Posts Tagged ‘BUSINESS LOANS’

CONSIDERING A BUSINESS LOAN?

Friday, November 25th, 2011

Is your business suffering and you are seeking instant monetary support for your business then you can either opt for the route that many other business organizations in the United Kingdom opt or sell off your inventory. The choice is yours. Business loan is what a large number of companies look forward to when seeking immediate cash. These loans can be availed as per your wish and requirement. You can start a business or expand the new one. Funds availed through this loan can be acquired by anyone who is a citizen of United Kingdom and wants to create a niche in the market. Many young business entrepreneurs have been applying for it to realize their business dreams.

With this kind of loan facility, you can buy raw material, equipments or office furniture to stay ahead in this highly competitive business world where various businesses of the same nature crop-up every other day. These loans are a sure-shot way to survive here and emerge as winners. In addition to this, you can hire more employees to offer quality customer service to all clients and promote your business like you always desired for. Whether it is cash that a borrower need desperately or you simply wish to spruce up your current business, these loans can do it for you without delay.

More often than not, a young business entrepreneur approaches either money-lending firms or banks for a loan needed to start a business. However, in this day and age, you can apply for it from the comfort of your home. It is the online mode of application that has enabled a large number of people to fetch instant funds. Internet is just the right destination to search for such loans. Ever mounting competition amidst online money-lenders has proved beneficial for borrowers for they have a range of options to choose from. You can choose the one that fits your existing business needs and is available at reasonable interest rates.

Even those having faltering credit background can finance their new business with this amazing loan facility. Obtaining this financial assistance is not at all an easy job if you are living with tags like insolvency, county court judgments, arrears, foreclosures, non payments or late payments, individual voluntary arrangements or defaults. However, with this loan facility even they can grab funds without giving a second thought.

Business loans tend to carry a high rate of interest. It is, therefore, suggested that you avail this loan after conducting a proper research. Make sure that you spend the acquired amount carefully so that you have sufficient funds at the later stage. Compare online quotes before making any decision. Funds to start a new business are just a few clicks away.

This article brought to you by the #1 resource for wholesale merchandise, Retailers Forum magazine.

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GETTING A LOAN FOR YOUR BUSINESS, THE IN’S AND OUTS

Thursday, December 23rd, 2010

Starting up and running a small business is not something that can be decided on a limb. It takes time to properly draft an effective and practical plan that covers many of the fundamentals such as start-up costs, proposals, and financial exit strategies. However once that is accomplished, the benefits completely outweigh the disadvantages of taking that extra time. The beauty of having a plan is that it can change at any point in time. This is especially important for owners because things change at different points in time particularly where business financing is concerned. One question that comes up very often with small business finance is that of when to start getting a little help from the bank. Here is some general advice on when to consider a loan.

- You Are Increasing

You opened with your product or your service and now you need to buy equipment in order to cope with the demand. You started off and your customer base has grown to the point where you are looking at expanding your building. When you are taking out a loan to help pave the way for greater opportunities, you are making the right decision. Not just because you’re setting yourself up to make more money, but because you’re most likely going to be able to pay it back. This requires a bit of forecasting, but it is certainly more than possible to put together a reasonable strategy.

- Relocating

You’ve outgrown your old building, the income and customers are still steady but its cheaper to just move to a new building, you want to add an extra store. Whatever the reason for changing buildings, the key is that it is because you are growing. If you need a loan to put a down payment down on the new building or something to that effect, it is a good idea for you to at least begin to consider small business loans.

- Upfront Costs Are Required

This does not mean upfront costs in the sense of monthly rent or daily operations- you should never take out a loan for those reasons. However if you are looking at serious renovations or at upgrading your current equipment there are often upfront costs that you may not be able to afford all at once. As long as you are careful with your accounting and you have some idea of what your finances are going to be looking like for the duration of the loan, consult with your financial advisers but don’t hesitate to get a loan if the opportunity is there and the reasoning is sound.

Taking out a loan is a decision that is never taken lightly when it is just individuals involved, but when you are considering small business loans there are good and bad reasons for going through with it. If you are planning to use the money to cover bills and the like, there are more serious problems that need to be addressed. However if you are looking for ways to manage small business finance through loans, some good reasons are if your company is increasing, you are relocating, or if there are upfront costs that will need to be covered. The key is to make sure that you take the money because things are going well. That way you can rest assured that the money will be paid back to the bank.

Make Retailers Forum Magazine your source for wholesale merchandise and informative articles and tips to help you run your business.

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GETTING FUNDING FOR YOUR NEW OR EXISTING BUSINESS

Tuesday, June 29th, 2010

Most businesses start out thinking the first thing they need is a great business plan. The popular myth is that potential lenders will place great stock in your business plan as a major consideration for approving the financing you need.

While a well written business plan will assist you when you are seeking financing, it is far down on the lenders list behind things such as your business management teams experience, your past business successes and your lending character. Having a plan for accessing the business capital you need to execute your business plan is what is required to bring your business success. Not having a viable business financing plan is the direct cause of why 90% of all new businesses fail.

Your lending character means the lender sees you having the ability and stability to repay the loan. They also ask how far they believe you can take the business to maximize the potential earnings and therefore their chances of getting repaid.

The first thing a lender is going to look at is how did you structure the business and were you responsible and knowledgeable in that. Are you Incorporated or an LLC? If not you are declined for a business loan and everything becomes based solely on you as an individual. Did you do your EIN, State, business licenses and bank filings correctly? If not, you are declined because a lender requires attention to detail.

A simple business credit report check by a lender will quickly show whether or not you are even in the ballpark for getting approved for financing. If the lender finds that you have not bothered to insure that your business has active reports with all three major business credit reporting agencies, then of course you are immediately declined.

Next, the lender will look at the character of your business credit reports. What do they say about your business? What kind of payment histories have you had with debts that are easy to get such as vendor trade lines, small business credit cards, equipment leases, etc? If your business has no credit history or very minimal history then no lender will even consider your business for a larger loan when you have no track record of paying smaller debts.

If you pass these simple tests, now a lender will get to the heart of you business loan application and it is only at this point that you even get the opportunity to present your funding request. Unfortunately as high as 90 percent of all business loan applications never get to this point, because most business owners never take the time to complete the initial steps.

So you have made it this far, The next question you need to ask is what is a lender going to want to see? Debt service! Here is where the lender finally looks at your business plan, or at least the financial pat of it, to determine if your business can debt service the loan. To make this determination a lender will test the reality of your numbers. Basically this means do your numbers add up and do they make sense.

If you do not know anything about accounting you had better get help. When a lender looks at your projected financial statement and finds simple accounting errors, then in most cases you will again be declined. They do not want to lend money to someone who cannot produce a simple proof and loss statement; or someone that cannot balance a balance sheet. There is a lot of help out there, get some.

Next, a lender will look at the market niche section of your business plan. While most business owners think that this is the place that sets them apart from the competition, it actually is the part where lenders will compare you to your competition. Here is where lenders must see that you have done you market research. Can the revenue claims that you are making in your financial projections be backed up by the actual market demographics for your specific business industry, location, customer base, etc.? It essentially comes down to the need for your product or service.

All of this can seem overwhelming and in truth it can be. It is the reason that 97 percent of all business loan applications get declined. The overriding reason is that business owners are not taught this in school and typically only gain this knowledge through years of brutal experience that normally includes having one or two failed businesses under their belts.

Retailers Forum magazine wishes all of our readers success in funding their businesses. Since 1981 we have been the number one source for wholesale merchandise and business information.

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HOW TO OBTAIN AN SBA LOAN FOR YOUR WHOLESALE MERCHANDISE BUSINESS

Monday, June 8th, 2009

The SBA or Small Business Administration loan is a significant source of financing for small businesses. Typically, SBA loans are used to finance plant construction or expansion, to purchase equipment, and to provide working capital. Under the SBA Guaranty Loan Program, loans to entrepreneurs from private lenders, usually banks, are guaranteed for 80% of loans up to $100,000 and 75% for loans over $100,000.

Working capital loans generally have maturities of five to seven years. Longer maturities are used to finance fixed assets, such as land and buildings. Lenders apply directly for SBA loans for their customers. Essentially, you are a customer of the bank, and the bank is a customer of the SBA. You will not deal directly with the SBA but will work through your lending officer.

If the bank feels that you are a creditworthy customer and is willing to apply for the SBA loan, which greatly minimizes its risk, it will prepare a loan package to submit to the SBA. This loan package will contain the bank’s credit analysis of your venture and the loan request.

The SBA will perform an independent review of the loan package. It will determine whether the business is eligible under its guidelines and whether the entrepreneur meets its credit requirements. The agency closely evaluates whether your sales and financial projections are realistic. In addition, it scrutinizes your repayment ability.

Many banks have signed participation agreements with the SBA. However, only 50% of these banks are active lenders and send in applications for SBA loans. Further, only about 25% of these lenders aggressively pursue SBA loans. Therefore, it is important to determine whether a potential lender regularly participates in the SBA loan programs.

The interest rate the bank charges you will vary. A bank can charge up to 2.25% above the New York prime rate for loans with maturity dates of less than seven years. On maturities over seven years, the bank may charge up to 2.75%. An interest rate can be fixed or variable, depending on your negotiation and relationship with the lender.

The SBA does offer a direct loan program, but currently the funds are available only to Vietnam era veterans and other disabled veterans who have a 30% or more compensable disability. To obtain additional information about the SBA business loan programs, call its business development division. You can also ask for the brochure of Business Loans from the SBA.

You could also contact a local small-business investment company or SBIC, a privately owned company, licensed by the SBA, to provide equity capital and long term loans to the entrepreneurs. Your local SBA office can provide you with a list of SBICs.

Smart Tips for Obtaining an SBA Backed loan

1 – Develop a business plan that contains proper financial projections, including cash flow, profit and loss statements, and balance sheets. Make your projections month by month for the first year of operation and then annually for the next three to four years.
2 – Prepare a current personal financial statement for any principals involved in the venture.
3 – List the collateral to be offered as security, including an estimate of the present market value of each item.
4 – State the amount of the loan request and the purpose for which the funds will be used.
5 – Establish a business relationship with a full service bank that participates in government lending programs.
6 – Make an appointment with your loan officer and ask him or her to finance your loan.
7 – If the loan is turned down, ask about the possibility of using the SBA Guaranty Loan Program.

If you follow these few tips for applying SBA loan, you should be able to successfully have the approval for the loan. You can also do the research on the web for more information about the loan application process.

About The Author

Teeny is a writer for finance, computer, travel, cars, shopping and other subjects for many years, please visit http://www.fidetips.com/finance for more information. This article brought to you by the number one magazine of wholesale merchandise in the industry, Retailers Forum Magazine.

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