? Therefore, banks should be willing to help during those times when you have a cash shortage, but this is typically not the case.
One of the most important factors to decide is how much money you will actually need. You will also have to explain your intentions for the borrowed funds. Before borrowing funds from any lender, you must first have a plan for how you will repay the money. If you don’t, then perhaps you should rethink taking out a loan in the first place.
If you plan to take out a loan from a traditional bank, you will also need to determine the value of all assets. This may include equipment, property and account receivables. For some, this may be a tricky task due to depreciation or a drop in the price since the time it was purchased.
Many of these issues can be avoided altogether by using a cash advance company. Keep them in your back pocket and turn to them first when you need cash for your business.