A business loan at the right time, and with the right lender, can pull your organization through tough times, and give it the impetus to continue growing. Sources for business loans are abundant and varied . Each lender will have their own set of qualification criteria and approval processes for loan applicants, as well as different types of loans and repayment schedules. Some may require that you have an excellent personal credit history. Others offer loans to business owners with lower credit scores, but require additional collateral or documentation that demonstrates your ability to repay.
This guide is designed to help you through the process of finding a lender who can meet your needs. You will also find tips on how to get approved for the amount you need.
Factoring is a financing option based on your invoices that are awaiting payment. In the factoring transaction, your business sells, at a discounted rate, its accounts receivable, or invoices, to a third party, called a factor. This sale allows you to receive immediate cash to finance continued business growth. Factors can make funds available when a bank loan is not feasible because the primary focus is on the credit worthiness of your company's debtors. Factoring can be a good option for under-capitalized businesses that have the profit margins to absorb the factor's fee.
Merchant cash advances, also known as business cash advances are a fast and relatively easy way to obtain needed cash to get your business through a slow period orto cover expenses. If your business qualifies, the process for obtaining a business cash advance is quicker and easier than applying for a traditional business loan. Business cash advances involve selling a percentage of your company's projected credit card transactions based upon your business's credit card transaction history. This is not a loan, but rather an agreement in which your merchant account provider purchases the right to receive a percentage of your future credit card sales based on your company's credit card sales history. This is a short-term financing option, and can help your business maintain cash flow or pay for equipment or other needs to help your business grow.