Small Business Loans: 5 Tips to Get Approved Faster

Every business is associated with transaction of money. Smooth cash transaction is possible only when there is enough funding option and adequate sales. For smaller business, funding is not an easy means. The most common types of funding options available are a business loan. However, the process of application for a business loan is lengthy and is not very easy to obtain. For smooth and easy small business loans, one needs to follow some tips.

  1. Keep your loan documents in perfect order

    – Every business involves one or more number of documents that are directly involved with the financial state of a business. If the financial, accounting and tax records are kept up-to-date and accurate, the process of application process for the business will be easier. Transparency of financial transactions is a must in every business that will benefit you at the end. Hiring a bookkeeper for dealing with the accounting part is a good aspect in avoiding ignorance of maintaining a good proper financial book.

  2. Demonstrate a steady cash flow in your business

    – Cash is king and is also a vital predictor of health and prospects of a business. A clear demonstration of the financial statements, bank statements and tax returns can help you to ensure potential financers that you are able to pay creditors or others at the time. That means the documents provided with a historical perspective about the performance and cash flow of the business. A dip in the cash flow due to loss of any customer or due to recession can be followed by an explanation on an advance.

  3. Maintain a good credit and a manageable debt load

    – Debt load is the amount of balance due that is carried on your balance sheet. You need to demonstrate that you are able to handle your current debt load as well as additional debt repayment that will occur for your proposed financing. You can show how the extra liquidity will be used and forecast the additional revenue that will be received through the loan. Keeping track of your documents is a primary step and in addition, you have to make sure of paying your bills on time. Bankruptcies, foreclosures and late payments should be avoided. Maintaining a good credit is an essential part of the loan application process. Financial institution or lender will go through your credit score.

  4. Know the type of loan you need

    – You need to understand what type of loan that works best for you or your business and is very vital. Getting the business loans to be approved depends upon the program one is applying for. Some of the programs need more documentation in comparison to other programs. Some of the requirements can be a standard business loan, a cash advance against credit card income or merchant cash advance program, loan for buying equipment or foundry, a mortgage loan for commercial purpose, etc.

  5. Understanding every financial institute is different

– Money lending institutions are the prime lenders. Small banks are usually built- up on personal relationships and in large banks, bound by high qualifiers, who may exclude small businesses. You can approach a small bank with your appropriate requirements and query. For choosing the best one for your business, you can compare rates, lease terms, total cost and other options.

What Are The Different New York Business Loans Options

New York City is said to be one of the most competitive regions for starting a business in the entire country and perhaps the world. We are all aware that it is one of the most populous states and city in the U.S and which as a result leads most of the business minded people to start a business in this corner of the U.S.. However, to run a business in such a populous and thriving city, you require great funding for maintaining business in your area.

Irrespective of the industry you belong to, starting a small business in this part of the U.S. has end numbers of advantages. Since it has such a huge local economy, any quality or unique small business can soon write their success story. But then again, such a big sized economy can give a headache to the business owners as you will always find your competitors expanding their business.

This is where the struggle comes as you require proper funds to invest in your business or for upgrading. There are various small business funding or traditional banking loans available that can effectively meet your business funding needs in NYC.

Rollover for Business Startups (ROBS):

In the startup financing world, the Rollover As Business Startups is one of the best-kept secrets. The reason is it again helps in investing funds from the retirement account into the new business. This does not require paying early income taxes and withdrawal penalties.

Cost: It requires an amount of $5,000 for setup along with $140 approx every month as monitoring fees.

Is It The Best Choice For Startups: This is a flexible loan plan and is an excellent choice for almost every startup. The acquired fund from ROBS can be a great choice to serve as down payment for any startup business or as an SBA loan.

Small Business Credit Cards

Both business and personal credit cards can become a cost-effective way for startup financing. Some of them come with 0% APR along with great reward programs or cashback. This can be a great way of business saving if you are someone who uses credit cars along with becoming a part of the business financial toolkit.

Cost: The average Annual Interest Rate is 16% while some cards also have the annual fee that cost $50 -$100.

Is It The Best Choice For Startups: Business credit cards can be a great choice for everyone and need to be a part of the business financial toolkit. In case you are ready for applying for business credit card, you can definitely opt for The Bottom Line Bankers.

SBA Loans for Startup Businesses:

SBA or the Small Business Administration is known for the loan guarantee programs. Some of the basic SBA programs which are best for your startup company are Microloan Program and Community Advantage Program. Both of these targets underserved or new businesses. All SBA loan types can become a great choice for the startups, but some of them are difficult to quality when you do not have any existing business.

Cost: It charges 6 – 9% plus the fees as Annual Interest Rates. You might end up paying 0.5 – 3.5% as the origination fees, $2k – $4k as packaging fees and 3 – 3.5% as SBA guarantee fees.

Is It The Best Choice For Startups: These loans are generally relevant for the self-financed startups along with the experienced startup owners who have been in the management and industry for years. The prime advantage of opting for an SBA loan is because of its long repayment term and low-interest rate. This reduces monthly payments in comparison to other loan options.

Bottom Line:

When it is about looking for financing opting for your startup in NYC, these are the top best options for small business loans available for you. Make sure you check with the skilled banker in order to make the best decisions. Since running business in NYC requires being competitive and which again needs proper funding, opting for the best loans is the best choice.

Leasing or Owning Business Equipment: Know the Difference Between Two

Any business is a big challenge. While starting a business, a lot of processes are involved. Whether it is a product or service-based business, arranging necessary equipment is a vital part. Smooth operation of a venture is dependent primarily on the equipment along with the basic process. In individual business, the requirement of tools is different. For example, a bakery shop requires utensils and apparatus related to baking and keeping the items in good condition. However, a bookstore will require entirely different apparatus and equipment for safekeeping of the books and related items. In each case, the items are as important as the apparatus or tools that are immensely necessary for operating the venture. Even after the initial stage is over, a business might require the equipment while upgrading, repairing or replacing the old ones. However, for arranging the equipment either initially or during up-gradation, you need some financial assistance. Right financing options can get you the things that you need for your business. However, there are two options, one is the financing of equipment and the other one is leasing.

What are equipment financing and leasing?  

For the purchase of equipment, you need financial support, either from your own or from anywhere else. When you need external financial support for purchasing equipment, taking loans for the same can be an option. Equipment financing is something that is designed especially for the purchase of types of equipment, required in business. You need to repay the debt over time and once the debt is completely repaid, the equipment will be your assets. In some cases, the equipment acts as the collateral itself and if by any chance you default, the lender owns the items. Sometimes, the lender imposes a personal guarantee or blanket lien.

In case of leasing, you can take the business equipment for lease. You need to pay a certain amount for the same, but there is no chance of losing an asset. Paying the rent for equipment on monthly basis is enough to help you for using those without purchasing or personal guarantee.

Difference between leasing and owning

In leasing, you do not have to worry about clearing any debts, but only to pay the lease rent. At the end of the lease, you can either renew it or can buy the same. While you want to own the equipment through a loan, you need to make down payment as well as to pay monthly interest for the loan. However, in case of leasing, no down payment is necessary. No collateral, personal guarantee or lien is necessary in case of leasing. Taking equipment on the lease is beneficial than financing in terms of getting approval. Getting a business loan or an equipment loan needs approval from the financial institutions, whereas getting a lease is much easier to qualify for the approval. However, for long-term, leasing is not a good option in terms of costs. Monthly rent in case of leasing is more compared in long-term and you may end up paying more in leasing equipment than in taking loans for that.

However, it all depends on your business and the type of tools or equipment you need as well as your financial condition that you should take a loan or lease it.