The Fastest Way to Finance Your Small Business
From: allbusiness.com
When you need cash in a hurry, you will find plenty of lenders ready to loan you money at exorbitant rates. Unscrupulous loan brokers routinely prey on small business owners who find themselves in need of fast cash. But there are other options for getting the money you need quickly and relatively cheaply.
Pick the right type of loanThe type of loan you select will have a big impact on how quickly you get the money you need. Secured personal loans, home equity loans, and merchant accounts receivable loans can all get you cash quickly. If you have collateral, such as your home, a secured personal loan may be your best bet for your short-term cash needs. Since you are offering collateral, the lender's risk is reduced significantly, and they will be more likely to approve your loan. The reason is because the bank has protection if you default-if you can't make your payments the bank has a way to recoup their losses by selling your assets. If you own your home, a home equity loan is another option. If you go through the company that holds your mortgage, you can reduce the approval time even further. Of course, there may be significant risk involved; if your business fails, you may lose your home as well. If you can show that you have significant receivables due in the near future, you may be able to use them as collateral for your loan. Rates for accounts receivable loans are higher than most other commercial loans, but they can be useful to even out your cash flow if you have no other collateral to show.
The loan application packageAnother way to expedite the loan process and to help ensure approval is to present an attractive application package. Here are some of the components of a solid loan application package:
· Good credit history and rating
· 35 percent of combined personal and revolving credit available, including credit cards and lines of credit
· No excessive late payments, collection activity, charge-offs, judgments, tax liens, repossessions, or bankruptcies
· Strong financials that are consistent with your credit history
· Verifiable income and profit
· Sufficient assets to use as collateral.
If you meet these criteria, you most certainly will quickly attract quality lenders. Having all required paperwork ready, such as a detailed business plan and tax documents, will further speed up the process.
When you need cash in a hurry, you will find plenty of lenders ready to loan you money at exorbitant rates. Unscrupulous loan brokers routinely prey on small business owners who find themselves in need of fast cash. But there are other options for getting the money you need quickly and relatively cheaply.
Pick the right type of loanThe type of loan you select will have a big impact on how quickly you get the money you need. Secured personal loans, home equity loans, and merchant accounts receivable loans can all get you cash quickly. If you have collateral, such as your home, a secured personal loan may be your best bet for your short-term cash needs. Since you are offering collateral, the lender's risk is reduced significantly, and they will be more likely to approve your loan. The reason is because the bank has protection if you default-if you can't make your payments the bank has a way to recoup their losses by selling your assets. If you own your home, a home equity loan is another option. If you go through the company that holds your mortgage, you can reduce the approval time even further. Of course, there may be significant risk involved; if your business fails, you may lose your home as well. If you can show that you have significant receivables due in the near future, you may be able to use them as collateral for your loan. Rates for accounts receivable loans are higher than most other commercial loans, but they can be useful to even out your cash flow if you have no other collateral to show.
The loan application packageAnother way to expedite the loan process and to help ensure approval is to present an attractive application package. Here are some of the components of a solid loan application package:
· Good credit history and rating
· 35 percent of combined personal and revolving credit available, including credit cards and lines of credit
· No excessive late payments, collection activity, charge-offs, judgments, tax liens, repossessions, or bankruptcies
· Strong financials that are consistent with your credit history
· Verifiable income and profit
· Sufficient assets to use as collateral.
If you meet these criteria, you most certainly will quickly attract quality lenders. Having all required paperwork ready, such as a detailed business plan and tax documents, will further speed up the process.
1 Comments:
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