We all know how tough these are to obtain and we know they don’t happen quickly but did you know that the SBA has approved over 50,000 of these loans in each of the last two years? Approximately 25-30% of them went to startups so ask us if these are an option for you.
We will help you get setup with freely spendable business credit lines that can be spent on anything your business requires to operate & grow – not just gas or store branded credit. Get the working capital you need today & ask us about getting your funding WITHOUT pledging collateral.
Looking for a small business loan for some equipment? Don’t use your working capital line of credit for a long-term form of debt like this! If you do not have good credit it is fine if you have collateral or a down payment – let us know and we’ll help you finance your equipment the right way!
Perhaps the most popular financing solution of the last 5 years has been what’s referred to as a Merchant Cash Advance. Also known as MCA’s or Cash Advances. In recent years, many companies have moved to models that focus more on bank statements and less on visa/mastercard transactions. At LenCred we’re not big fans of MCA’s because of how costly they are but we absolutely LOVE helping small business owners avoid MCA’s or get out of MCA’s by refinancing to a lower cost business loan. Ask us about our lenders who specialize in 2-10 year repayment terms rather than 6-12 month terms like most MCA lenders. If you do not have good credit (bad credit) that is okay if you’ve got at least $10k/month in revenues.
If you have an established business with a book of receivables out there you should be considering a factoring facility. They can be less expensive than accepting credit cards & with the right lender you’ll have amazing flexibility as well as highly competitive pricing.
Perhaps the most popular form of financing in the franchise industry. If you need funding for your business and you have some retirement savings then don’t trust just anyone with this transaction. Let us know and we can connect you with a qualified professional who can answer all your questions honestly and who has experience working with the IRS to facilitate thousands of these transactions compliantly.
What You Should Do Before Applying for a Small Business Loan
Applying for a small business loan is not something that should be done on a whim. If you want to get approved for a small business loan and make the process as smooth as possible you’ll want to plan ahead and properly prepare yourself. Approaching a lender unprepared is a common cause for denial. In this article I give you several tips on properly preparing yourself to apply for a small business loan. You should do these things before you apply for a small business loan. Doing these things before you apply for a small business loan will help you get approved the first time you apply!
Find a Legitimate Expert Who Can Assist You
According to Intuit’s Future of Small Business Report, if you know where to look and how to qualify you dreams of acquiring capital can become a reality. Your local neighborhood bank branch and/or credit union may not be able to assist someone in your unique situation. That’s why it’s good to know where to go beyond your local area. Funding your dream business can take time and that time can be reduced when you know where to look.
The internet can be a great place to connect with funding consultants (such as underwriters, loan brokers, etc.) who are either direct sources of funding or have long-term relationships with direct lenders. Finding a good funding consultant that is experienced and well-connected in the small business financing industry will enable you to identify the lenders that are most suitable for you.
The best funding consultants will be able to educate you on what you qualify for based on a number of factors including your personal credit history and your personal and/or business income, etc. Additionally, they will be able to help you identify the type of funding you will most likely qualify and what lenders you should approach.
This will save you a tremendous amount of time and increase your chance of getting your loan request approved on the first go-round.
Obtain All 3 of Your Credit Reports & Scores
Obtaining all 3 copies of your credit reports and scores when preparing to apply for a small business loan is important because you’ll want to be aware of your credit standing. Furthermore, if you decide to hire a funding consultant to assist you, they will most likely ask for copies of your credit reports. The best funding consultants will be able to determine your creditworthiness by reviewing and analyzing your credit history. Determining your creditworthiness will enable a funding consultant to figure out the type funding you will most likely qualify (i.e. lines of credit, microloans, SBA loans, etc) for and what lenders you should approach (USAA, CitiBank, Bank of America, Capital One, etc).
Another factor to keep in mind is that your personal credit can be a huge determining factor in whether or not a lender will approve your small business loan request, especially if your business is a startup. Properly managing your credit will enable you to qualify for funding much easier than those who have damaged credit. Proper credit management consists of paying your bills on time (whether loans or lines of credit), and being able to maintain your credit accounts over a long period of time (at least 5 years of timely payments is ideal).
Gather All Required Documentation
Lenders will want to see certain documentation when you submit your loan application. These documents often include:
A business plan, with marketing plan and at least 3 years of financial projections
The last 2 years of tax returns (business and/or personal).
Your personal financial statement.
Your personal and/or business bank statements
Your accounts receivables
Your purchase orders
A list of your business and/or personal collateral
Depending on the lender, you may or may not have to submit the documentation outlined here. The right funding consultant will be able to tell you what documentation you’ll need to submit and help you submit it. Gathering the required documentation before approaching a lender will help speed up the decision process.
Those Who Prepare Get Approved
According to Intuit’s Future of Small Business Report, lenders are lending to qualified small business owners. If you are creditworthy, have a business plan, revenues, a consistent income, and/or collateral, you’ll find that your chances of getting approved for a small business loan increase tenfold. It pays to properly prepare yourself before applying for a small business loan.
3 Things You Should Pay Attention to When Analyzing a Small Business Loan Offer
If you’ve applied for a small business loan and you’ve been approved, there are a few things you will want to analyze before deciding to accept the offer. It’s unwise to accept just any small business loan offer, even if your business is dire need of funding. You don’t want to accept a small business loan offer and regret it later because it cost you an arm and a leg.
To determine how much a small business loan will cost you over time, it’s important to analyze the different components of it. This includes the terms, interest rates/APR (i.e. annual percentage rate), and other fees (I.e. closing fees). Below, I explain the meaning of each and how it affects the overall cost of your small business loan.
Term – The term of the small business loan is how much time you have to pay it back. When you get approved for a small business loan, you are required to back it pay in monthly increments over a term. The monthly payback amount includes the balance borrowed and interest rate. Depending on the nature of your business and financial situation, you may need a longer term to pay back the small business loan. When analyzing a small business loan offer, keep in mind the amount of time you will have to pay it back.
Interest Rate/APR (Annual Percentage Rate) – You will be charged a percentage of the small business loan for borrowing the small business loan. You will have to pay this percentage of the small business loan on top of the original balance borrowed. According to NerdWallet, the APR is what truly communicates the overall cost of a small business loan. It determines the total amount you are actually required to pay back. When analyzing a small business loan offer, keep in mind the amount you will have to pay back in combination with the original loan amount.
Other Fees (i.e. Closing Fees) – Some small business loans have a closing fee associated with them. These are usually non-recurring fees that are only due at the time of the loan closing (i.e. when you sign the documents to accept the small business loan offer). The amount of the closing fee usually comes out of the small business loan you’re offered. Therefore the overall amount you end up with from the small business loan is just a tad bit smaller. You are still, however, required to back the full small business loan amount, since, technically the closing fee came out the loan you accepted.