Financing a business- regardless of its size is always a major issue. Without reliable financing, even the most promising business ideas can end up in failure. Thankfully, business owners can turn to banks and lending companies for business funding assistance. Here, let’s discuss some of the available options you have and how to find the right business loan lender:
Business Loan Options That You Can Choose
Business loans can either be a secured loan or an unsecured loan, depending on its requirements. For a secured business loan, you need some sort of collateral to help secure the loan. Business owners who are homeowners with equity in their homes have access to a wide variety of lenders. Lets face the facts, startup business financing is considered high risk. So when you have some sort of collateral to help secure the loan, the banks feel have home properties to submit often prefer secured loans to enjoy lower rates and longer repayment terms.
A non-secured business loan on the other hand doesn’t require any collateral. Unsecured loans are generally reserved for people with good to excellent credit. A company with bad credit that is seeking an unsecured loan should be ready to do a lot of research into potential financial sources. Back in 2008 it was rather easy to get unsecured financing even if you didn’t have the best credit, but after the financial crash unsecured business financing for bad credit has become almost nonexistent.
Finding a Business Loan Lender
With so many lending companies to choose from, finding one who is willing to approve your application shouldn’t be difficult. Nevertheless, even though all lenders may seem to offer great deals, a business owner should take time comparing choices.
For those with a low credit score, getting approved can be more difficult. To avoid delays, it’s best to check your credit report to make sure that any negative issues on your report have been fixed. If you can not fix the issues be prepared to explain your credit problems to your lender. Be up front about it. As soon as they pull your credit they will see whatever you are trying to hide!
A Business Plan – Don’t walk into a bank or financial institution without a business plan. You may think that you can verbally tell your loan manager about your business, but do you honestly think he should take notes just because you came to his office unprepared? Nothing sets off alarm bells faster than a new business owner showing up with no business plan. A definite business plan is important to show the lender that you have fully thought out your potential business. It should highlight all the reasons why your venture will be successful.
Repayment – Having a repayment plan is crucial to avoid bad credit or bad debt. Have you thought about what you will do to ensure that you can stay consistent with your monthly business loan payments? Have you created a back-up repayment plan in case unexpected circumstances arise or obstacles keep you from enjoying profits?
Irish Taylor is a business loan consultant with Startup Business Loans and has been providing consumers and business owners with startup business financing since 1992. For years she has helped people with credit and loan problems especially pertaining to business start up, SBA loans and Unsecured loans.