What To Know About Small Business Loans

What To Know About Small Business Loans

A business project usually requires funding to be successful. If your company is fairly new or not yet profitable, you may not have the necessary money available. In this case, you should consider a loan, such as an SBA loan from the Small Business Administration. Read on to learn more information on small business loans.

Finding Small Business Loans

Several types of organizations offer loans to small businesses. Banks can provide a lot of money and typically allow you to repay the loan over an extended period of time.

Applying for a bank loan can be tough, though. You have to fill out a lot of paperwork and put down large collateral. It could also take you months to find out if you were approved.

Credit unions in your area may also have small business loans available. These loans are usually more competitive and offer lower interest rates compared to bank loans. However, credit unions typically only lend money to businesses that are already established. You may also have to become a member of the credit union to get a loan.

If you do not want to deal with a bank or credit union directly, you can apply for an SBA loan. This type of loan includes government backing, so the lender will get some of its money back even if you default. SBA loans are thus great options for those with poor credit.

Getting Approved

While the SBA can help businesses with low credit scores get loans, you should try to improve your credit before applying for any loan. Increasing your credit score will improve your chances of success. You should also develop a strong business plan that shows the lender why it should give money to your company.

Picking the Best Loan for You

Once you have narrowed down your options, you have to decide which small business loan is best. Whether you opt for a big bank or a credit union, you should choose a lender with a good reputation and a fast response. Look for a lender that is transparent about the fees and terms associated with its loans.

A small business loan can help you secure the funding you need for your next project. If you improve your credit score and demonstrate a solid business plan, you will increase your odds of getting one of these loans. If you have trouble getting funding from a credit union or bank, you can also apply for an SBA loan. Just be sure to evaluate your options before agreeing to a loan.

How You Should Consider Approaching Alternative Lending Options

How You Should Consider Approaching Alternative Lending Options

Running a small business means knowing how to plan in advance for problems. One way that you can achieve this is by taking time to think about your access to working capital. While it might be fine in the moment, a sudden emergency or surprise setback can lead you to difficult places with your cash flow. By thinking ahead and creating a plan for alternative lending, you will have an easier time getting back on your feet. Use these tips to build the foundation of your own borrowing strategy. 

The First Route

In many cases, the best choice for a business owner to pursue when he or she is in need of funding is a traditional loan. This means financing that is obtained through a larger lending institution like a bank or credit union. Typically, this is a great first choice because it is the easiest and most straightforward option. However, it might not always be the best fit. For borrowers with bad credit or without time to wait for the approval process. It may be a better choice to pursue other areas.

The Second Step

Alternative lending is an umbrella term that refers to a plethora of services. The key to finding the right fit for your needs taking time to look over the specific parameters of your dilemma. For example, you might be in need of equipment for your business. In this scenario, you might find it most useful to pursue alternative services like equipment financing solutions. This allows you the ability to cover the costs of the investment without immediately depleting your available capital. No matter the problem, there’s a service structured for your needs.

The Final Destination

You don’t need to be dealing with a specific issue in order to take advantage of financing services. If you’re looking to the future to plan out your growth strategy, then financing should definitely be a part of the equation. Opening a credit line can be a fantastic way to pursue alternative services without having to use the funds immediately. Plus, the credit line provides you with an easy and effective way of building your score so that you are more appealing to desirable lenders like those that offer SBA services. 

Whether you’re looking to grow your brand or find funds to cover a pressing problem, alternative lending can be a useful solution to consider. Take time to review the basics of this area of borrowing and see how you can get started.

How To Use Factoring for Your Small Business

How To Use Factoring for Your Small Business

Many small businesses have trouble with cash flow sometimes. This isn’t something you should feel bad about, but you do need to find a solution. Cash flow issues affect business growth. Poor cash flow can also affect your credit score if it gets in the way of paying bills on time. Invoice factoring may be the solution you’ve been waiting for.

What Is Factoring and How Does It Work?

Factoring is also known as invoice financing or accounts receivable financing. As those names suggest, this type of financing involves your business’s invoices. A lender provides capital for outstanding invoices right away in exchange for a small percentage of the total value. In essence, you’re selling an unpaid invoice to a third-party lender. You get paid immediately and the lender makes a small fee.

Generally speaking, the process works by allowing you to select which invoices you want to factor. You can get a large percentage of the balance within 24 hours, and the rest is deposited in your account when your client makes payment on the invoice.

This type of financing isn’t technically a loan because you’re not borrowing money. You’re selling an asset. That means that you don’t have to make any monthly payments afterward. You get the funds you need, right when you need them.

What Are the Benefits of Factoring?

There are several reasons why this method of alternative financing is popular. First, as mentioned, there are no debts to worry about. Invoice financing doesn’t hurt your credit score. You can sleep easy at night knowing that your business is safe and there is no collateral at risk.

Speed is another benefit. The simplicity of invoice financing means you can get funds in hours instead of days or weeks. When emergency needs pop up, it’s a relief to be able to get working capital so quickly. You can keep your business running smoothly until problems work themselves out.

What Are the Downsides of Invoice Financing?

Invoice financing is best used for short-term purposes only, such as purchasing inventory, buying computer equipment, covering payroll or similar things. Companies that are struggling to make ends meet shouldn’t expect solutions from factoring because it only advances you funds from your own invoices, not lends you fresh capital.

Fortunately, factoring is easy to qualify for. Getting approved doesn’t depend on your credit score or time in business. As long as you have the invoices you need and your customers are trustworthy, you can generally receive financing quickly.

Factors You Need to Remember When Redesigning Your Website

Websites are some of the first impressions that many companies have with their clientele. A well-designed and organized website has the power to improve the relationship between a customer and company; however, this can also work the other way. If you want to ensure that your web presence is in tip-top shape for your upcoming website redesign, here are a few factors you cannot forget.

Organization of Your Site

The page structure itself requires a great deal of attention. If you alter or upset the structure of your website, you can lose your relevance and ranking. Whether you are improving your links and content or improving the architecture of your site, you need to ensure that it is running optimally.

Avoid Broken Links

A broken link is one of the easiest mistakes to make during the reconstruction process. You need to make sure that all of your links work to avoid frustration on your audience’s end.

Fix 404 Server Responses

If you come across a 404 response in your website after your website redesign, you need to go back and fix it. While this may appear to be an error, it can often be indicative of a larger issue that will require further attention.

Remove Pages Without Sufficient Content

Having a web page just to have another page on your site is bound to reduce its impact and usability. If your page is thin and has little to offer in terms of content, consider cutting it. Focus your attention on building more robust web pages so that your website operates more effectively.

Avoid Duplications

While offering duplicated information on your website is not a major issue, it can become confusing for users to navigate. While search engines can typically parse out the best result, if you want your page functioning optimally, you need to avoid duplicate information.

Test in Safe Spaces

When you are considering a redesign of your site, it is always better to duplicate your site as a staging area. By adding password protection and a search engine block, you can use this as your sandbox to test out any changes. This can help you build a more robust and refined website.

Always Run Tests and Diagnostics

Whenever you are updating content on your website, you need to make sure that it is in tip-top shape. Consistent testing and diagnostics can help you avoid issues in your web design that can affect your bottom line.

While a website redesign can improve your web presence, this process can be riddled with issues if you aren’t careful. If you want your website to function optimally and provide the return on investment that you want, make sure you follow these tips.

How To Improve the Number of Female- and Minority-Owned Businesses

How To Improve the Number of Female- and Minority-Owned Businesses

You may have heard some people refer to themselves as “born entrepreneurs.” Yet the idea that some heritable traits are associated with entrepreneurship remains unproven. The business world’s reliance on this concept of “born entrepreneurs” may also prevent a venture capitalist from investing in a minority-owned business.

What Makes a Good Entrepreneur?

Over the past few decades, researchers have attempted to find examples of heritable traits that increase the chances of entrepreneurial success. However, these correlations are fairly small. The relationship between genetics and positive entrepreneurial outcomes is akin to the (minimal) link between heart attack risk and index finger length.

There are some learned skills and personal motivations that make you more likely to do well as a business owner. That is why many venture capitalists ask to see resumes before investing in a new company.

Unfortunately, venture capitalists are also biased toward the “born entrepreneur” theory. This may indirectly be contributing to the lack of companies owned by women and people of color. A recent study found that fields in which practitioners believe innate talent is necessary for success have lower percentages of women and minorities.

Even if a venture capitalist says that he wants to invest in a minority-owned business, his actions often say otherwise. A VC may ask different questions to male and female entrepreneurs, or he may value certain traits that are uncommon in women.

As a result, venture capitalists disproportionately invest in businesses run by people who look like them. Most VCs also include white men on their investment teams. One study found that women, in particular, make up only 11 percent of the partners on these teams.

Why Should VCs Invest in Minorities and Women?

Yet with proper backing from venture capitalists, small businesses owned by women and minorities can earn plenty of money. Evidence shows that female-run companies have lower risk profiles compared to male-run companies, and women-owned businesses achieve financial success equal to that of businesses operated by men. Minority-run businesses, meanwhile, can tap into huge markets ignored by some of the more traditional companies.

A female- or minority-owned business can be successful if a VC gives it the chance to succeed. Unfortunately, the inherent biases of venture capitalists, along with their belief in “born entrepreneurs,” often lead VCs to invest in company owners who look like them. To boost the diversity of the business world, VCs need to put these preconceived notions aside and back female and minority entrepreneurs.