Wednesday, March 5, 2008

Want Small Business Funding Fast – Get your basics right

Your bankers should be your first stop in applying for small business funding. You and they have a history of working together. Familiarity goes a long way in pre-clearance of doubts and insecurities. Also banks offer slightly better rates for commercial loans than others.

But banks are more circumspect, and adherer of rules and guidelines regarding the borrower.

There are many other types of business lenders. The main differentiating factor is the type of loans they offer: secured or unsecured loans.

Banks usually offer unsecured ones, while independent financial organizations favor secured loans more.

These independent financial organizations are prepared to take more risks on startups and smaller businesses than banks. Often they specialize in particular industries, types of loans, or business sizes.

Essentials of loan applications

It is the first and perhaps the most important part of borrowing process, especially small business funding. Applying for a commercial credit requires a lot of preparation. Following are some key documents you are required to prepare:

  • Financial statements: balance sheet, profit and loss statement, and tax returns of the company
  • Personal financial statements and tax returns for last three years
  • Cash flow estimates on the monthly basis
  • Comprehensive business plan
  • Precise loan utilization detailing
  • Profiles of decision making people i.e. top management

The thoroughness and accuracy of these documents are absolute musts for successful borrowing, so it pays to prepare them carefully. Have your financial documents reviewed by a qualified accountant before presenting them.

Business Cash Advance, a Good Alternative:

But is there any alternative to loans so far as the small business funding is concerned? Yes, there are many other companies that are offering business cash advance to small business owners.

Business cash advance is not a loan and the organization offering this cash advance gets their money from the credit card sales that the business does in a specific period, there by reducing the burden of paying back the loan and the terms and conditions to qualify for such cash advance are also relatively simple and can be good alternative to bad credit small business loans as they come at very high interest rates.

There are quite a few organizations which provide such cash advances. Organizations like MerchantCashDirect usually provides cash advance for working capital needs. They more often than not, target specific industries.

I hope that I helped clear some doubts and given some useful information. If information is power, you are now empowered to succeed in your endeavor to secure loan, there by realize your dreams.


Anonymous said...

Hmm… I'll have to keep this post in mind because I want to run my own business soon. I have a good amount of money saved, but I know I'll have to take out a loan at some point. I can use all the advice I can get. Lately I've been thinking about buying a business instead of starting one from scratch. Any suggestions? Advice? Thanks.

Anonymous said...

Jon --

I suggest checking out some other online websites. There's one called, which is an online global marketplace where you can buy or sell a business. You can also use it to find a lender, broker, accountant, etc. It's a good place for entrepreneurs to find businesses and resources.

Then there are always local small business groups, like the Chamber of Commerce, which can also be very helpful.

Good luck!

albert george said...
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