Posts tagged with: small business

Get Your Business Rolling!

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As a small business owner, one of the many challenges that I faced was financing. I think I speak for others when I say that business loans are one of the biggest challenges for SMBs today.

The reason I say this is that banks are tightening their requirements when it comes to approving individuals for business loans. Regardless, you need capital to grease the wheels of your business.

So, I got thinking. Where is the best place to apply for a business loan?

Remember, chance favors the prepared mind. So, I set about doing my research on precisely what I need the money for, what loan would best suit my needs, and which lender could best accommodate me.

Every business needs liquidity to stay operational. But when you’re applying for a loan, you need to have a blueprint of how that loan is going to help your business grow.

As a small business owner, I have to think carefully about the specific type of loan that I need. Since there are so many lenders out there, cost becomes an important consideration.

The terms and conditions of the loan (payback period, interest rates, early payoff penalties etc.) are paramount. Naturally, your credit score is going to come into the reckoning as well.

Fortunately, I maintained a credit score of around 770 for quite some time, thanks to regular repayments of my bills, low credit utilization, and a rather limited number of inquiries for additional lines of credit.

Over the years, I learned that one of the best ways to manage your credit score is to diversify the types of credit that you have available. In this vein, mortgages, auto loans, student loans, credit cards, and store credit will help you.

When you are managing your credit, you want to be sure that you shop around for the most appropriate business loan. I like to use credit loan aggregators services since these allow me to do comparative shopping.

Once you’ve got a short list of lenders, you can start to narrow them down even further according to the types of services they offer.

As I said earlier, I am in the process of expanding my business operations. I want to branch out into other cities by marketing my home-based business on the web. To do this, I need to create video retargeting content, increase my marketing budget, and employ the services of SEO experts.

Fortunately, I’ve been in business for several years now and this makes it easier to apply for a loan. As soon as you have a history of revenue streams, you are looked at more favorably by banks and non-bank lenders.

I’ve seen many of my friends being turned down because they were relative newcomers to the scene, and still operating in their first year of business. Remember this: Lenders want to see your ability to repay the loan, and this is why startups face so much pressure all the time.

If you’re wondering about different types of small business loans, consider that you can use different types of credit facilities. These include crowdfunding, microloans, business credit cards, and even loans from friends and family.

I don’t recommend the latter option since you don’t want your personal relationships to sour if your business does. My for-profit business has been fairly stable over time, and I needed to expand operations to keep on growing.

I didn’t want to go the bank route since I didn’t want to provide collateral. Banks typically take a little bit longer to approve loans than non-bank lenders, and that may work for some people.

The average SBA loan ranges between $5,000 on the low end and $5 million on the high-end. Small businesses like mine find it a little more difficult to get loan approval because our revenue streams are so much lower.

That’s the reason decided to go with a non-bank lender over the Internet. When you’re looking for quick funding options and smaller lives of credit, you can certainly go with an online lender. I secured a loan of $45,000 through online lenders at a rather favorable repayment term.

My business’s turnover is $65,000 per annum, which fits rather snugly into the requirement zone of $50,000 – $150,000. Be sure that you are within that range when you are applying for a small business loan.

FYI: before you apply for your small business loan, I recommend getting a free copy of your credit report from any of the top 3 credit reporting agencies. You can also use your credit card provider’s website to check your personal credit score.


Small Business Decisions…

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My father is the owner and sole employee of his business. He occasionally uses contracted employees for additional help when he needs it, but generally, he is the only person who can run his company.

This setup has served him for most of my lifetime. He owns businesses, runs them, and brings home a paycheck. It has never been a problem…

Until now.

There was no contingency plan in place should anything happen to my father… like a quadruple bypass.

Fortunately, my brothers know the construction business and my sister and I know his accounting system and had open schedules to jump in to help. There has been no hiccup in his business services, only a different face showing up at the jobsites. Who knew having 7 kids would pay off eventually?

For the most part, everything worked out for dad. He’s still struggling a little physically and relying on my youngest brother to get him through the day, but at least he is getting through the day.

Here’s the question for all you ‘invincible’ small business owners out there…

Do you have a contingency plan?

If not, you better figure one out!