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.

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Debt Consolidation Loans: Make The Right Decision

When it is about starting your own business, you definitely need to think about securing your finance. Well, very often we get to hear about the term “Debt consolidation loan” which is said to be a great way to stay away from debt. There is no doubt that it is a great idea when it is being used only when there is right financial and debt situation. Prior to choosing anyone from the range of debt relief choices available in the market, you require comprehending the financial position. Unless you have complete knowledge about it, you might end up making a wrong decision resulting in wasting your money.

You can definitely get in-depth knowledge about from the bankers, but before that, you require knowing the many reasons. Let us take a look at the reason which makes debt consolidation a great idea.

Three Reasons That Makes Debt Consolidation A Great Choice:

When you have set your heart on making use of debt consolidation loan in order to get rid of debt, you require taking into consideration the different factors. You definitely need to focus on the three significant factors before making any decision of applying it.

It is a great idea when

  • You need to reduce the high-interest debt rates:

When lowering the interest rate gets impossible, it is not an excellent choice to consolidate. Why will you spend more to simplify your debts? Even when it says to ease the payment terms but you are paying high interest rates, you definitely need to start reconsidering. Make sure you always opt for the lowest prices.

The simple thing is you can get a low rate of interest only when you have an excellent credit score. If by any chance you do not have a decent score, you should focus on improving credit score.

  • When you are done with juggling many credit accounts:

This is again taken into consideration when you want to simplify the monthly payments. From the time you make use of one loan for paying your debts, it becomes much easier to meet the payment needs. No longer you need to worry regarding keeping track of debt amount and due debts.

  • When you have to improve the repayment terms:

Finally, you got something that is focusing on enhancing the repayment terms. This is said to be the best way to do it. You can find loans that have great terms like longer or shorter repayment plan. Moreover, you can again look into the charges and fees that the original lender has given to you. Once you get a lender who offers better terms and can be a great help when it comes to paying off the debts, you can definitely take a step ahead.

Things you require for making debt consolidation work:

  • High credit score
  • Self-discipline
  • Stable income source

Well, these are some of the scenarios where debt consolidation tends to be the right choice for you. All you need is to get hold of a partner who can give complete knowledge and then jump for it. Now you can talk to the experts of Bottom Line Bankers and get fast approval loans to start your new business.

So don’t wait and opt for it.

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The Pros and Cons of Commercial Loans

While starting a business, an entrepreneur needs to consider two points, whether the business idea is viable and whether the project is feasible or not in terms of everything. Provided all other factors to remain favourable for starting the business, funding for the same might be a cause for worry. Starting with your own funds for the business might be quite challenging and not feasible in most of the cases. At this juncture, you have to consider with external funding. With external funding, most of us think about commercial loans from banks and private lending institutions. Other options for managing funds are there, but mostly, the above options are considered to be the most common in practice. Other funding options like Fast Approval Loans and Merchant Cash Advance are there, but take care before going for anyone. However, there are several advantages and disadvantages of these loans and being an entrepreneur; you have to go through them before starting up.

Pros associated with commercial loans:

  • This type of loan has a low rate of interest compared than other ways of business funding.
  • Commercial lenders are entitled to debt repayment only and not to profits of your business.
  • Interest payments on business loans can be deductible on the taxes paid and are very much advantageous.
  • Commercial loans offer several key incentives to entrepreneurs.
  • Loans of this type are usually of long-term and can range from 3 to 10 years so that entrepreneurs can repay the debt slowly without hampering the business process.
  • It covers bulk start-up cost as large sums can be taken as one single loan.
  • You can have the entire ownership of your company whereas, in most of the other types of loans, a fraction of ownership or the total profit is owned by the lender.
  • Commercial lenders have no interest in how you manage the funds you get a loan; rather they will only review your business plan detailing the potential use of such funds.

Cons associated with commercial loans:

  • Detailed information about the business structure, clear project description with every single area to be covered, information about potential investors, profit and cost predictions. A good credit rating is also a vital factor, lacking that might end in rejection of loan.
  • Business loans from financial institutions are dependent upon government policies and whims of the market. Rates fluctuate and are usually high in the first place and increase on borrowing more.
  • A larger amount of loans often require detailed accounts of the way money or loan will be spent.
  • Usually, you need collateral like any fixed asset like home, land, car, etc. as a security deposit to qualify the bank loans. Also, if you are unable to repay the debt from your business, the bank retains the right to seize the asset that has been used as collateral.
  • Usually, a commercial bank loan appears to be on the side of liability of the business balance sheet and so it affects the valuation of a business.
  • It does not guarantee profit and growth of your business.

Apart from all the points mentioned above as pros and cons, you might find some more, when you actually enter the business after taking the business loan. Whatever, the list might be, you will always find it advantageous to get a commercial loan from a financial institution over other types of funding.

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Ways To Ease A Successful Business Loan Application

Financial stability is the prime requisite of small business owners and the only way is by opting for business loans. Undoubtedly taking the decision of starting your venture in today’s competitive era is a matter of concern, but more than that applying for a small business loan seems hectic. Since the application procedure takes time, today we will focus on how to get prepared for the application process which will help to obtain the capital for your business.

When you are ready with everything, the lenders understand that you are a trusted borrower and will definitely pay the loan back on time. So if this is the first time you are applying for a loan but don’t know to make smoothly and quickly, here is a chance for you to understand its requirements.

So what do you need to do?

Keep All Your Documents In Sync:

There is often a need to maintain transparency of financial state when it is about your business. Keeping tax and accounting and financial records accurate and up-to-date is a need to make the entire process smooth. Also ensure that your businesses have everything organized.

When the accountant has everything in hand and nothing to question about, they remain assured they you are a trustworthy person. So make sure all the documents are kept properly in synchronization.

Which type of loans does your business need?

The primary thing that you need is to comprehend the loan type that will suit the best for your business. You can apply for scrutinized loan such as Small Business Administration loan when you require line of credit can slow the procedure and out an end to the denial.

There are various types of loans available for small businesses and therefore choosing becomes a vital choice. You can have a word with the experts of Bottom Line Bankers before you opt for Working Capital Loans.

Make Sure You Have Good Credit:

Definitely keeping a track of the business documents is a need but more than that, you can make sure that you pay the bills on time. Meeting the credit criteria is a need to get the best options. Make sure you avoid charge-offs, late payments, foreclosures and bankruptcies. Since banks primarily check the credit score to understand whether you are reliable or not, maintaining good credit is the primary step of the procedure.

Demonstrate Adequate Cash Flow:

When you have existing business, the first thing banks will check is that you have proper described cash flow in order to make month payments of the loan. The entire analyze is done by checking the past tax returns along with the existing debt. This is the reason why you need make sure that you pay your tax returns on time.

When it is about applying for small business loans, it is always a need to keep in mind about the a few things. If you are new to this market and are not aware of the easiest way to get the Small Business Online Application procedure done, you can follow the above mentioned information.

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Merchant Cash Advance: Seven Advantages Over Business Loans

In any form of business, funding is one of the most important criteria. Funding can be of different types, but business turnover is a vital factor for selecting such funding options. Personal financial support is not always possible for everyone and it is also not a recommended option for any business. Among the external funding options, business loans from financial institutions or banks and Merchant Cash Advance are the two options. In many cases, getting a loan from any bank is almost impossible for the small business owners. In such cases, Merchant Cash Advance is one of the best forms of funding option.

What is a Merchant Cash Advance?

MCA was originally prepared as a lump-sum payment in lieu of a percentage of future credit or debit card sales that has been agreed. However, the term at present describes a variety of small business financing options with short payment terms. To grow a business, cash flow is very important and for that different aid is being taken, among which Merchant Cash Advance is the most popular. This type of funding is used by the entrepreneur when he lacks credit rating or collateral. After signing the contract, the establishment receives some amount of finance and in turn, the provider possesses the right to have a part of the credit card sales of the company every month till the amount of contract is reached.

Top seven advantages of MCA over business loans

  • No credit or collateral is required – As, the type of funding is not dependent on any credit score, rather on the future credit card sales, so, this is a safe option to get cash. Whatever, the type of credit score a business have, it does not affect this funding process.
  • Fast cash access – Like commercial loans, there is not so much of paperwork. While a loan can take around months to get processed, this type of funds requires minimal time to get processed. As a result, one can avail and access fast cash in times of immediate fund requirements.
  • Approval rate is high – Unlike commercial loans, there is minimal or negligible amount of rejection in MCA. The type of funding has usually highest form of approval rate as advances are rarely denied.
  • Collection is as per revenue generation – For any business loans, company with low sales rate, faces problems for monthly payments. In case of MCAs, repayment happens when the company really makes money.
  • The funds available can be used without any restriction– The funds in this case can be used for buying inventories, growing your business or any other purposes, instead of any fixed areas as in commercial loans.
  • Simple and hassle-free process – applying for a commercial loan and getting approval for the same is not an easy task. This might take months and sometimes rejected also. However, MCA is also a funding option for small businesses that is simple as well as hassle-free. This is revenue based and so you do not have to think about the payback.
  • Affordable – Many entrepreneurs have fears that MCA is highly expensive, but in reality this is beneficial and affordable. The affordability allows business people to remain viable without cutting their budgets as like loan payments.
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What Do You Need To Know Before Getting an SBA Loan

Have you decided to apply for the SBA loan to secure your small business funding? Indeed, it is a common choice, as it’s cheap. Before you walk down the path, today we will discuss and collect some useful information about it.

Firstly, thinking like Bankers Do:

This will help to save your time and anxiety.

All you need to realize that these are bank loans. Even when we address these loans as, “SBA loans”, these are not. SBA or Small Business Administration does not make loans, while it helps in issuing partial guarantees of the entitled loans initiated by banks. This is the only difference.

Regulators will never want banks to take any reckless loans. In case of an SBA, it helps the borrowers fulfill credit requirement of the bank when the credit is poor.

Check This To Understand What It Actually Means:

  • Even when you are eligible for the SBA guaranty, the primary thing you need to sell is the creditworthiness. The respective bank needs to trust that your proposal makes sense to them.
  • This is not a layup; it is also rigid and bureaucratic. You need to know the rules of this game to be a part of it.

What Will They Need From You?

Just like any other business, bankers need profit. Well, it’s apparent that we all are here to make money – not by keeping a high margin but a decent margin. They need to earn revenue in order to fulfill the costs. This is why they can opt for different ways like fees or interest income.

Banks are more like the grocery stores which have high volumes and narrow margins. Their net interest varies from 3% to 5% — which is as thin as paper.

Improve Your Chances of Success:

SBA loans are so far the cheapest money and offer smart terms that you can find besides your friends and family. Since it is a lengthy procedure, you can cut and abridge the process while improving the odds of success.

  • Undoubtedly you have maintained a great deposit relationship with the local bank for several years or decades. They will always treat you good from their tiny teller window — because they love you. And, why not? You are going to lend to them. Even after maintaining such a relation, don’t be sure that they will lend to you. All you need is to know what they are looking for along with making a candid evaluation regarding your ability to deliver.
  • Make a detailed study to anticipate the financial needs in advance. Taking more time for yourself will help you to understand the better and wider options available to you.
  • You will find in details about the SBA loan programs online. Make sure you know your chances before consulting with a banker. Preparing with knowledge and logic enhances the perceiving capacity.

Well, undoubtedly SBA and the bank loans are one of the most common and hardest loans for the small business owners.

We, at Bottom line Bankers, can successfully meet your funding needs. Check with our banking experts about your SBA loan and other fast approval loans that will keep the consistency in your funding system.

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