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Business Loans (Volume 4)

BUSINESS LOANS (VOLUME 4)

 

 

By

Word Chapter

 

 

 

Shakespir EDITION

 

 

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PUBLISHED BY:

Word Chapter on Shakespir

 

 

Business Loans (Volume 4)

Copyright © 2016 by Word Chapter

 

 

 

COPYRIGHT NOTICE

 

All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, without the prior written permission of the publisher.

 

DISCLAIMER

 

All the material contained in this book is provided for educational and informational purposes only. No responsibility can be taken for any results or outcomes resulting from the use of this material.

 

While every attempt has been made to provide information that is both accurate and effective, the author does not assume any responsibility for the accuracy or use/misuse of this information.

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How to Secure Loans through Understanding your Financial Statement

Read more Business Loans articles: http://j.mp/29NuPE5

Every document concerning cash flow (both inward bound money and money going outside) are crucial to a business. Financial statement is one document people do not take seriously but a glance at the inscription on such papers has a lot to tell your financial institution and may just be enough to convince them to grant or decline your request for loans. Businesses are advised to have good financial records that effectively capture all the facets of the business.

Your financials is your number one priority

The number one priority of every business is to grow their financial base. If the financial base is not growing after sometime and at a certain amount, then the business can be termed a failure. Financial challenges in profit and cash flow can make or mar a company. To effectively manage the cash flow, a business owner or financial manager should know the drivers of such of the business cash movement.

Company’s gross margin affects the type of loans they can take

A higher gross margin paves way for increased profit. This can also affect the financing product you can have access to. Many companies have used the ‘factoring’ which is also referred to as A/R financing. The high gross margin will let your business absorb the cost of financing which is usually higher than Canadian Chartered Bank financing.

Some firms only seek to finance their inventory

Inventory of a firm is a record of its asset (more like store keeping). Businesses that seek investment into their inventory may aim at some specific forms of financing which include inventory loans, bank revolving credit lines and non-asset based lines of credit.

Your business is summarized on your balance sheet

A well-documented balance sheet will contain the list of your inventory. When your financials look at your balance sheet, they would be able to tell you how fast your inventory changes to cash, your gross margin and predict the amount of profit you will get depending on the product you sell.

Business owners often analyze your balance sheet

Naturally, some business owners would refute the analysis of their financials but if they can take out time to calculate their inventory turnover and receivables, that is only when they can categorically say if the financials were wrong or right.

Business lines of credit can be used to feed working capital

From the balance sheet, it will be easy to tell exactly how much is expended on the day to day running of the business. Business line of credit would affect factors on the balance sheet such as payroll needs, investment in the future and general balance sheet payables. When you have an understanding of your financial records, you will be able to tell the financial needs of your business at every point in time, the turnover of your asset and the amount of debt that can be effectively managed by your business.

Consult financial expert before taking any loan

As a business owner, it is wrong to just take up loans without analyzing your business to know how efficiently it can utilize and churn out the loan. To be sure of which loan product that would benefit your business, it is necessary to always consult an experienced financing advisor. They will scrutinize your balance sheet and can give you credible advice on what loans to take up and even the amount that should be taken so that the business will be able to get the maximum benefit from the loan.

Article highlights

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A good financial statement can guarantee you a loan.

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p<>{color:#000;}. Let financial advisors scrutinize your business to know the best loan for you.

*
p<>{color:#000;}. Balance sheet can be used to deduce the daily profit of your business.

*
p<>{color:#000;}. It is unwise to take up loans without proper business analysis.

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p<>{color:#000;}. Taking loans for the wrong reasons can keep you in perpetual debt.

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p<>{color:#000;}. A particular section of a business can be targeted for investment.

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p<>{color:#000;}. There are times when taking a loan is the only option left to keep the business running.

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p<>{color:#000;}. Cash flow drivers should be identified and given more priority.

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p<>{color:#000;}. Every business should have good financial record.

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p<>{color:#000;}. Target the financial institution that solves your problem the best way.

Read more Business Loans articles: http://j.mp/29NuPE5

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Make Haste for Bridge Loans

Read more Business Loans articles: http://j.mp/29NuPE5

Everyone is happy and looks forward to every kind of improvement like buying a new car, refurnishing a new house and maybe a good vacation with the entire glamor that goes with it. To meet this dream (because most times, salaries are not enough) people have engaged in different means of sourcing for funds.

Bridge loans have been of great benefit to people

Bridge loans are those loans that play mediatory roles. They are taken for a short time and paid back. Because people going for bridge loans already know it is a short term loan, they would have made plans on how to pay back when due to avoid embarrassment.

Short term loans bring the most happiness

Short term loans have been known to bring the most happiness because the reasons why they are taken up are mostly urgent and pressing. The benefits are also reaped immediately (nothing gives joy like when your demands can be met almost immediately).

The temptation of taking more than you need is reduced

One of the major problems long term loans seekers face is the urge to take more than they need. Having in mind that the loan would be paid back in years’ time, they tend to request for more than they need. When taking short term loans on the other hand, the loan seeker is already aware of the shortness of the loan and would not want to over burden their payback plan by taking too much. They would only want to take up the loan for urgent needs.

Revenue from the project is used to facilitate repayment of loan

Some projects like purchase of equipment would need to be carried out urgently. Some equipment can lead to increase production or its efficiency. Such increased output would lead to increase in revenue which would facilitate payment of the loan in the shortest possible time.

A short term loan means affordable interest

The accruing interest is what usually drives away people from taking loans. Bridge loans are short term loans meaning a short time for interest, a short time for borrowers to get their loans for the desired project. In many ways, bridge loans help the borrower to be more organized.

Bridge loans can serve many purposes

The functions that bridge loans can slip into are enormous. It can be used for retrieving property from closure, property purchase and laying foundation for long term financing. It is easier to get long term loans when the project for which it is requested for is already underway.

Enough time is given for repayment

The apprehension that prevents people from taking short term loans is the short duration before payback. Many will be skeptic if they would ever get the money before pay day comes. Bridge loans will give you enough time to payback your debt. It has benefits that can be compared to hard money loans. One of the things that make obtaining this loan speedy is that authorization will be required only later and not before the loan is disbursed.

Bridge loans come handy when associations fail

There are times in a partnership when one party may decide to throw in the towel while the other will prefer to move on. This would mean that the asset would be divided. What is left may not be enough for the party that wants to move on and bridge loans can be used to bridge the gap of such exit till the business grows to take care of itself.

Article highlights

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Bridge loans can help a failed partnership to move on.

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p<>{color:#000;}. Every business aims to reach an enviable height.

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p<>{color:#000;}. The most difficult challenge businesses face is shortage of funds.

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p<>{color:#000;}. Bridge loans are more speedily processed than traditional loans.

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p<>{color:#000;}. Authorization is not necessarily done before loan is given out.

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p<>{color:#000;}. Lenders will give you enough time to pay back.

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p<>{color:#000;}. Loans can serve more than one purpose.

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p<>{color:#000;}. They are short term loans.

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p<>{color:#000;}. The gap between the wait for long term loan is bridged.

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p<>{color:#000;}. Comes in handy when project needs urgent attention.

Read more Business Loans articles: http://j.mp/29NuPE5

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Bank Financing and Other Alternative Sources of Funding in Canada

Read more Business Loans articles: http://j.mp/29NuPE5

Canadian small businesses are faced with the problem of funding. There are more than adequate banks to serve the loan needs of all Canadian small businesses. Likewise, there are lots of loan products to choose from including credits, fixed loans and variety of products and services. However, the major challenge that still remains is that some of the businesses are grappling with the way banks reason so that they would not find themselves in trouble in the long term.

Canadian banks are among the top in the world

There is wide availability of funds for Canadian businesses. The most interesting part is that Canadian banks are ranked among the best in the world in capital, profits, management and so on. This means that business owners can trust the source of their funding. They can also be sure of getting reputable advice on their business.

Being top class means more hurdles

For the fact that banks in Canada are top class, it means the requirements to secure a loan would also be higher and this can be a huge setback to small businesses that may not be able to present such documents. Some of the requirements would include collateral, cash flow records, personal guarantee and conservative loan to value scenario. Getting a personal guarantee is not usually easy because it involves a lot of explaining and trust for the guarantors to agree to withhold their asset on your behalf.

Interest rates by banks may be frustrating

It is not always easy when you have to do all the work and in the end share your proceeds with those who did not have a hand in your labor. That is just the way it may seem to small business owners and managers. On the part of the bank, the interest rate may seem fair but the businesses won’t see it in the same light.

Alternatives should be considered

Canadian banks are really great in trying to help businesses grow (and if you have had a long standing personal relationship with them, you can trust that things will be a lot easier too) but the setbacks mentioned earlier makes it necessary to consider alternatives.

Asset based lenders are a good alternative

Unlike banks that would go as far as looking at characters and guarantors and the rest of them, asset based lenders will only focus on the asset of the company (more like separate the individual from the organization). Asset here refers to inventory, receivables, equipment and real estate (where it is applicable). They lend according to the capacity of your asset. This may be a problem to someone whose dream is bigger than their asset.

Account receivables and sales make a good source of finance

There is a form of financing that only makes use of account receivables and sales growth (A/R and sales). You can consider this type of financing when your sales are on the rise but you have tried your hands unsuccessfully at the traditional form of financing. Let the sales record do the magic for you.

Other forms of financing exists that have different requirements

Forms of financing often take the name of their requirement. The various other financing alternatives available include; PO finance, inventory loans, sales leasebacks, equipment financing and working capital term loan.

Seek advice from the professionals

The choice of which form of financing suits your business may be hard to make. If you find yourself in this trap, it is always best to consult a trusted Canadian business financing advisor to assist you.

Article highlights

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Canadian banks are ranked top in the world.

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p<>{color:#000;}. Funding remains the problem of small businesses.

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p<>{color:#000;}. Traditional loans are a rigorous procedure.

*
p<>{color:#000;}. Your sales record can get you loan.

*
p<>{color:#000;}. Banks often judge a business by the character of the owner or management.

*
p<>{color:#000;}. Alternative loans should be considered if traditional loans fail.

*
p<>{color:#000;}. Interest rates are always a source of worry to small businesses.

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p<>{color:#000;}. Asset based lenders cannot lend more than the asset of the business’ worth.

*
p<>{color:#000;}. Loans are often named after their requirement.

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p<>{color:#000;}. Seek expert advice before committing to any loan.

Read more Business Loans articles: http://j.mp/29NuPE5

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Factors That Would Require a Term Loan

Read more Business Loans articles: http://j.mp/29NuPE5

If there is one thing that businesses are scared of, it is getting into debt or too much of it. However, there are times when debts are inevitable and they mostly come in the forms of loans. At some point in the life of every individual, loan may be required to settle some business or personal issues as the case may be.

Businesses benefit more from loans

Money does to businesses what blood does to the human body. For any business to stay alive, money needs to be in constant circulation. Timely infusion of funds in the form of loans will keep the daily operations running and that would translate to greater output which is the target of any business.

Successful businesses got to where they are by taking risks

Trying to avoid falling into debt as a business owner may be a smart one logically but not to your business because you would be chocking it to death. The United States presidential aspirant Donald J Trump got to his billionaire status by taking some form of calculated risks that involved loan money at some point in time.

Future expansion of any business is tied to loans

It has become like unvoiced principle that the funds that should go into expansion, purchase of equipment, hiring more skilled manpower, and some part of the running cost should be borrowed. The logic behind this is that using a borrowed money to expand will allow the capital to be channeled more output. If the business has a defined long term payment plan and income plan, loans will definitely be the perfect short term solution to financial crunch in business.

Term loans have a short life span

Offering a term loan is usually quicker than the long term loan. Term loan is a loan product for businesses that need money to solve immediate problems in the home or in their businesses. Banks would willingly offer loan products to businesses and individuals if they study the following documents and are satisfied; their requirement, income, collateral, recovery plan, credit score and possibly tax records.

Up-scaling in business procedures would require term loan

No business would want to remain on the spot where they are for years. The target is often centered on increasing output and workforce. These expansions may involve bringing in new technology from abroad. When the aforementioned have been knocked into place, the revenue generation of the company should have increased and they can easily pay back the borrowed money without breaking a sweat.

Operating from a rented apartment increases running cost of a business

Rented apartments greatly add to the running cost of a business. Owning their own apartment or offices or premises is the dream of every business because it means they can reinvest the rest in something more productive that would further yield revenue to the company. The fund gap for such purchase can easily come from term loan.

Expansion of businesses comes with a cost

The expansion of any business is thrilling and often sounds like a dream come true but what follows behind is not palatable to the throat and the worst of them all is increase in bills which would put a strain to working capital. Term loan can ease the tension.

Trading in securities has their own shortfalls

Those who trade in the securities market can go out of cash which means they may not be able to purchase high value stocks and IPOs. To bridge that gap, they can easily take term loans.

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Term loan is a short term loan for solving immediate problems.

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p<>{color:#000;}. Businesses are always skeptic about borrowing.

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p<>{color:#000;}. Borrowing is wise if the business has an income plan.

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p<>{color:#000;}. Term loans can aid those trading in securities.

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p<>{color:#000;}. There is an unwritten law that expansion funds should be borrowed.

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p<>{color:#000;}. Term loans are quicker than the traditional loans.

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p<>{color:#000;}. Banks would require some documents to give out term loans.

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p<>{color:#000;}. Successful businesses have taken loans at one point or another.

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p<>{color:#000;}. Loans will free up capital to service running cost.

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p<>{color:#000;}. A loan invested in equipment that increases the revenue of the business would be easy to pay back.

Read more Business Loans articles: http://j.mp/29NuPE5

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Hiring a Good Commercial Financing Company for Business Expansion in Japan

Read more Business Loans articles: http://j.mp/29NuPE5

The commercial city of Tokyo in Japan is a home of opportunities for intending investors. The government policies encourage the growth of companies. As a budding investor hoping to expand your company, things can get a little scary. This is why everyone needs a commercial financing company to cover their backs at such times.

Company expansion is a money gulping move

Expansion is a vital part of any company and often included in their long term goals. Finance is mostly the reason why some expansion plans fail. Company expansion would mean purchase of new and higher equipment, employing more hands to handle the growing job and a general increase in the running cost of the company. If the company’s immediate income cannot handle it, there will be a need to borrow to augment the available funds.

Loan processing takes a lot of time

The first direction many companies seeking for funds would seek to obtain money from is commercial banks. It is true that commercial banks make most of their money through interests they get from the loans they gave out but most often, they will have to verify to make sure that you have the capacity to pay back before they would be ready to part with a dine for you. This verification process involves a long row of documents, from financial records to tax receipts, not every company may be willing to wait for it.

Good commercial financing company will hasten loan processing

The hectic nature of obtaining loans can be shortened with the help of a good commercial financing company. This is possible because they have a deep knowledge of the financial sector and would present you with a foreknowledge of what to expect so that you get the documents ready before hand. They also have lots of business financing plans including B2B that they could help you tap into instead of having only one funding plan.

Commercial financing company would help you recover blocked money

Money laundering which is the transfer of money across boarder is a serious crime among many nations. Sadly, their activities have remained on the increase. To stem the tide, many countries have put up regulatory bodies to help check such illegal movements. Because of this, a fund that was supposed to reach your company from another nation may be blocked. Commercial financing company would help you recover such blocked moneys.

Budding businesses need information more than money

Small businesses and those aiming to expand are often preoccupied by source of funding that they forget that every business needs information to grow. For an expensive project in Tokyo to be a success, commercial financing companies would lend the business innovative strategies, business plan and ideas that would boost the business financially.

Online financial company based in Tokyo offer advice at no cost

Every step a business takes, especially at the early stages, is crucial to their survival. Online financial companies have well groomed business planners, statisticians and consultants trained in economics, business management and business administration. You can contact any of them online at no cost and have your issues sorted out.

You have no reason for your business failure in Tokyo

If you ever start a business or try to expand an existing one in Tokyo and it fails, then, you have no excuse because these online financial companies are readily available to render services in the area of business expansion, business start-up and creating more spaces to fit more employees if you contact them.

Article highlights

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Tokyo is a home of opportunities to investors.

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p<>{color:#000;}. Lack of money is often the reason why some companies cannot expand.

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p<>{color:#000;}. Companies would first seek for loans at commercial banks.

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p<>{color:#000;}. The process for obtaining loans is a tedious one.

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p<>{color:#000;}. Businesses need innovative information more than money.

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p<>{color:#000;}. Company expansion is a financial demanding process.

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p<>{color:#000;}. Online financial companies offer advice at no cost.

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p<>{color:#000;}. Financial companies can help you recover blocked and lost money.

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p<>{color:#000;}. Bank incomes come majorly from interests on loans.

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p<>{color:#000;}. Verification helps banks to authenticate the identity of the loan seeker.

Read more Business Loans articles: http://j.mp/29NuPE5

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The Impact of Business Appraisal on Old Companies

Read more Business Loans articles: http://j.mp/29NuPE5

It is stated that every business has a life cycle which follows a fixed pattern. It is worrisome that new small businesses in recent times do not live beyond a decade. It is agreed that the economy of a nation is largely under the control of such small businesses therefore if they keep folding up after a short time, one can only imagine what would happen to the economy of the nation in the long run.

The life cycle of a business is calculated in four phases

There are four pointers that are used to determine the growth of businesses. The first is the introduction (talking about when it was brought into the market). This is followed by growth (the expansion of the business over time). Next is maturation (when the business has reached its peak of production and expansion). What trails every business in the end is decline.

Some businesses have defied the decline stage

Once in a while, a business tends to surprise us by springing up from the old ones to start the four phases all over again. These kinds of businesses often outlive one generation. However, most businesses on getting to the fourth phase will chose the easy way out which is liquidation or divestment.

There is a limitation on the sale of dying old companies

When you are trying to sell off a dying old company, the main challenge you will have is that prospective buyers will appraise it lowly because they think it is not worth much. The result of low appraisal is underpricing which can be viewed as taking advantage of the seller. The second challenge is that buyers would focus more on the risk and insist that the business be sold at a discounted price.

Old businesses develop value over time

It is unethical for any business owner to sell a business, no matter how old, below the initial value. It should be noted that small business funding irrespective of age grows in value over time and these values would need to be converted into money in the interest of the business owner.

Business appraisal is required for old companies

To eliminate all the setbacks in selling an old company, a business appraisal would be required and it is paramount that this appraisal should be carried out by a third party so that the prospective buyer would not have any problem as regards its authenticity.

Third party agents would demand the documents of the business

There are several third party agents out there that are involved in the appraisal of old businesses. To do this efficiently, they would demand for all the necessary documents of the business and provide the business with a certified report.

There are a number of problems with third party agents

Hiring a third party agent is not also an easy task. Their work will take a neck breaking time to reach completion and these agents are often very expensive to hire. A business owner looking to sell off an old business may not find these factors favorable.

The solution to appraisal of old businesses

Technology has succeeded in solving more than one problem in business and business appraisal of old companies is one of the problems technology has been able to solve. There are softwares that have been developed to brilliantly conduct business appraisal online. They use well programed algorithm to provide timely and accurate appraisal of the old business. The good news is that there are many of such software out there.

Care should be taken in selecting software

Not all the software out there on business appraisal are good and care need to be taken to select the right one. Some software may fail in presenting the result in readable formats.

Article highlights

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Old businesses are undervalued by buyers.

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p<>{color:#000;}. It is not right to sell a business below its worth.

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p<>{color:#000;}. Buyers would focus on the risk of buying such businesses.

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p<>{color:#000;}. Every business has a life cycle.

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p<>{color:#000;}. Some business defy the four step life cycle of a business.

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p<>{color:#000;}. Third party agent appraisal is less likely to be rejected by buyers.

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p<>{color:#000;}. Third party appraisal takes a lot of time.

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p<>{color:#000;}. Economy of a nation is controlled by business.

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p<>{color:#000;}. Software makes appraisal faster and cheaper.

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p<>{color:#000;}. Care should be taken in selection of software.

Read more Business Loans articles: http://j.mp/29NuPE5

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Utilizing Business Finances Efficiently to Make it Stress Free

Read more Business Loans articles: http://j.mp/29NuPE5

There is no doubt that every viable business at one point in their life cycle will require a loan to enable it run the capital and reoccurring cost of running the business as well as for expanding the business. Reoccurring cost majorly arises from payment of the wages of the workers – needless to mention that this is vital to keep the high spirit of the workers for maximal productivity.

Business expansion is always a long term goal of every business

No business would want to remain stunted forever. However, not all business has what it takes to successfully expand. Expansion of business is a capital intensive project that involves lots of funding. Loans are often the only alternative to getting the required funding. Expansion of business is vital because it increases the profit margin of the business as well as ward of competitors.

Financial loans can come from different sources

The most popular source of funding for businesses – which sadly is the only form of financing that most business owners are aware of, is the bank loans. There are other alternative forms of funding some of which are yet to gain full trust of businesses. No matter which form, businesses going for loans are always nervous regards if they have what it takes to efficiently handle the loan.

Credit history is a key requirement to obtaining loan

Irrespective of the form of financing you may choose to get your business off the ground, one requirement that is general to all of them is credit history. Newer forms of financing may place much emphasis in addition to credit history, assets. Some of the newer forms of financing are A/R financing, asset based business credit lines, tax credit financing and so on.

Effective utilization of loan is not rocket science

In other words, the ability of any business to effectively utilize a loan depends on some common sense knowledge and not like the milky way of the galaxy which can only be imagined. A business that has a business plan, a well understood cash flow statistics and revenue forecast is more likely to have it easy with loans than one that bases all their operations on chance and luck – they will one day run out of both.

Assets can be used in business to obtain funds

Assets are often used as collaterals in business to obtain loans. The good news is that such assets can be business asset – such as equipment and inventory – and not personal assets so that if business fails, you lose nothing that is personal. However, some funding sources – such as the government guaranteed small business loans – makes it compulsory that personal assets must be put on the line.

It is a good idea to have a great commercial banker in your team

Every business that wants to get loans on the easy grounds will need an insider’s opinion, not necessarily a broker but a banker. They will be able to fasttrack your loans and let you know if there are available discounts to which you can key into. They can deliver unlimited loans to you if you have what it takes and these includes; well documented cash flow, owner personal credit, assets, management depth.

Work with a financial advisor if you still feel insecure

If you still feel insecure about obtaining a loan even when you have what it takes, the best thing to do is to work with a trusted business financing advisor. Business financing advisors can aid you with banking needs, alternative solution and business loans.

Article highlights

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Expansion is a crucial part of any business.

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p<>{color:#000;}. Businesses have expansion as their long term goals.

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p<>{color:#000;}. Expansion can help a business owner defeat her competitors.

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p<>{color:#000;}. There are different sources for financing a business.

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p<>{color:#000;}. Bank loans remain the most common form of business financing.

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p<>{color:#000;}. Different forms of loans usually have different requirements for obtaining them.

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p<>{color:#000;}. A good business plan and better understanding of cash flow in a business aid fund utilization.

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p<>{color:#000;}. A good financial advisor can help you suggest the best loan for your business.

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p<>{color:#000;}. Funds can be obtained using assets.

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p<>{color:#000;}. Having a banker as a friend will avail you vital information.

Read more Business Loans articles: http://j.mp/29NuPE5

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Easy Ways to Get a Business Loan

Read more Business Loans articles: http://j.mp/29NuPE5

Securing a business loan can be challenging for any business, whether big or small. The challenge becomes more when the business is a small business. Small businesses are considered as high risk businesses because they can close up at any time and no lender would want to risk their money on such businesses. Small business owners aiming to get easy financing may have to take a few measures.

Startup loans are diminishing

One thing that is harder than seeking a loan for small business is trying to get a loan to start up your own business. Such loans are gradually becoming extinct with increasing economic downslide. In the not so distant past, a good business plan could guarantee you a loan but that is not the case anymore. Many new business ideas have been killed by this lack of loans.

There are different reasons why people need loans

Not everyone would want to be an employee forever. Ambitious employees would always aspire to have their own businesses. Having your own business guarantees rest of mind. A personal business will also help you to live your dreams and remove the limit that paid employment normally places on the limit you can go.

Lenders will look at your credit records

To increase your chance of getting a loan, you have to keep a clean credit record. The first thing that lenders will look at is your credit record. Whether it is bank loan or SBA, most lenders will look at your credit records for the past three years. As a business owner looking for a loan you have to make sure that your credit records are free of bad records.

Most lenders would require that you guarantee the loan

To make sure that their money is in safe hands, most lenders would require that you guarantee the loans with collateral. If the collateral in the business is not sufficient, they may require some of your personal properties in its place. The purpose of collateral is to build trust with the client and ensure they do not run away with the loans they have received.

Telling your company story can make the lender approve the loan

Those seeking for loans often commit the blunder of refusing to reveal to the lender why they need the money and how the loan, if approved, can improve their businesses. Borrowers should understand that lenders are also passionate humans who can make compromises. There are times when you may not meet with the minimum requirement but telling such stories about your company background and prospects would make the lender approve the loan. Stories about the prospects of the business are even more paramount and is the one most loan seekers miss out while dwelling on their successes. 

Businesses that meet local needs are more likely to get loans

International lenders prefer to give out money to businesses that meets a particular local need. Irrespective of the successes your business has achieved financially, if it does not meet a local need, international lenders would not spare it a second look when it applies for a loan. This is not peculiar to loans alone. Government grants also favor businesses that meet local need because the motive behind most government loans is to solve more local problems.

The law of loan is using what you have to get what you want

Different loans have different requirements and as a business owner it is wise to go for loans for which you meet most of the requirements. Your chances of getting such loans will always be higher.

Article highlights

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Small businesses always find it difficult to secure loans.

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p<>{color:#000;}. The difficulty of getting loan is greater for those starting new business.

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p<>{color:#000;}. Small businesses are grouped under high risk businesses.

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p<>{color:#000;}. Credit records are one of the things lenders look at.

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p<>{color:#000;}. Different loans have different requirements that a lender will request.

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p<>{color:#000;}. When applying for loans, always mention the prospects of your business.

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p<>{color:#000;}. Businesses that satisfy some local needs are favored by international lenders.

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p<>{color:#000;}. Collateral cannot be completely ruled out to secure loans.

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p<>{color:#000;}. There are different financial institutions that can grant small businesses loan facility.

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p<>{color:#000;}. Bad credit record will kill your chances of getting a loan.

Read more Business Loans articles: http://j.mp/29NuPE5

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The Fortune of Small Businesses is Being Transformed by Revenue Loans

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The growth of any business idea depends to a large extent the amount of funds they can access. A small business founded by an individual can blossom to the point where it becomes a public liability company with lots of investors and stand the chance of being listed on the stock market – which is the height of any business.

More financing options are opening up for small businesses

Unlike in the distant past when commercial banks and maybe thrift or cooperatives among business owners was the only source of funding for small businesses, the tide has changed rapidly and now, there are a lot of options available to them to choose from. Many of the new funding sources would rather look at the prospects of the business rather than the size of collateral they have.

Investors are playing a huge role in the life of small businesses

The transformation of most small businesses into mega businesses owe their vote of thanks to the different roles played by investors. To emphasize the important of investors, the founder and CEO of Zamato, Deepinder Goyal, has made it paramount and a point of duty to keep in touch with all the potential investors of Zamato. Investors are in fact the major source of revenue loans to small businesses.

Small businesses should always aim to lure investors

Deepinder Goyal keeps potential investors updated on the innovations and new happenings in the company. This is the mentality that small businesses should have. Small businesses should always come up with innovative programs that will either bring in new investors or give the existing investors a reason to stay. Small businesses that lack innovation will soon be out of business.

Investors look beyond the present into the future

The reason why an investor will be willing to invest in a small business even when the traditional lenders fail is because most times they do not consider the current state of the business but rather will take their time to evaluate the future prospects of the business. If from their evaluation they think the business has something new to bring to the table, they can easily throw in their money hoping to reap from the dividends of the business in the future.

There are various small businesses can keep investors engaged

Every small business should engage their investors or prospective investors in one or more ways. The very common way in which a business can engage investors is by sending them e-mails on a weekly or monthly basis. You can also prepare newsletters containing important news about the business or anything you want your investors to know about and send it across.

The presence of an investor can benefit a business in several ways

Most small businesses owe their successful expansion to the intervention of investors agreeing to offer them revenue loans. Besides expansion, investors have also made some business diversification possible. Any business that wants to be a success needs to have more than one source of income and that is how diversification of production or services has helped many businesses become rich.

Cooperation and trust is all investors desire from small businesses

Most investors will require nothing more than the cooperation and trust to consent to invest their money into a small business. Co-founder and CEO of Ola Cabs, Bhavish Aggarwal, has raised several thousands of dollars from investors. Their latest was raising $210 million from SoftBank Internet and Media Inc. Their success has a lot to do with their good will and cooperation with their investors.

Article highlights

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Investors look more at the prospects of a small business rather than collateral.

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p<>{color:#000;}. Small businesses are seriously limited by funds.

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p<>{color:#000;}. Investors need to gain the trust of small businesses to be able to invest in them.

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p<>{color:#000;}. There are more funding options available for small businesses now.

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p<>{color:#000;}. Small businesses need to have programs that would lure investors.

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p<>{color:#000;}. Investors need to be in the know of the current happenings in the business.

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p<>{color:#000;}. One way of carrying investors along is sending them regular emails.

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p<>{color:#000;}. Diversification of business is more important than expansion.

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p<>{color:#000;}. The action of investors can be considered as revenue loans.

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p<>{color:#000;}. Bank loan used to be the only source of funding for small businesses.

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Business Loan Myths that should be Erased from the Mind

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The road to becoming an entrepreneur is a steep one. Important decisions will need to be made and you will have to take full responsibility of such decisions you have made. The noise on your way up this steep profession is often noisy because you will get to hear many ideas from different people but take note that it is not all you hear that are true.

Every business needs money to grow

As an entrepreneur or an aspiring entrepreneur, one thing that you would notice quickly is the vital role finance plays in businesses. The sad truth is that financing is not readily available and whenever you come across one, they are laden with so many conditions that you may feel reluctant about going for them. Many business loans misconceptions have been spread and if you have ever heard any of the misconceptions, your inertia to taking up loans will increase.

Some of the misconceptions come from people who are not in tune with recent information on business

There are some business practices that used to be the normal practice but have been swept away by time now. Those who are not aware of the recent changes in business will still stick to this old knowledge. A few of the misconceptions are discussed below;

1. Loans can only be obtained from banks

Banks may be the only source of loans in the past but that is not the case anymore. The ways in which an entrepreneur can source for funds continues to increase. The internet has had great influence on this. The currently available sources of funding include online lenders, venture capitalist, business lending companies, NBFCs and crowdfunding.

2. You do not need a business plan to start a business

Well, the popularity of this maxim may be connected with the rate of failure of most businesses a few years after they have been set up. A business without a business plan is like a man going on a long journey for which he has no direction. A business plan summarizes all the business activity and projections (target market, financing method, projected revenue and so on).

3. You can grab money from wherever it comes

Before you plan to take up any loan, take the pain of going through the terms of the loan. The terms attached to some loans are so stringent that they can harm your business instead of helping it to grow. The interest rate of any loan should be of great concern to the entrepreneur. If you cannot take the decision alone, consult a business financial advisor.

4. Poor credit score means no loan

Commercial banks still us high credit score as the criteria for giving out loans and this has helped to further boost this myth. On the contrary, some of the new forms of lenders usually have different other criteria they will require to give out loan – even a poor credit score will get you a loan with them.

5. A loan is an additional burden

The startup of businesses is mostly financially involving and while thinking of a new office space, you may consider a loan too much of an additional burden. However, it is better to go for a loan than investing in new office space.

6. The documentation for loans takes an awfully long time

This is not the case anymore especially with the emerging lenders. Some of the new lenders process and give out loan facility to their clients within 48 hours. This has challenged the conventional bank delays.

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A number of business loan myths have been spread over the years.

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p<>{color:#000;}. The internet has changed the way of doing business.

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p<>{color:#000;}. The early stages of a business are financially involving.

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p<>{color:#000;}. Business misconceptions are spread by those who do not have access to recent information.

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p<>{color:#000;}. Loans can be obtained from different sources other than banks.

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p<>{color:#000;}. It is good to scrutinize the interest of a loan before taking it.

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p<>{color:#000;}. Documentation time for loans has been sliced.

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p<>{color:#000;}. One can get loan in 48 hours now.

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p<>{color:#000;}. Credit score is no longer a problem.

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p<>{color:#000;}. Business plan is paramount for any business.

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p<>{color:#000;}. Getting finance is one of the challenges entrepreneurs face.

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Cover image credit: https://www.flickr.com/photos/usdagov/6233307032/

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Business Loans (Volume 4)

From small to corporate business owners and/or managers may need business loans. In this modern age, it is getting hard to run business without any loan when a business starts growing. When a business is growing, it is hard to cover all financial needs with personal finance. There are many other situations when a business loan becomes necessary. This book will give you some insights about getting and managing business loans. Download and read this easy to read and understand book.

  • ISBN: 9781370344406
  • Author: Word Chapter
  • Published: 2016-09-23 17:35:08
  • Words: 7339
Business Loans (Volume 4) Business Loans (Volume 4)