There’s a variety of reasons why a business may need short-term financing. From bridging seasonal cash flow gaps to purchasing new equipment — quick capital is essential in keeping things afloat. Learn about the best short-term business loans in this article.

The need for short-term financing

The rise in short-term financing means that more and more businesses are getting the funding they need to take their company to the next level. The reality is, the cost of running a successful business is substantial – payroll, marketing expenses, training, technology, equipment, the list goes on. However, it’s not always feasible to bootstrap your way through major expenses.

Short-term, asset-based financing can be highly beneficial in fronting start-up costs or ensuring a company remains operationally excellent even when life throws an unexpected curveball. The reality is, many small businesses will experience the need to obtain funds fast, whether it’s due to a lull in revenue, emergency repairs, or any other unexpected costs, short-term business loans can provide the working capital you need to get through any temporary financial bind.

What is a short-term loan?

As the name implies, short-term business loans are designed to provide small businesses with the financing solution they need with a quick repayment turn-around. The actual term of the loan ranges from 3-18 months in length with repayment installments paid on a daily or weekly basis.

Short-term business loans are also typically a lot easier to acquire than other small business financing options, which often require a higher credit score and a more substantive business history. Many short-term business loans require little documentation to apply, are typically easy to qualify for, and boast rather fast processing times. This means that you don’t have to wait long to get the working capital your business needs when it matters most.

The wide variety of financing

When most people think of a small business loan, they think of a traditional five- or ten-year team loan. However, many options exist for working capital outside of traditional long-term loans you may consider based on your small business’ needs, such as:

• Term loan: A term loan allows you the ability to secure working capital upfront and then pay it off weekly, monthly, or annually depending upon the lifespan of the loan and the funder. Typically, a term loan has lower rates than other financing options, but this may vary depending upon whether you choose a short-term or long-term loan.

• Line of credit: A line of credit is a flexible lending option that provides your company with access to capital on a need-to basis. Once your company has been approved for a set amount, you have the ability to draw from it whenever it’s necessary. This option provides you with the utmost flexibility when it comes to financing. Whether it’s helping with payroll, or upscaling your company’s office spaces, obtaining a line of credit may be the best option for you.

• Business credit card: Similar to a personal credit card, a business credit card provides small businesses with the ability to make purchases and payments using a line of credit that’s easily accessed from a credit card.

When should a business consider a short-term loan?

Before taking out a business loan, you should consider the loan’s purpose. Knowing what you’ll be using the loan for will help you dictate the loan amount and what terms make the most sense for your business (long-term or short-term). If you’re looking to invest in long-term growth that may require a substantial amount of capital, long-term loans are suitable for companies looking to reach the next phase of growth. Short-term business loans will increase your company’s existing capital for more immediate needs.

Although there are many reasons why a small business might consider a short-term business loan, here a few examples of a what short-term financing can be used for:

1. Project start-up costs: There may be times when kickstarting new project requires upfront costs that exceed the initial project budget. Ensuring the project is successful means making sure the project is done right. Acquiring a short-term business loan will give you the ability to cover the necessary expenses without having to repay the loan over the course of several years.
2. Seasonal cash flow gap: Many seasonal businesses sometimes borrow to get through the slower business months. Keeping the doors open requires sufficient cash-flow a short-term business loan can provide.
3. Payroll: Retaining talent is a key competitive differentiator. A company’s ability to hold its talent profoundly impacts the company’s ability to be operationally excellent without having the hassle of recruiting, hiring, and training new talent. A short-term business loan could be a good solution for ensuring payroll is covered even when you experience a lull in business.
4. Cover the costs of emergency repairs of critical equipment: It’s not uncommon that machinery fails or needs to be serviced. When equipment is necessary to the daily operation of your business, you can’t afford to wait. A short-term small business loan can help get operations moving again without having a long-term repayment obligation.

Is a short-term loan more convenient than a long-term business loan?

Ultimately, deciding between a short-term or long-term business loan comes down to the loan purpose. However, if you need funds fast, you may consider the overall accessibility and convenience as one of your deciding factors.

Short-term financing provides the ease of a simple application and a relatively quick turnaround time. After being approved, you may even have the money in your account in as little as 24 hours. Typically, the higher approval ratings and access to working capital when you need it most makes for a convenient solution to any financially tight situation.

Once your company starts to gain scale and become more established, you may consider a long-term business loan. Long-term financing enables businesses to align its investments with long-term strategic goals, which provides more time to realize a return on investment. Although long-term business loans offer larger loan amounts and typically offer lower rates, it’s important to keep in mind that long-term financing applications and approvals often take time and require a higher qualification standard than short-term business loans. Therefore, in terms of accessibility and convenience, short-term business financing is the most advantageous loan option, especially when the loan is being used to support daily operational needs.

How to apply for short-term business loans

Once you’ve identified the best loan for your business, it’s time to apply. The good news is, applying for a short-term business loan is simple and can be achieved online from anywhere on your device. While filling out the application, you may be prompted to provide some general information about your business and its financial history so make sure you have the required documentation on hand. Doing so will make the process as seamless as possible. Before submitting the business loan application, make sure to review and double check that everything the funder asked for is in the appropriate order and format. This will help alleviate any unnecessary back and forth that may prolong the approval process. Once submitted, your application will be reviewed by the funder. In the event that your fudner requires additional information, a business advisor will reach out to you for further explanation. If you’ve been approved, the working capital will be deposited into the business bank accept, allowing you to pursue your next business goal.

Gather the required documentation

When applying for a short-term business loan, you should expect to be asked to provide the following; however, the required documents may vary by funder:

• Business plan: Most loan applications require a sound business plan to be submitted with the loan application. Funders need to see what you plan to put your equity towards and what you plan to gain from your investment.

• Financial statements: Many loan programs require up to one year of business bank statements to be submitted as part of the loan package which includes a detailed report of revenue and expenditures.

• A business banking account: Having a separate business bank account can make your accounting easier to manage. This also provides you with the opportunity to present clean financial records that are indicative to your business financial records.

• 3 months of bank statements: Your funder will closely review bank statements to gain a better understanding of your business history.

• Business license: Funders need to ensure you are licensed in your state to operate your business lawfully.

• Legal documents: Legal documents required by your funder may be in the form of:
  • Articles of incorporation
  • Copies of contracts you might have with third parties
  • Franchise agreements
  • Commercial leases

• Tax returns: Your company’s income tax returns can illustrate business performance which is an integral part of the loan application process.

• Collateral, if required: Collateral requirements vary greatly. However, it is a good idea to prepare a collateral document that describes the cost/value of business property that may be used to secure the loan.

Submit your application

Once you’ve gathered the proper documentation, it’s time to submit your application. The Loan Solutions OU underwriting team will then review the business financing application and, if approved, the loan proceeds will be deposited into the business bank account on file.

Conclusion

A short-term business loan offers the utmost flexibility when it comes to small business financing. If you’d like to learn more about term financing options or would like to speak to a business advisor, call one of our representatives at Loan Solutions OU today: (877)-252-0827.

The post The Best Short Term Business Loans appeared first on Loan Solutions OU.

For many small business owners, they’ve turned their passions for providing services or products into livelihoods. But unlike bigger corporations and companies, when small businesses need to cover payroll after a down month or two, or want to expand their current business offerings, getting ahold of working capital can be tough to come by. That’s why small business lending is a popular option that most small businesses need when scaling what they’re currently doing — and getting access to that working capital is easier to come by than most people think, especially when you leverage both traditional and alternative lenders.

Small business lending — choosing the right kind of lender

While most small business owners are aware of loans and business credit cards, did you know that there are more lenders available than just banks or credit unions? That’s why we’ve put together a comprehensive overview of both traditional and alternative lenders to understand what kinds of small business lending options there are for you and your small business:

• Traditional lenders: most traditional lenders, like banks and credit unions, offer a few different funding options (i.e. term loans, business credit cards, lines of credit) with reasonable interest rates and with high reputations from years of doing business with other bigger companies in the area. However, traditional lenders have strict eligibility criteria, lengthy application processes, and may offer lesser loan amounts based on what kind of collateral you can put up front. And most banks aren’t looking for repeat expenditures, like loans to help cover payroll or hiring expenses.

• Alternative lenders: alternative lenders are here to provide small businesses with an opportunity to secure working capital in more ways than thought possible. Typically, their application processes are quicker, easier, and offer more flexible payment and term options with a variety of financing products available. But some of the small business lending products can be more expensive, come with shorter terms, and may require daily or weekly payments.

Knowing what small business lending you should find is half the battle

For most small business owners, understanding what route they want to take when considering a small business loan, line of credit, business credit card or more can be half the battle. And understanding that there are more options available to you if you have bad credit, or don’t meet the collateral needs of traditional lenders, can help you and your small business if you’re looking for small business lending.

When looking into financing products, you should always determine what kind of lending you’re looking for. Whether it’s something that you can pay off in a month, or working capital that you want to finance on a need-be basis, creating a holistic view of your business goals can help when determining what kind of small business lending you want to go with. And also developing how much you and your small business can afford to pay back will put you two steps ahead when it comes to financing your small business needs.

Types of small business lending products

While most small business owners are aware of term loans or credit cards, there are various financing products available based on your small business’ needs, such as:

• SBA loan: The Small Business Administration is a government-funded entity that provides government-backed loans through partners who can distribute funds when capital is needed. These loans have stringent policies on who qualifies, and typically are used in times of economic distress across the entire market.
• Bank loan: a bank loan is a traditional form of lending deposits a one-time sum of cash into your business bank account and offers varying repayment and interest fees based on your business qualifications. Although this is a preferred method for most small business owners, banks typically require high revenue and excellent credit in order to qualify.
• Term Loan: A term loan allows you the ability to secure working capital and then pay it off in set payment amounts and dates for added flexibility. Typically, a term loan has lower rates than other financing options, but it may require more upfront verification like collateral and a positive profit trend to be able to qualify.
• Line of credit: A line of credit is a flexible funding option that allows small business owners to access capital on a need-be basis. Your small business is approved for a set amount of credit and then allows you to draw on the approved amount when needed. This option allows you to take out capital when it’s necessary, without having the need to take it all out at once.
• Asset-based loan: An asset-based loan allows small business to access working capital through a loan secured by assets that the business has. This allows the lender to collateralize with asset(s) from a business borrower, leading to potentially lower rates. Here, the more liquid the business asset is, typically the less risky the loan may be considered for better term options.

Applying for small business lending

Looking to apply for small business lending? We’ve broken down the process for both alternative and traditional lenders to help you understand the key differences in the application process:

For an alternative lender, you’ll need to follow the below:

• Determine how much financing you need and how much you can afford.
• Review your business qualifications like your credit score, time in business and revenue
• Accumulate all the documents and requirements that are needed to apply (bank statements, photo ID, voided bank check, business license, tax returns, and any legal documentation), and then proceed to submit your application online. However, you may need to speak with a business advisor in order to figure out the best route for you and your business to take.
• Once you’ve received approval, you’ll need to discuss with a business advisor what options would work best for your business. If you know your repayment options and how much you can afford, you’ll be able to best determine which route of financing to take.
• And lastly, you’ll need to discuss a timeline for receiving your funds. This can be quicker for most alternative lenders through lending options like short term loans, or can take a longer period when dealing with bank loans or SBA loans.

For direct lenders, you’ll follow a more traditional route which includes:

• Accumulating your bank statements with positive revenue history.
• Stringent credit checks that look for satisfactory or better credit.
• A collateral evaluation to determine how much your current assets are worth
• Applying directly through them — meeting with underwriters and tellers in order to submit your application.
• And finally, determining what kind of funding you’ll receive like a business credit card, line of credit, or term loan.

Small business lending for today’s small business owner

Whether you’re looking to scale your business or simply trying to cover payroll, small business lending gives you the flexibility to come up with working capital through a variety of options that are available to you and other small business owners. But knowing which route to take when looking for small business lenders can help guide you to the right service or product that fits you and your small business’ needs.

If you have any questions or would like to speak with a business advisor, call one of your small business experts at Loan Solutions OU today: (877)-252-0827.

The post Small Business Lending: What You Need To Know appeared first on Loan Solutions OU.

Much like personal credit, business credit allows you to access financed capital when and where you need it. And because we know that being a small business owner is no small feat, we’ve put together a comprehensive overview of what business credit is, how it works, why it’s important, and ways to keep your business in good standing in order to obtain even more financing in the future.

But we’ll start with the basics — what in the world is business credit?

Your business, like any other business, will be ever-evolving to meet the needs of today’s clients. Whether that means taking a dive into the digital-first world with an ecommerce site of your own, or trying to update your current offerings and visibility in a more modern way, you’ll always have a need for working capital.

And sometimes, it can be hard to come by. Most small business owners don’t have the spare cash to upfront the costs of growth and development, but that’s where financing can help.

How does business credit work?

Even though personal credit and business credit have some overlap in similarities, business credit relies on a combination of things to be considered for access to funding. Whether you’ve been in business for three months or thirty years can make a difference. As does your revenue stream, year-end profits, and any credit history that is associated with your business — all of which are key factors in determining your credit eligibility.

When considering what kind of financing your business is seeking, you should always be aware of your business’ credit eligibility as it can make a world of a difference when it comes to rates, terms, and financing types. But even more important is to assess what exactly your business is using the extra capital for, and how much you and your business can afford during your financing period.

Why is building credit important?

Every small business owner has goals. Whether they’re to expand into a new location, make updates at their current one, outfit their office with new technology, or simply maintain their payroll, there are plenty of financing opportunities to make those goals truly attainable through learning how to get business credit.

In order to be considered for small business financing, you’ll need to have a credit worthy score, a positive history of payments and profits, and be able to prove that your small business will be able to pay back the financed sum. Because just like personal credit, your business is constantly being evaluated for credit worthiness through your everyday actions. So, staying on top of those credit card bills or loan repayments is key in keeping positive business credit.

Another reason that many small business owners look into business credit is because they don’t want to dip into their personal credit in order to make those key business moves happen. Financing a new laptop for yourself might be easy (if you’ve got proficient credit) but needing to finance twenty might prove problematic if personal credit is the only player in the game. By building a positive rapport with your current creditors through your business, and being able to back up what you’re currently bringing in on the business side of things, you’ll be able to dip into your business credit without needing to personally take out new funding in just your name.

Lastly, business credit allows you to build relationships with vendors and suppliers and can help keep a steady flow of new credit opportunities open whenever you’re looking to finance something next. With a positive repayment history, you’ll be on your way to building business credit with creditors and suppliers alike, allowing you the freedom to access new working capital whenever, and wherever, you’d like.

 5 ways to build business credit

Looking to learn about getting business credit? Here are a few ways that can help bolster your credit worthiness in order to be financed:

1. Regularly monitor your profile:

   Using free-to-access online tools for business credit monitoring —you’ll be able to understand where your credit worthiness is. You’ll also see the benefits of separating your business and personal credit usage, which can help determine your eligibility for access to new funding opportunities.

2. Get a business credit card or line of credit:

   A business credit card, much like a personal credit card, allows you to access your financed capital wherever you and your business go. A business line of credit is much like a business credit card, but allows you to transfer the funds into your current business checking or savings accounts on a need-be basis.

3. Take care of outstanding debt:

   Consolidating or paying off old debts entirely will bolster your credit worthiness by eliminating payments and lowering your credit usage rates. These are both factors in determining your business credit score, and can help you gain access to even more capital if you’re not already indebted.

4. Make payments on time:

   Being able to prove that you’re credit worthy starts with the ability to pay back your debts. And one way to show this is by simply making your payments on time. Your future creditors will be able to assess the positive payback history, and can accommodate accordingly.

5. Keep your business information updated with the bureaus:

   Being on top of your business credit is imperative — that’s why you should fully articulate any new information to the credit reporting agencies that monitor and track your business credit. By doing so, they’ll have the most updated versions of your credit profile, and creditors will be able to assess your eligibility without the hassle.

Business credit and your business

Small business owners, like you, are constantly moving their businesses forward — into new streams of revenue, and modernizing their approaches along the way. And sometimes, learning about business credit can make those dreams a reality. But in order to get there, taking all of the steps above into consideration will be a surefire way to access funding quickly, conveniently, and on better terms.

If you have any questions related to small business financing or would like to speak to a business advisor, speak to one of our expert representatives at Loan Solutions OU today: (877)-252-0827.

The post How to Get Business Credit? appeared first on Loan Solutions OU.

Lines of credit for your small business that can make your capital work just as hard as you do. And with access to a small business line of credit, you can help grow, expand and upgrade any facet of your small business whenever you need.

Follow along as we go through the ins and outs of small business financing through business lines of credit, and learn new ways for you to help capitalize on working capital.

What is a small business line of credit?

A line of credit is a flexible funding option that allows small businesses— like you — to access capital on a need-be basis. Your small business will go through an approval process to discover how much working capital is available to finance, and then allows you to draw out funds as needed. This option allows you the flexibility to access capital when it’s necessary, leaving you without the need to pay back a lump sum all at once.

How does a small business line of credit work?

Like most small business owners, there are a lot of backend processes that need to take place in order to fully expand and grow. One of which is saving enough profit to grow to your true potential. But for most small business owners, an excess of working capital can be hard to come by — especially if you’re only a few years in to your business endeavor.

But that’s why small business financing exists. With a line of credit, you’re able to help finance the upfront costs of new customer acquisition, growth, expansion, technology upgrades or payroll amounts, on a need-be basis. This allows you to budget out your expenses so that you’re only financing when necessary.

How it can help grow your business

Although a business line of credit offers small business financing, you’re offered more flexibility with credit amounts on a line of credit than on other traditional forms of lending.

For instance, a small business line of credit allows you to dip into your financing approval amount to cover expenses when needed. Whereas a term loan is a traditional form of lending deposits with a one-time sum of cash into your business bank account and offers varying repayment and fees based on your business qualifications. Although term loans seem like a surefire way to access funding, it’s important to understand that they often require more stringent requirements and could potentially lead to higher rates.

Looking into other financing options, like a business credit card, can offer the same style of flexibility that a line of credit offers, but often will require that applicants have higher requirements for small business owners to be approved. Business credit cards can lead to potentially high rates if those requirements are insufficient, with the small business owner left to foot a lofty bill at the end of the day.

And while both term loans and business credit cards are common practice amongst business owners — big and small — being able to understand these differences is of utmost importance when you’re considering funding for working capital in your small business.

That’s why a line of credit might be the way to go when it comes down to which financing option is your best option. It offers term options from 3–18 months, flexible payments, and a fixed fee charge based on your withdrawal from your line of credit account. Business lines of credit are ideal for repeat cash flow needs, and is a great option for obtaining working capital to pay for unexpected expenses or exciting new business opportunities.

The only things to be watchful over when dealing with a small business line of credit is that they can lead to lower financing availability based on your qualifications. But if you have any questions regarding a small business line of credit, you can always reach out to a specialized business advisor to discuss which financing options are best for you.

Ways to use your small business line of credit funds

When considering opening a small business line of credit, you should first identify what you’re going to be using the financing toward. It’s a quintessential step in understanding how much you can afford to pay back, and what is most important to put on a financed amount of capital.

And to help with identifying your business’ financing needs, here are the most common ways that business lines of credit are used for:

• Ongoing operating expenses

• Covering cash flow gaps

• Pursuing a growth or expansion opportunity

• Upgrading your business’ equipment

• Covering seasonal downturns

• Making advances in your business’ technology

• Financing an unexpected expense

All of these are common practice amongst small business owners, but can provide clarity as to what you and your business might be looking to finance.

Who qualifies for a business line of credit

Being a small business owner can be stressful, especially when it comes to discovering what kinds of financing options are available to you. But if you’re looking to be considered for a line of credit, you’ll need to:

1. Provide a valid form of identification
2. Have a business bank account
3. Provide your last three months of business bank statements

While most people are unsure of whether or not they qualify for a line of credit, you should understand that marketplace funders are prepared to help find a solution for you and your small business. Knowing your business’ prior history, understanding your credit history, and being able to prove that you’re able to pay back financing over time are just a few ways that can help you be approved for funding in a short amount of time.

How to apply for a small business line of credit

Now, more than ever, marketplace funders — like Loan Solutions OU — are offering quick and convenient ways to access business lines of credit through a short application process. To get started in the process, you’ll need to:

• Apply online: You can apply online from anywhere, and on most devices. Just click the GET QUOTE button on the top of our page and let us know more information about your company and its goals, and remember to collect any necessary documentation.
• Let us review: Our team will review all the information provided to us. If we need any additional information, our team of business advisors will reach out to let you know.
• Get funded: If approved for a business line of credit, our team will proceed to send out the approved initial draw to your business bank account.
• Obtain additional funds: Because of the flexibility of a business line of credit, you’ll be able to come back and draw out of your line of credit up to the approved amount at any time. Just be sure to note the fees and terms associated with your financing amount.

Summary

A small business line of credit offers the utmost flexibility when it comes to financing options. And we’re making it easier than ever to have access to working capital through more ways than ever — making your entrepreneurial endeavors that much more exciting and achievable. So, if you’re looking for flexibility within your financing options, the ability to draw out capital when needed, and set interest and fees, a business line of credit might be the best option for you.

If you have any questions regarding a small business line of credit, feel free to reach out to one of our highly skilled business advisors at Loan Solutions OU, today: (877)-252-0827.

The post How To Use a Small Business Line of Credit appeared first on Loan Solutions OU.

If you’re asking yourself, “where can I get a small business loan?” look no further. Discover which financing option suits you and your business best. And learn more about small business loans in this easy to understand article, now.

Trying to find where you can get a small business loan?

Being a small business owner is no small feat. From front of the house operations, to employee management, revenue generation, growth and development, and back of the house bookkeeping, there’s more responsibility that small business owners bear than their corporate counterparts.

But, did you know that there are more resources available to you that can help alleviate financial strain when trying to expand, cover payroll, or simply bolster your small business’ offerings?

Here, you’ll discover where to get a small business loan, what different financing options are available, and where to start in the application process.

Determine what you need

Small business owners are constantly working toward bettering their services and offerings — and most of the time, those things come with associated costs. Whether they’re looking to hire more staff, cover payroll, grow and expand their location, or upgrade their technology, these all require out-of-pocket expenses that can make things tight on a small business owner’s budget.

But there are resources and lenders that can help them find the financing they need — sometimes, acquiring capital in as soon as one business day.

So, where should you start if you’re looking to get a small business loan?

Determine what you need.

It’s as simple as that. Evaluating what your small business needs in order to properly define what financing route you should go. There are options that allow you to access funds in a short amount of time based on your credit history, or options that take a look at your outstanding invoices and use that to secure capital. But knowing what you’ll use the funding for is of utmost importance when getting started.

Evaluate what kind of small business financing you need

When you’re working with a funder, like Loan Solutions OU, be prepared to answer a few questions regarding your small business. It’s best to have answers to some common nuances that might delay your funding in order to make your application process even more quick and convenient.

Lenders will ask:

• To see your past three months of bank statements
• To run a credit check
• For a photo ID
• For a voided business check
• Why do you need a small business loan?
• And how much do you need? (Consider how much up-front capital will be needed for things like payroll, expansion, stock, etc.)

Where to get a small business loan from?

While most small business owners will want to receive financing through traditional funding options, when you have lesser collateral or unsatisfactory credit, you might want to eye something from an marketplace funder.

Most marketplace funders provide you with the ability to receive funding in various forms, , based on your business needs. Marketplace funders typically require less collateral, and can be offered to those who have bad credit.

On the other hand, traditional lenders like banks and other financial institutions, offer loans and lines of credit to those with satisfactory credit and high collateral amounts to ensure they are able to be paid back at lower rates and more structured repayment options. They also take a strict look at profitability, revenue and collateral access because they need to ensure they can process a return on any financed product.

Determine what type of small business loan or financing you need

What kind of small business loan you need is determined by discovering where you want to get your financed capital from. Here are a few options that might suit your small business’ needs:

• SBA loan:

  The Small Business Administration is a government-funded entity that provides government-backed loans through partners who can distribute funds when capital is needed. These loans have stringent policies on who qualifies, and typically are used in times of economic distress across the entire market.

• Bank loan:

  A bank loan is a traditional form of lending deposits a one-time sum of cash into your business bank account and offers varying repayment and interest fees based on your business qualifications. Although this is a preferred method for most small business owners, banks typically require high revenue and excellent credit in order to qualify.

• Microloan:

  A microloan is another asset that the Small Business Association has put in place for small businesses to access financing through. With loans up to $50,000, certain small businesses and not-for-profit childcare centers can use the funds as a way to start up and expand.

• Business credit card:

  Much like a personal credit card, a business credit card allows for small business owners to make purchases and payments using a line of credit that’s easily accessed through a credit card. A business credit card, however, will have higher requirements for small business owners to be approved, and can have high interest rates if those requirements are insufficient or aren’t in their satisfactory range.

• Line of credit:

  A line of credit is a flexible funding option that allows small business owners to access capital on a need-be basis. Your small business is approved for a set amount of credit and then allows you to draw on the approved amount when needed. This option allows you to take out capital when it’s necessary, without having the need to take it all out at once.

Where can I get a loan for my business?

Securing funding for your small business starts with knowing who to go to. While most businesses will target traditional funding options, if you don’t have access to high collateral amounts or have unsatisfactory credit, you may want to consider choosing from a marketplace funer.

Most marketplace funder provide you with the ability to receive funding in various forms, like a term loan or line of credit, based on your business needs. They typically require less collateral, and can be offered to those who have bad credit.

While traditional lenders, like banks and other financial institutions, only offer loans and lines of credit to those with satisfactory credit and high collateral amounts to ensure they are able to be paid back. They also take a strict look at profitability and are very strict in who they choose to lend to.

Choosing a lender for your small business loan

If you’re looking for an easy way to determine what financing route you should take, consider the following:

• If you have a lower than satisfactory credit score — choose a marketplace funder
• If you don’t have high collateral amounts to secure funding — choose a marketplace funder
• If you have excellent credit and want longer times to pay back your loan — choose a traditional bank lender
• If you have high collateral amounts available — choose a traditional bank lender

If you’re looking where to get a small business loan, these simple prompts can help determine what route you and your small business should follow in order to secure access to working capital.

Apply for a small business loan

If you’re ready to move forward with a small business loan application, you should be aware that the application process for a marketplace funder differs from what traditional lenders like banks and financial institutions require.

For a marketplace funder, you’ll need to follow the below:

• Determine how much financing your business needs and what it can afford
• Review your business qualifications like your credit score, time in business and revenue
• Accumulate all the documents and requirements that are needed to apply (bank statements, photo ID, voided bank check, business license, tax returns, and any legal documentation), and then proceed to submit your application online. However, you may need to speak with a business advisor in order to figure out the best route for you and your business to take.
• You can discuss with a business advisor what options would work best for your business. If you know your repayment options and how much you can afford, you’ll be able to best determine which route of financing to take.
• And lastly, you’ll need to discuss a timeline for receiving your funds. This can be quicker for most alternative funder through funding options like short-term loans, or can take a longer period when dealing with bank loans or SBA loans.

For traditional bank lenders, you’ll follow a more traditional route which includes:

• Accumulating your bank statements with positive revenue history
• Stringent credit checks that look for satisfactory or better credit
• A collateral evaluation to determine how much your current assets are worth
• Applying directly through them — meeting with underwriters and tellers in order to submit your application
• And finally, determining what kind of funding you’ll receive like a business credit card, line of credit, or term loan

Where should you get a small business loan overview

When you’re trying to determine where to get a small business loan, you should consider all factors that suit your small business’ needs. Knowing the differences between a marketplace funder and a traditional lender can be half the battle, but understanding what financing options and where you’ll find them can help you make an educated decision on what business financing you and your small business can take.

If you have any questions or would like to speak with a business advisor, call one of your small business experts at Loan Solutions OU today: (877)-252-0827.

The post Where to get a small business loan? appeared first on Loan Solutions OU.

Obtaining financing for your small business can feel overwhelming when there are so many options to choose from. To help set you and your business up for success, we’ve put together a guide on how to get a small business loan in just a few steps.

An introduction in how to get a small business loan

Small businesses are the backbone of America. From mom-and-pop storefronts, to restaurants, barbershops, retail and convenience stores, and startups, there’s always a small business nearby. And as a small business owner, there are a lot of things that must come together to make sure your business is a success — most importantly, capital.

Sometimes working capital is needed to expand, to consolidate debt, to cover payroll, or to simply continue operations if business temporarily slows.

But for most small business owners, they can have a hard time procuring capital from external sources because they don’t know where to start, and what kind of financing is available. That’s why we’ve put together a comprehensive overview of how to get a small business loan for small business owners just like you.

First things first – get to know your business

As a small business owner, you’re probably goal-oriented; you yearn to grow, build, expand and allow more and more people to enjoy the products and services you already love. And that’s only part of process. Here are a few hot-button items to get started on how to get a small business loan:

1. You should determine why your business may need a small business loan — If you are looking to expand your retail space, or are looking to cover payroll from last month, it’s best to have those needs in mind before applying.
2. Consider how much your business needs and if your business can afford it — just because your business can receive a high-dollar loan, doesn’t mean it should take a high-dollar loan. Taking a comprehensive look at what your small business can afford to pay back is the best bet in ensuring you’ll have on-time payments without worrying about recourse.
3. Determine how much financing your business needs — doing your research beforehand can help your loan advisor understand what you’ll be financing. If you’re looking to grow your product offering, or want to make some much-needed upgrades to your storefront, it’s best to have a figure in mind when getting a small business loan.

Taking all three of these seemingly simple ideas into consideration can help you determine what exact loan options there are, and how much your business can afford to pay. When talking with a business advisor, it’s best to have your business plan fully vetted in order to properly secure capital without worry.

Review your business qualifications

Once you’ve determined why your business needs a business loan, how much it can afford, and how much financing it needs, the next step in getting a small business loan is to look at your business qualifications.

Check your credit

Funders most likely look at your credit score. Most importantly, your history of payments, debt to income ratio and any outstanding balances you have that could negatively affect your repayment toward a new small business loan. Although higher credit scores will net you better rates and differing payment options, there are funders for every credit type to be considered.

Review your business’ history

Next, small business owners who are interested in getting a small business loan will have to take how long they’ve been in business into consideration. Most funders will be leery of a small business that’s been open for a few months, but an established small business that’s been around for a while will have better odds at securing a small business loan. Don’t let that dissuade you from applying though as small business funders will look at a multitude of factors in order to determine your eligibility for receiving a small business loan.

Evaluate your business’ revenue

A vital component in getting a small business loan is how much revenue it brings in. Repayment is a top priority for funders, and having a consistently positive revenue stream is of utmost importance when trying to get approved. Coupled with your credit score and your business history, your revenue will play a large role into how much the business can receive in funding, and what your repayment terms will be like. Together, all of these factors will determine your repayment terms, which will ultimately decide how much the business will receive and how the business will be able to pay off the financing.

The best small business financing options

So, you’re looking for small business financing but don’t know where to start. Here is a list of the best funding options that small businesses have at their disposal:

• Bank loan: a bank loan is a traditional form of lending deposits a one-time sum of cash into your business bank account and offers varying repayment and interest fees based on your business qualifications. Although this is a preferred method for most small business owners, banks typically require high revenue and excellent credit in order to qualify.
• SBA loan: The Small Business Administration is a government-funded entity that provides government-backed loans through partners who can distribute funds when capital is needed. These loans have stringent policies on who qualifies, and typically are used in times of economic distress across the entire market.
• Line of credit: A line of credit is a flexible funding option that allows small businesses to access capital on a need-be basis. Your small business is approved for a set amount of credit and then allows you to draw on the approved amount when needed. This option allows you to take out capital when it’s necessary, without having the need to take it all out at once.
• Asset-based loan: Asset-based loans allow businesses access to working capital through a loan secured by assets that the business has. This means that for this type of loan, the lender is collateralized with assets of the business borrower. For small business owners, their collateral typically allows them to have lower rates as its secured with assets they already have.
• Business credit card: Much like a personal credit card, a business credit card allows for small businesses to make purchases and payments using a line of credit that’s easily accessed through a credit card. A business credit card, however, will have higher requirements for small business owners to be approved, and can have high rates if those requirements are insufficient or aren’t in their satisfactory range.

Choose between a traditional lender or an alternative funder

While most small business owners will want to receive financing through traditional funding options, when you have lesser collateral or unsatisfactory credit, you might want to eye something from an alternative funder. Most alternative funders provide your business with the ability to receive funding in various forms, like a term loan or line of credit, based on your business needs. Alternative funders typically require less collateral, and can be offered to those who have bad credit.

On the other hand, traditional lenders like banks and other financial institutions, offer loans and lines of credit to those with satisfactory credit and high collateral amounts to ensure they are able to be paid back at lower rates and more structured repayment options. They also take a strict look at profitability and revenue because they are very strict in who they choose to lend to.

Gather the required documentation

If you want to get a small business loan, you should have the following documents available to ensure you’re approved in a timely manner:

• A detailed business plan

• Your profit-loss financial statements

• A business banking account

• Three months of bank statements

• A business license

• Tax returns

• Collateral for investment documentation

• From of identification

Apply for financing

When applying to get a small business loan, you should always remember that each funder is different. If you choose a traditional lender to receive a bank loan, you’ll have to take into consideration their stringent methods of approval. Whereas an alternative funder, like Loan Solutions OU, will holistically take into consideration your situation, and offer varying methods of financing and funding for your small business to use.

1. Gather required documents

One of the most important steps in receiving small business loans is to ensure that the documents listed above are all in order. When applying for a small business loan you’ll need to ensure that all of the requirements are satisfied so that you’re not set back in timing when trying to get a small business loan.

2. Submit application

Once you’ve accumulated all the requirements and are ready to apply, you’ll need to submit your application. This process can be done online for most funders; however, you may need to speak with a business advisor in order to figure out the best route for you and your business to take.

3. Review your options

Once you’ve received pre-qualification, you’ll need to discuss with a business advisor what options would work best for your business. If you know the repayment options and how much the business can afford, you’ll be able to best determine which route of financing to take for your business.

4. Receive your funds

And lastly, you’ll need to discuss a timeline for receiving your funds. This can be quicker for most alternative funders through funding options like a short term loan, or can take a longer period when dealing with bank loans or SBA loans.

Your business, your way

When getting a small business loan, it’s important to consider all factors in making your funding decision. Whether a small business loan is your first choice because of the speed and ease of access to capital, or you want to explore your line of credit options, small business owners like you can make informed decisions on your business’s financing future.

Your working capital can work even harder for you if you take the necessary precautions when deciding which financing route to take, and what your business should do based on your business’s current profitability and revenue situation.

If you have any financing questions or would like to speak to a business advisor, speak to one of our expert representatives at Loan Solutions OU today: (877)-252-0827.

The post How To Get a Small Business Loan? appeared first on Loan Solutions OU.

Being a small business owner is no easy feat. With the constant need to improve your business through technology upgrades, payroll processes, hiring new employees, or consolidating existing debts, getting a small business loan with bad credit can seem tedious and out of reach for those with poor credit history.

But, often times, there are alternative solutions for your modern-day problems.

With an alternative funder like Loan Solutions OU, you’re able to open up a whole new world of possibilities in terms of small business funding. But before you get started, we’ve put together a comprehensive overview of what it takes to receive funding even if your credit isn’t up to par with traditional lenders.

Are small business loans dependent on my credit score?

For small business owners, often times their business is their sole livelihood. Although that seems obvious, bigger corporations often utilize capital from other sources to fund their next upgrades, processes and innovations.

But without access to that external capital, small business owners often times feel constrained by personal credit in order to expand and develop their offerings because of personal credit history. For years they’ve been told that in order to qualify for traditional lending opportunities, they had to meet strict criteria: excellent credit, a high value in available assets and a significant upward trend in revenue in order to qualify for a loan.

That however, is not true.

Because with an alternative funder — like Rapid — your funding options are more bountiful, convenient and quick than most are aware of.

Getting a small business loan with bad credit — things to consider

Before you apply for a small business loan with bad credit, you should consider a few credit-related things before you jump into an application:

• Your personal payment history
• Your debt-to-income ratio
• Multiple hard inquiries in recent months
• Your credit utilization rate

But when applying for a small business loan with bad credit you should also consider the following:

• Shorter loan periods
• Lower funding amounts

Setting yourself up for success

As a small business owner, being cognizant of all the factors that go into financing and business solutions can make all the difference. A general rule of thumb before applying for business financing with bad credit is to follow these steps for success:

• Check your credit score: being in-tune with your prior history and factors that might negatively affect your score can help level-set what funding options might be available to you
• Have a business plan ready: knowing where you want to take your business with the small business funding available to you is imperative in securing capital
• Provide collateral if needed: most traditional lenders require a larger sum of collateral to finance against, but knowing what you have available is helpful in securing funding from any lender
• Research your options: just knowing what funding is available is half the battle. Understanding what kind of funding options you can choose, like a term loan or line of credit, helps set you and your business up for success

Best small business financing options for bad credit

Even though the common misconception is that most small business owners with bad credit have little business funding options, there are actually quite a few available. Explore the financing solutions below:

• Business Credit Card: A business credit card can allow you to have the ease of transactional financing wherever you and your business shop. Just be leery of high interest rates or low spending limits, where you might find more options in more conventional funding ways.
• Term Loan: A term Loan through an alternative funder, like Loan Solutions OU, allows you the ability to secure capital and then pay it off in set payment amounts and dates for added flexibility.
• Line of Credit: A line of credit provides small businesses with an easy way to access capital on a need-be basis. Line of credit funding is available to dip into whenever you need it, without providing the recipient with a large portion up front.

There are also other types of small business financing options that might be a great solution for your business if your business accepts credit cards or have outstanding invoices:

• Merchant Cash Advance: A merchant cash advance (or MCA) allows small business owners to leverage future credit card receivables to acquire capital quickly and conveniently. With varied cash advance amounts and flexible payment options, your business may be funded in as little as one business day.
• Invoice Factoring: Invoice factoring is like an MCA, except it allows you to leverage your incoming invoices to receive a cash advance upfront. And much like an MCA, it’s quick, convenient, and also offers flexible payment options to offer as much mobility as your business needs.

Choosing the right funder

Securing funding for your small business starts with knowing who to go to. While most owners will target traditional funding options, if you have lesser collateral or unsatisfactory credit, you might want to eye something from an alternative funder. Most alternative funders provide you with the ability to receive funding in various forms, , based on your business needs. They typically require less collateral, have a simpler application process and can be offered to those who have bad credit.

While traditional lenders, like banks and other financial institutions, offer loans and lines of credit to those with satisfactory credit and high collateral amounts to ensure they are able to be paid back. They also take a strict look at profitability and are very strict in who they choose to lend to.

Getting your small business loan with bad credit

Finding small business funding when you have bad credit isn’t as hard as you’d think. The process is simple, convenient and quick. To get started:

• Fill out an application online, including all necessary identification and income verification items
• Let us review with our team of highly-qualified business advisors, and if they have any questions they’ll reach out to ensure we are able to fund your business needs in a fast and convenient fashion
• Lastly, if approved, your business may be funded in as little as one business day — providing your business with working capital to ensure your business can grow and support its daily needs

Improving your credit for the future

Although it can seem like a burden, you can take a few easy steps in building your credit up to ensure your future funding options aren’t limited:

• Making payments on existing credit on time and consistent with each due date
• Keeping your utilization rate around 30%
• Avoiding too many hard inquiries from multiple credit applications
• Consolidating debt
• Having too many accounts open at one given time
• Closing accounts shortly after obtaining them

Your small business financing options overview

The myth that getting a small business loan with bad credit or other types of small business financing is impossible is going out the window — because with the right support and resources behind you, alternative funders will be able to secure capital quickly and conveniently.

Don’t be afraid to ask your business advisors questions and be certain that moving forward with an alternative funder is your best fit by always weighing the pros and the cons. If you have any questions regarding any types of alternative financing, like term loans, lines of credit, merchant cash advances or invoice factoring, call a Loan Solutions OU business advisor at: (877)-252-0827.

The post How to Get a Small Business Loan With Bad Credit? appeared first on Loan Solutions OU.

Against this backdrop, some highly notable veteran-owned startups have emerged including Plated, RedOwl, Unite U.S., and Black Rifle Coffee Company (BRCC) to mention a few. But like other new business owners, veterans have problems accessing much-needed credit facilities to realize their dreams. Most veterans have poor credit ratings, have no security for financing or business experience.

Business loans for veterans come in handy to help these entrepreneurs power their investment dreams. If you have served in the military and you run a business, veteran business loans are a godsend to cushion your business in the current tough business environment. With these credit facilities, you give your business a competitive edge in your target market.

There are several small business loan options suitable for veterans and they all come with unique requirements. This post explores the 2021 top business loans for veterans to help you make the best financing decision.

VA Loan

A VA business loan is business financing offered through the SBA and commercial lenders. The VA loans seek to empower this important category of entrepreneurs who might not access other funding from traditional banks.

Qualifications/Requirements for VA Loans

To qualify for a VA business loan, you must meet certain eligibility criteria. The following categories qualify for VA loans:

1. You should be a currently serving member of the military. Current spouses of active military officers, reservists, or national guard members also qualify for business loans for veterans
2. Discharged honorably from military service
3. Active national guard member or reservist
4. Disabled while in service
5. Widowed spouses of members of the military who died in service or because of disability while in service

For your application for a VA business loan to succeed, you need proof of service or discharge. The military ID, discharge papers (DD Form 214) come in handy for the loan application.

How to Apply for VA Loans

Every lender has unique requirements for VA loans but some of the common factors considered include the time you have been in business, personal and business credit score, annual business revenue and profit, financial records, tax returns, your business plan, licenses, and insurance among other factors.

With a good credit score and good business record, you enjoy the lowest interest rates and more favorable loan terms. Here are some considerations when you apply for small business loans for veterans:

1. How much money do you need? Evaluate your financing needs first and determine the amount that will solve such needs. In any VA loan application, the lender needs clarity on how much you need and the purpose of such a loan. Startup funds are more difficult to qualify for compared to Small business financing for an ongoing business
2. Secured vs. unsecured VA business loan: Compare these two loan options and determine which suits your business needs
3. Look at different VA loan sources and check eligibility: Every VA loan suits specific business needs. You need to compare the loan programs available and requirements to determine what suits you best. Look beyond the SBA loans and check the list of VA loan programs listed below to consider the best option
4. Prepare required documentation: For a seamless VA loan application process, collate all the documents required including bank statements, 3 years of business and personal tax returns, Personal and business credit score information, financial statements, tax records, and others
5. Compare loan offers based on your needs and pick the best
6. Check all the terms of the loan before submitting your application. Make sure you understand how the business loan works before signing any documents and specifically how the particular loan you are applying for works

Examples of VA Loans

To find the best VA loans, keep researching and discover the best funding resources out there. Some examples of

1. SBA Veterans Advantage 7(a) Loan: This is the most popular program by Small Business Association. Veterans enjoy longer repayment terms, lower down payments than other financing options. For a loan under $125,000, the upfront guarantee fee will be $0.
2. VA Office of Small & Disadvantaged Business Utilization (OSDBU): OSDBU is a financing program by the Department of Veterans Affairs. Through their Office of Small and Disadvantaged Business Program, veteran-owned businesses can access these loans that target economically disadvantaged individuals
3. Nav’s Small Business Grant: The recently launched $10,000 “Legitify Your Small Business” grant is ideal for financing your veteran-owned business.
4. Accion: This is a nonprofit organization that targets the growth of small businesses. They focus on those categories of entrepreneurs who can’t access financings such as women, minorities, and veterans. The program also helps you connect with peers, local organizations, and banks
5. Military Reservist Economic Injury Disaster Loan Program (MREIDL): This loan specifically targets veteran-owned businesses, which has an essential employee called to military service as a reservist. The SBA program gives you loans of up to $2 million through the MREIDL program
6. Service-Disabled, Veteran-Owned Small Business Program: Many veterans are in the contracting business but have no cash to qualify for tenders. This program provides veteran-owned businesses with contract financing. You can shore up your finances and boost its growth
7. LendingClub Veteran Loan: One of the biggest private lenders offering credit to veterans is LendingClub. Financing ranges from $5,000 to $300,000
8. StreetShares Foundation: The organization targets veteran-owned businesses with term loans, lines of credit, and government contract financing. You can get financing for your payroll or equipment purchases before invoices are paid by clients
9. VA VR&E Business Ownership Track: If you suffered an injury in service and you wish to start a business, the VA VR&E Business Ownership Track has a financing option for you. The key requirement is enrollment in the VR&E and you must have proof that your disability handicaps you from gainful employment
10.  SBA Express Loans: SBA also offers the SBA Express Loan program which is part of the 7(a) loan program but with faster approvals. Veterans who qualify can access loans of up to $350,000.Veterans who qualify have their upfront guarantee fees on SBA Express Loans waived

VA loans FAQs

1. Can I use a VA loan to start a business? Yes. The VA loans are available for both startups and existing businesses
2. Can I get a VA businessloan with bad credit? Yes, you can access VA loans with less-than-perfect credit profile but this comes with potentially higher fees and the terms are shorter
3. How much can you get for a VA business loan? The amount you get depends on the lender with some offering up to $5 million and others with lower limits
4. How does a VA business loan work? Every VA loan facility differs from the other. The credit facility has veterans in mind because these businesses have a hard time accessing credit. Repayments come from the business run by the veteran

Term Loans

What is a Term Loan?

Another option for veteran financing is a term loan. Financial institutions issue this type of financing with a fixed amount, fixed repayment schedule. The major attraction for a term loan is the repayment in regular payments over a fixed period.

If you have a veteran-owned business, this is one of the most flexible credit facilities to offset major equipment purchases and other huge expenses. If yours is a new business or you want to expand, a term loan offers a quick way to access working capital.

You can choose a short-term, intermediate, and long-term loan (up to 84 months) depending on your financing needs. Lenders include banks whose terms are stringent and online lenders who offer the loans faster and with fewer requirements. You can also access term loans from online peer-to-peer lending or institutional lending companies.

The costs of the term loan might go up when you consider other factors such as the fixed fees, origination fees, down payment (for real estate or business purchase), other fees and the closing costs for the loan when applicable.

Who Can Apply?

Terms loans are ideal for veterans who want working capital, purchase of equipment, real estate with payment between one and 25 years. If you have a good business plan, a term loan can help you set up the business idea.

What Are the Requirements?

General qualifications include:

1. Business should have been in operation for two years or more
2. Good credit score ideally above 750
3. Collateral may be required
4. Business credit history of a small business
5. Financial statements and bank records
6. Minimum time in business requirement

When you apply for a term loan, you have the option to borrow from a bank or an online lender. Banks have strict requirements including collateral and good credit scores but you also get a longer-term for repayment. Online lenders may have less stringent requirements and have a fast application process.

Term loans give you access to large amounts of cash for multiple businesses uses. This is an option for a VA business loan if you want to repair your credit through reliable repayments.

Line of Credit

 What is a Line of Credit?

Running a business is tough, and there are many times when cash flow can constrain your operations. If you’re a veteran running a business, a line of credit helps unlock any cash flow problems.

So, what is a business line of credit? This is a flexible financing arrangement where the lender qualifies you for a preset financing offer. You can access money from the LOC at any time until you reach the limit.

As you continue repaying the loan, you can borrow again if your bank offers an open line of credit. The biggest advantage of the line of credit (LOC) is the flexibility and availability of funds in a never-ending cycle. For the repayments, you can opt to clear the outstanding balance all at once or go for monthly payments.

Who Can Apply?

Line of credit is an apt financing facility for your veteran-owned business if you experience cash flow problems or want to execute on a great business opportunity. Some LOCs are unsecured but you may be able to get better terms with a secured line of credit. This form of credit is available from banks, credit unions or other alternative financing companies.

If your veteran-owned business qualifies, it’s possible to access cash up to the maximum amount offered by the lender for a set period. Fees only applies to the borrowed amounts. Once you repay the borrowed funds, your line of credit becomes available again and you can start the cycle and continue borrowing any time you need the funds.

A line of credit is a great option to sort your cash flow issues. This is the best option when you run a stable business whose revenues can easily repay the borrowed funds. You never have to worry about problems with working capital as long as you maintain your LOC in the best state.

What Are the Requirements for LOC?

The terms of a line of credit can me a little stricter than other types of financing. Your business must have been in operation for at least six months to one year. A financing company may also require a  minimum annual revenue to qualify for a business line of credit.

For the line of credit, you may need a better credit score to obtain better terms or larger LOC. When you choose LOCs, consider is there are fees and limits on the amount you can borrow any single time.

Another critical consideration is the draw period, which refers to the period within which you can draw money from the account. Confirm the draw period and determine if it suits your business financing needs.

Documentation required includes personal and business tax returns, bank account records, and business financial statements. Your business credit score is an important consideration and with a higher score, you can access better terms.

Business Credit Card

What Is a Business Credit Card?

Your veteran-owned business has multiple expenses to cater to daily. Such expenses might not require an application for veteran business loans. A business credit card comes in handy in this case to finance ongoing expenses and provide working capital.

With a business credit card, you can easily separate your business and personal expenses to ensure better bookkeeping and tax purposes. Your business credit card gives you easier access to cash for different business purposes.

Other advantages of a business credit card include the ability to your business’s financial history. You also don’t have to worry about cash flow issues because the credit card gives you enough cash for your operational needs.

If you run a busy business, the credit card allows you to delegate spending to the workers with good tracking.

The best cars come with some perks and benefits from redeemable loyalty points, rewards, travel packages, cashback offers, and much more.

Who Can Apply?

If your veteran-owned business requires easy access to cash and you don’t want to go through the long-wining loan application process, a business credit card is a perfect solution. This is also an ideal way to manage and itemize business expenses.

The card works best if you need lower cash amounts up to $50,000 to cater for urgent expenses. You don’t need a strong credit score to get a card and this is the best option for working capital, emergency expenses, and ongoing expenses.

If you have been using your personal credit card for business purchases and other operational expenses, you need to apply for a business credit card. This is a simple strategy to promote better financial management and also access much-needed cash injection in your business.

If you have a hard time separating personal and business finances, your business credit card can help you do this. You don’t charge everything on your personal credit card anymore. It’s also an important step in building your business credit for future access to financing.

What Are the Requirements?

Some requirements for a business credit card include financial statements, proof of individual income, bank statements, legal name, contact information, and social security number, proof of business registration, tax details, and annual business revenue, and estimated monthly spend.

Summary

Veteran-owned enterprise plays a critical role in the country’s economy. This is a special cadre of businesses who gave everything to guarantee the country’s safety and prosperity. The least the financial industry can do is to support veteran-owned businesses with easy-to-access and cheap loans.

Veterans can access diverse financing options either to fund their startups or to boost their businesses. This guide offers a comprehensive overview of some of the best financing options that you should consider for your veteran-owned business.

The VA loans from diverse programs and organizations offer cheap, flexible, and reliable funding. Term loans are the best Small business loans for veterans already in business. This is a business loan that can sort out major expenses in your business.

For easy access to cash every time you need it, a line of credit is the best solution. Similar to a line of credit is a business credit card but in this case, there’s no draw period to limit the time within which you can use the credit availed.

Whatever kind of veteran-owned business, there’s a financing option suited to your business needs.

The post Top 4 Business Loans for Veterans appeared first on Loan Solutions OU.

One of the biggest reasons for small business failure is poor cash flow. Many businesses struggle with inadequate cash in their formative years. With no financial resources, it becomes virtually impossible to sustain growth, innovate or compete.

Luckily, the financial industry has a wide range of financing options for businesses. A small business loan is a godsend when your business needs money to run. Whether you need money to purchase stock, equipment, or for operations, a business loan helps unlock your cash flow issues and guarantee survival for your venture.

The first step to business financing is learning how to apply for a business loan and understand how these loans work. This guide explores in-depth the steps, eligibility, documentation, and everything else you need for a small business loan application.

1. Determine How Much Financing You Need

• Consider What You Need and What You Can Afford

A good plan is one of the most important considerations before you start your business loan application. The biggest mistake you can make as a business owner is to apply for a loan without a goal in mind.

Start with a needs assessment to determine what and why you need business financing. While there are credit facilities readily available, it’s not advisable to rush to apply without a solid plan. Most businesses need cash injection, but such credit facilities only work if you identify the purpose.

Some common uses of business financing include:

1. Business expansion ( for example acquiring a new business or opening another branch)
2. Purchase of equipment
3. To cover day-to-day expenses
4. Working capital
5. Grow your business through marketing and other strategies
6. Ease cash flow constraints

Depending on your business, there are endless purposes that you might need cash for. Make sure you prioritize those expenses that will boost your business, promote growth and give you a competitive edge. For instance, if you’re in the logistics industry, adding a new truck to your fleet would help grow your business more than renovating your office.

Once you identify your business financing needs, set the amount you need from a potential lender. You need to carry out an evaluation of your business’s financial health. Working with a financial advisor can help you determine how much you can afford.

The worst mistake you can make when you apply for a business loan is to borrow more than you can afford. Look at your financial statements, revenue flow, and revenue projections to determine what amount your business will easily afford.

When you apply for a business loan, make sure you understand the total cost of the loan including any down payment required for asset purchase or business purchase, closing costs, insurance, and other fees. You should also analyze the fees and payback amount and find a loan that won’t strain cash flow.

2.Review Your Business Qualifications

After you determine how much financing you need and assessing your business’s capacity to repay the loan, move to the next step and prepare yourself to meet the loan requirements. One critical step in learning how to get a business loan is to identify the qualifications required and make sure your business meets these.

Every loan has unique requirements, but there are some general qualifications that every borrower should meet. The idea is to learn these qualifications early and prepare yourself as this saves you a lot of time in the loan application process. Here are some of the considerations:

• Credit Score

Your personal credit may be used by the lender when underwriting the business loan. The personal credit score may assist the lender in indicating how likely it is for the business to repay the loan and how you manage finances.

Most small businesses have little of a history, which means their business credit score might not be used as much by the lender. The goal is to boost your personal credit score before you apply for Small business financing. A credit score of 600 and above gives you a chance to qualify for a high loan amount.

However, the financial market still has financing options for business owners with lower credit scores. If you want to access cheaper business loans, start repairing your credit score by first reviewing your credit card report, disputing any incorrect entries on your credit report, and repaying your bills on time.

• Time in business

One of the first questions any lender will ask is “how long have you been in business?” If you want to successfully learn how to apply for a business loan, you must know how to address this important question. The longer your business has been in operation, the better.

If your enterprise can survive for a few years before you apply for a business loan the better. Such a strategy will qualify you for higher amounts and more favorable business loan terms. If you’re facing serious cash flow issues in your new business, you may still have funding options.

• Revenue

Among the crucial documents the lender needs from you is the bank statement accompanied by the balance sheet, tax returns, and profit/loss statements. The reason your financier wants to see these records is to determine the health of your business.

If your business’ revenues are strong, you have a higher chance of qualifying for a loan. The financial statements assure the lender of your ability to repay the amount borrowed. A healthy balance sheet assured the lender that their money is safe in your hands.

Your role as a business owner is to ensure you have all financial statements. Good bookkeeping can make all the difference when you apply for your loan. The records allow the lender to track your company’s performance and determine if the cash injection will make a difference.

3. Compare Business Loan Options

Now that you have determined what your business needs to qualify for a loan, the next step in learning how to apply for a business loan is to identify different Small business financing options. The financial market has grown beyond traditional banks and credit unions.

With most small businesses struggling to access credit from traditional sources, alternative business loans have come in handy. Whatever your business financing needs, the following are top business loan options to consider:

• Term Loan

A term loan is a type of small business loan which comes with fixed-term and regular payments. The loans can be short-term, intermediate, or long-term. The term can range from four months to 25 years, depending on the business.

If you have large expenses planned for the future, and your business has sound performance, a term loan can help with such expenses. From equipment purchases, new business acquisitions to working capital, a term loan guarantees you have the cash needed for your business to continue growing.

If your business is in the manufacturing sector and you need an expensive machine, a lender gives an evaluation of your business to determine how much they can offer. You might need to make a down payment for such a purchase if there’s no 100% financing.

For a term loan, a good personal/business credit score is important, as is impressive business performance. Traditional lenders require collateral for such funding but also offer longer repayment terms and favorable terms.

To apply, you need your financial statements, proof of registration, and credit rating information.

To better understand term loans, assume you talk to your bank and you qualify for a term loan of $150,000 with a 2 year repayment period. Such a loan may come with costs including an origination fee . The total costs are used to determine your monthly repayments.

The best thing is that you know what you pay throughout the term of the loan and you can easily plan for this in your monthly expenses.

• Line of Credit

One of the most overlooked Small business loan options is the line of credit (LOC). As you learn how to apply for a business loan, this is one of the lesser-known financing options you discover and it can make all the difference for your business. Learning what is a business line of credit could make all the difference for your business.

This is a flexible form of financing where the bank or other financing company evaluates your business and offers a defined amount of money that you can access whenever the need arises. You can access such money quickly to offset any business expenses that arise and repay it immediately or gradually.

There’s a limit to the line of credit offered and a draw period which is the time within which you should use the available funds. Once you borrow and repay, the line of credit becomes available once more, and the cycle continues.

If your business is cash-intensive and you always have bills to pay daily, this is the perfect way to overcome any cash flow challenges. You have access to money on demand which is a dream come true for a small business owner.

For the line of credit, you only pay credit only when you utilize the funds, and assessed a fee only for the amounts borrowed. Whether you want to address cash flow issues, emergencies, boost your working capital, or cash in on a business opportunity, your LOC comes in handy.

Some requirements when you apply for a line of credit include business financial statements, personal/business tax returns, bank statements, and your credit score information. A good credit score qualifies you for a higher amount and better terms for your LOC.

Take for instance if your business qualifies for a LOC of $30,000. If you borrow $15,000, you still have $15,000 more available any time you need more cash. The fees only apply to the $15,000 you have borrowed. Now, if you repay the borrowed amount plus fees, your line of credit is revived and you have $30,000 available for your business.

• Asset-Based Loan

If you have been in business for some time and have acquired some assets along the way, an asset-based loan is an ideal option for business financing. This is a loan secured through inventory, plant, and equipment (PP&E), vehicles, accounts receivables, marketable securities, buildings, or other assets whose value is quantifiable.

This is a popular form of financing by small businesses to cover cash shortfalls. It is an alternative to a line of credit or term loan if you don’t have a good credit score or cash flow.

The collateral boosts your chances of accessing enough cash due to the reduced exposure to risk for the lender. The fees are also more favorable for collateralized financing. The more liquid the asset, the less risky the loan is to the lender, and the better the loan terms for your business.

If you need quick cash and your business has assets, you can unlock financing through an asset-based loan. You need the asset, financial statements, and identity validation documents. The more stable your business, the easier it is to access an asset-based loan.

In the qualification process, the lender assesses the assets’ value to determine the amount to loan. They ensure the cash advanced can be recouped by selling the asset in case of default. It’s good to understand that you stand to lose the collateral if you default or can’t repay the loan.

If, for instance, your business needs $200,000 to buy a new business and you can’t qualify for a term loan, the lender can consider any assets you have. Your current business property can serve as collateral. The lender gets a valuation of the property and offers about 50% of the value. For more liquid assets such as marketable securities, the loan offer can go up to 85% because these are easier to sell and recoup the costs.

The asset-based loan provider doesn’t offer 100% of the face value of your asset because they consider the cost of selling the asset and any potential loss of value loss in the market.

• SBA Loan 

The Small Business Administration (SBA) has some of the best small business financing options. The loans guaranteed by SBA come with better terms including lower rates. The loans are available through SBA-approved lenders. With the government guarantee, it becomes easier for business owners who can’t qualify for traditional business financing to access the much-needed cash to grow their businesses.

Whether you need working capital, capital for equipment purchase, busies expansion, debt refinancing or any other needs, an SBA loan suits the purpose. You enjoy longer repayment terms than you get from banks and lower rates. The only downside is the lengthy application process.

The most popular SBA business financing options include the SBA 7(a) Loan Program, CDC/504 Loan Program, and Micro-loan Program. The loan amount ranges from $50,000 for micro loans to $5 million for the 7(a) Loan Program. The loan term extends from 1 year up to 25 years.

The SBA loan requirements include identification documents, bank statements, balance sheets, personal and business tax returns, and a business plan. A good credit score is crucial for easier access to credit through most SBA financing programs also consider businesses with bad credit.

4. Choose Between a Traditional Lender or an Alternative Lender

One step that many business owners overlook when learning how to apply for a business loan is the choice of the lender. After assessing your business needs, determining the amount you need, and choosing the best financing option, consider which lender best suits your needs. You can go with traditional lenders such as banks or alternative lenders such as online private financing companies.

• Pros and Cons of Using a Traditional Lender

Some advantages of using a traditional lender include:

1. Widest variety of business loans: Banks offer the broadest variety of business loans including a line of credit (LOC), term loans, business credit cards, equipment financing, and more
2. Better rates: To borrow from a bank, you must have built a strong relationship and this may allow for lower rates
3. Longer repayments: Your relationship with the traditional lender and excellent business performance can get you a longer loan repayment period
4. Fixed rates allow for easier budgeting

Traditional lenders have some drawbacks:

1. Lengthy loan application/qualification process
2. Banks are averse to risk which means your business must be doing well
3. Collateral is a key requirement that disqualifies many small businesses
4. Hidden fees/charges

• Pros and Cons of Using an Alternative Lender

Alternative lenders include online loan companies and they have multiple benefits such as:

1. Faster loan processing
2. Less stringent requirements for loan qualifications
3. Wide variety of tailored business loan products
4. Funding for any type of business
5. A flat origination or processing fee
6. Availability of loans with poor credit

Some cons of alternative lenders include:

1. Shorter loan terms
2. Smaller loan amounts compared to banks
3. Frequent payments are required by some lenders

5. Gather the Required Documentation

Now that you understand how to get a business loan, the next critical step is the actual application. For this stage, you need essential documents that include:

• A business banking account
• 3 months of bank statements
• Business license
• Legal contracts and agreements
• Legal documents
• Financial statements (Annual revenue and profits, Profit & loss statements)
• Tax returns
• Business plan (if required)
• Collateral details (if required)

The documents required can vary from one lender to the other and the type of loan also determines what the lender might ask for. You should enquire about the documentation early enough to start the preparations and avoid delay in approvals for your business loan.

6. Submit Your Application

Most business loan applications are now online. You only need to scan your documents and upload them on the lender’s online platform. In some cases, the officer dealing with your account provides an email account for the submission of the application.

After evaluation of the loan application, you receive a loan offer with the terms which you should read carefully. You can opt to sign or continue your search for the best small business loan.

Summary and Conclusion

Do you need cash to boost your business? If so, you need to learn how to apply for a business loan. A business loan unlocks your cash flow issues and helps you meet your financial obligations. It’s advisable to understand the different loan options on the market and how they work before you apply for financing. You should also compare different lenders to identify the best for you.

With this guide, you now have invaluable information to help you get the right small business loan. Ultimately, the financing will give you a competitive edge in the increasingly volatile business environment.

The post 6 Steps to Apply for a Business Loan appeared first on Loan Solutions OU.

Due to the nature of ecommerce businesses, a business may even qualify for merchant cash advances since as a business the operates solely online typically accepts credit card or debit cards. This means that for online businesses, there are various ways to receive working capital than just your traditional small business loan. In addition, this opens doors to work with traditional as well as non-traditional funders. Below you can explore the top 7 business financing for ecommerce businesses.

Term Loan

A term loan is a kind of financing where your ecommerce business gets a specific amount with a specified repayment schedule based on a fixed or floating rate. These loans are available from both traditional lenders and online financing companies.

It can be a short-term (1 year), intermediate or long-term loan that can go up to 25 years. For instance, you can apply for $250,000 for a warehouse purchase for your business to be repaid within 15 years at a 14% fixed rate. You’ll repay fixed monthly amounts until the end of the loan term.

Line of Credit

A business line of credit is a pre-approved amount (from $50,000 to $500,000) of financing, which your ecommerce business can draw on any time you need cash. It’s ideal for working capital, emergencies and ongoing expenses, and you only pay a fee for the amount you draw on the line of credit.

With a line of credit, you never have to worry about cash flow issues. For instance, you can qualify for $300,000 but only draw $40,000 for some use. The fee only applies for the $40,000, and once you repay, you have the entire amount available to draw on.

Invoice Factoring

This is financing against your purchase orders/invoices. The cash you get unlocks your cash flow problem, and you can deliver customer orders within the guaranteed time. For invoices, once they’re paid, the funder deducts their money.

For instance, assume you have a large order and no cash to buy the stock. A financing company pays the manufacturer/supplier directly for the delivery of inventory to you. The customers pay the financing company directly, and the financier deducts some fee and sends the remainder to your ecommerce business.

Asset-Based Loan

This is a loan secured by an asset such as property, plant and equipment (PP&E), inventory, accounts receivable or marketable securities. A lender uses a loan-to-value ratio to determine how much to give your ecommerce business.

For instance, if you have accounts receivable valued at $120,000 and the lender gives a loan-to-rate value ratio of 70%, your maximum loan amount is $84,000.

For asset-based financing, lenders prefer more liquid assets that are easier to sell. These loans are easier and faster to apply for and have better interest rates.

Merchant Cash Advance

Merchant cash advance is a great financing option for ecommerce businesses with good credit card sales. Your ecommerce business can access cash against future sales, and you only have to provide the financial evidence.

The financing company will review your credit card processing statements during the application process. If approved and once the advance is provided, the funder will receive its payments as an agreed upon percentage of your future credit card sales.

SBA Loan

SBA loan is most suitable for more established online businesses and comes from the U.S. Small Business Administration (SBA guarantees the funding). SBA uses specific banks as intermediaries for small businesses that meet stringent conditions. The SBA loans you should consider include the SBA 7(a) loan, the SBA 504 loan program, the SBA micro-loan program, and others.

Business Credit Card

A business credit card is one of the most effective funding sources for an ecommerce business, and it’s one of the best ecommerce loans for startups struggling with cash flow issues. The business credit card gives you access to ready cash up to the predetermined amount. Lots of business credit cards come with great perks, such as cash back. This card also helps separate your personal and business finances.

Summary

Due to the nature of an online business, there are more than just a traditional business loan as a business financing option. Whether your online business needs more merchandise, more staff, marketing costs or expansion there are loans, advances, and lines of credit available to get your ecommerce business closer to the working capital it needs to succeed.

The post 7 Business Financing Options for Ecommerce appeared first on Loan Solutions OU.