When considering a small business loan, you’ve probably hit the entrepreneurial fork in the road – you may be siting on a stellar idea that you’ve vetted through research, and you could even have a thorough business plan to boot. You’ve probably spent some time figuring out how you’ll market this idea and how the projected growth will impact your future. But there’s one issue that just can’t be overlooked – funding.
If you’ve heard from the grapevine that it is a bit difficult to get a small business loan nowadays, you would be correct. The Federal Deposit Insurance Corp reports that its data shows that lending to small businesses hasn’t bounced back from pre-recession levels yet. In fact, loans to small businesses have dropped 22% since 2007.
Since funding is often the core need to begin any business venture, learning more about how to secure financing and what is involved will be helpful as you find the options that are best for your needs.
Take a look at our overview below to learn more about the basics in small business loans.
What are some of the requirements for a small business loan?
You’ll find a bit of a variance in what lending institutions or banks require, but typically you’ll see a common theme including the following:
Your business size and the nature of your business will be considered. Generally, businesses that...
If you’re a business owner who has come into a situation where you need cash fast to cover business related expenses, a merchant cash advance (MCA) may be an option to consider. However, you will need to make sure that you find the right company you can trust, and understand all of the details before making your final decision.
Whether you have recently found an opportunity to grow or improve your company or you are dealing with a disaster of epic proportions—you need to find a solution to your cash flow issue. If you have tried to get a small business loan with no luck because of bad credit, a merchant cash advance could solve this issue as well.
How does a merchant cash advance work?
With a merchant cash advance option, your business will receive a lump sum of cash. Because you won’t face all the paperwork you would with a traditional business loan, you can expect faster payment—potentially in within a week, or even just a few days. This quick turnaround time is a huge benefit for the time-sensitive cash flow issue that businesses face.
To repay the cash advance for the lump sum, you’ll exchange a portion of your future sales. Many businesses that primarily process credit card payments get the most benefit out of this situation—especially if the business has little collateral or bad credit to start with.
It’s important to remember that a merchant...
