Falling into debt is an unfortunate occurrence for anyone; however, with the help of professional companies there is a way or multiple ways out of debt. If you decide to take action in an effort to absolve your debt, you may want to consider hiring a debt relief company to help you do so. However, be aware when hiring these companies that some are far more qualified than others. In fact, some of these companies can even be scams that will land you even farther in debt. So, be prepared to do some hunting before hiring a certain company. Also, keep in mind that all of these companies charge fees that you will have to pay for.
Continue reading »
When the economy spirals downward, small business owners rush to the bank to take out a loan. Working capital loans provide your business with the quick cash it needs to keep going in an emergency. They are short term loans that can help your business stay afloat in stormy times; loans that increase business cash flow or fund the daily operations of your business. Business owners can use the money to buy more inventory, pay employees, mortgage payments, rent etc. Working capital loans are not meant to be used to buy long term assets or investments.
Working capital loans may be secured or unsecured. A secured loan is one where the borrower must provide some type of collateral to the lender. The asset may be the owner’s personal property such as a home, vehicle or business inventory. They can be fully paid up assets or property that has existing mortgages and loans against them. How much collateral the financial institution will require will depend on an assessment of the individual’s ability to pay back the loan. Unsecured loans are only given to people who have good credit scores and are considered low or no risk borrowers.
There are several different types of working capital loans. Be careful to choose the one that’s right for you. An overdraft/line of credit loan is connected to your savings or checking account. The available balance (or available limit) on this line of credit will be added to the available balance in your account and considered at the time transactions are being authorized or clearing your account. Money will be put into the bank as you need it or a set amount that the bank and you agree upon will be deposited into your account for future use. This is a good option because interest is paid only on the amount of money overdrawn – usually 1% to 2% above the institution’s prime rate.
Unlike the line of credit loan a short term loan will most likely require collateral and will have a fixed interest rate. This loan usually requires repayment within a 12 month period. This type of loan is sufficient for someone starting up a new business.
If a business has a huge order to fill and does not have the funds, an accounts receivable loan may be of help. The loan amount will be based on the amount of money your customers owe you that will be received upon completion of the contract. In addition there are also loan facilities for businesses that buy and sell goods. These include, Letters of Credit, Inventory Loans and Trust Receipts.
Working capital loans can help save your business when one of your clients files bankruptcy, leaving you to hold the bag, when you are unable to keep up with all of the expenses, or when your business is doing so well that you are unable to fund huge projects. If you are in need of some quick cash today, you’re in the right place.
In today’s market, business loans are tough to get a hold of. They aren’t impossible to get a hold of, they are just tough to get a hold of. If you know and understand what banks and lenders are looking for in a quality small business borrower, it really is not that difficult to entertain those requirements.
Small business owners are always wanting to borrower more money than they can handle. When first starting a business it is important to think about what you are going to borrower the money for. Once you have decided the different aspects of your business that need funding, you can match that need with a business loan type. There are all different sorts of business loans that are available to the business owner.
A few example of business loans that your business can be approved for are:
Working Capital Loans – A working capital loan is a good short term loan to hire new employees, purchase new equipment, start a new project, etc. These loans are not meant to be held on for a long period of time. Once the project or building process is complete, the loan should be paid off as soon as possible.
Inventory Financing Loan – If your business has inventory laying around not being used, you can use that inventory as collateral to borrow funds. This would not be an unsecured business loan.
SBA Loans – The Small Business Administration whom is funded by the federal government offers loan guarantees to certified SBA lenders. You must go through rigorous qualification s in order to be approved for an SBA Loan.
In order to be approved for a truly unsecured business loan, you must be able to prove to banks and lending institutions that you are a low risk small business borrower. Unsecured business loans are business loans where the bank approves you for a loan 100% based on your corporate foundation. Your corporate foundation is pretty much your corporate numbers. This includes your business credit scores, your business credit portfolio, your personal credit scores and portfolio, and your financial numbers.
The best way to express how unsecured business loans are for you to out yourself in the banks shoes. What if the banks money was your money? Who would you approve for borrowing your hard earned money? Would you lend it out to a company that doesn’t have a business plan? Would you lend it out to a company that doesn’t have good credit scores? What about a company that isn’t cash flow positive? No, you probably wouldn’t. The reason why you wouldn’t do this is because you would be afraid that t you would not be paid back.
This same concept goes for banks lending to you and your small business. The fastest way to be approved for a unsecured business loan is to make sire you have all your ducks in a row. If you plan on applying for a business loan at your local community bank, ask the commercial loan officer what is needed to be approved for an unsecured business loan. This should give you exactly what you need to prepare.
Here are a few items I know for a fact you are going to nee to be approved for unsecured business financing:
- Good business credit scores with all three business credit reporting agencies.
- A business plan that offers market research in your industry that proves you can be successful.
- Proper financial documents that can prove to a bank that you are organized and cash flow positive.
- Proper articles of incorporation in your state.
- A business address with a business phone number.
There are several more items that you need to take a look at.
What has your experience been with applying for unsecured business loan?
The Small Business Administration (SBA) is a government-run agency which was created to help small businesses, which are the cornerstones of our economy, grow and strive in the business world today. The SBA Micro Loan is a special loan type that is guaranteed by the SBA, which has a maximum loan amount of $35,000 and the average loan amount that is about $13,000. The Micro Loan Program is available specifically to give small loan amounts to small businesses and non-profit childcare centers. The Micro Loan program was made to help startup businesses get off the ground and small businesses looking to create growth.
In order for you to get approved for a SBA Micro Loan, you need to have a good business credit score from the three major reporting agencies, proper financials, and a thorough business plan. If you are a woman business owner, there are also special grants that you can get a hold of if you are looking for a guaranteed SBA financing. One of the most important things a business owner can do at a meeting with a bank, financial institution, or SBA advisor is show that you, the entrepreneur, can handle the loan payments and are a low-risk borrower. This will help ensure that the lender will give the small business owner a loan because they can rest assured that the loan will be paid back correctly.
In order for the SBA to be willing to guarantee a Micro Loan for your small business, you are required to go through a technical assistance program that lays out the rules and guidelines on how the Micro Loan should be used. As long as the small business owner goes through the technical assistance program, and adhere to the tips described, he or she should be able to attain an SBA Loan that is right for his/her business. Like Trey Markel described in a guest blog post at SmallBizDialy.com, being an Entrepreneur can be like surfing; if you wait for the right wave to come and avoid shortcuts, you can succeed in your small business and attain the goals that were set out for.
There are all different kinds of small business loans out there today. It really depends on your business structure and how you operate your business. There are small business loans for all different small business structures. If you are looking for quick cash to make payroll there is a business plan solution. if you are looking to buy equipment for long term use there is a small business plan solution for that as well. No matter what you need in your business, there is a viable financial solution out there.
No matter what kind of small business loan you are looking for, in order to be approved you are going to need to have a good business credit score with all three business credit reporting agencies, a well written business plan, and a business loan application that expresses to the lender what the funds are going to be used for. With new credit reporting technology, lenders can view all three of your business credit scores on one report.
