Archive June 2019

The process of applying for a business loan can seem just about as daunting as, well, applying to college or cooking a seven-course gourmet dinner. However, as with many other aspects of life that can become more overwhelming than they need to be, finding a lender for a small business loan on Working-Capital.com is actually pretty easy. Just take a deep breath, follow these very manageable steps and you will get the funds you need before you know it.

DETERMINE HOW YOU WILL USE THE LOAN

It probably goes without saying, but you must understand why you need this, exactly how much you require and what ways you will be using the money before you can apply for the loan on Working-Capital.com. The reasons that many entrepreneurs seek loans include but are not limited to the following:

• Launching a new business;

• Buying an existing business or franchise;

• Obtaining day-to-day working capital

• Expanding the business;

• Dealing with emergencies;

• Purchasing equipment or inventory;

• Financing debt.

Next, figure out the minimum you can borrow to meet these needs. This requires that you have thorough knowledge of all of your debts, revenue and expenses.

REVIEW YOUR LOAN OPTIONS

Since companies come in all sizes and have a wide variety of needs, it stands to reason that there are several types of business loans that have been tailored to meet each and every one. These include the following:

• Bank loans with usually lower fixed payments over a set time period, more complex application process and weeks or even months before you can access your cash;

• SBA loans from federally-sponsored lenders with complex application process but often flexible on how you can use your cash;

• Medium-term loans with terms of one to five years with higher rates than bank or SBA loans but often more practical;

• Short-term loans with repayment usually less than two years, high APRs but very convenient and often same-day approval;

• Business lines of credit in which you only pay interest on the amount of your credit line that you actually use;

• Equipment financing;

• Invoice financing based on receiving cash from your outstanding invoices now;

• Merchant cash advances based on your future credit card sales and have very high associated costs.

As you peruse your various loan options, keep an eye out for surprise fees, and only consider lenders that have been accredited in the United States.

COLLECT YOUR DOCUMENTS

Whether you apply to a bank or to a nontraditional lender, you should have your financial house in order. Even if lenders do not request every piece of information, have the following organized and available:

• Up-to-date credit score;

• Profit and loss statement

• Annual revenue;

• Time in business;

Balance sheet;

• Federal and state tax returns;

• Average bank balance.

Once you have collected all of this paperwork, you can move forward.

APPLY FOR THE LOAN

Now that you have laid all of the preliminary groundwork, it’s time to actually apply. Resist the impulse to try for several loans at the same time since each lender’s search into your credit accounts will cause your score to temporarily dip a few points. Once the lender approves your application, it will enter the underwriting stage in which your documents will be checked. If you pass, the lender will give you an agreement to sign. Read through it line by line, asking any questions and scrutinizing the verbiage for any hidden fees.

If, after reading the document, you believe that you can make timely payments and you have … Read the rest