What’s holding you back? Are you wanting to expand your business and take things to the next level?
Even though there are many alternative loan options available now that are becoming much more mainstream, the majority of small business owners still believe the only way to improve or expand their company is through a conventional bank loan. So they just keep plugging along waiting to save the money and delay the dreaded loan process.
Why consider alternative lending options?
Banks tend to have much more stringent underwriting guidelines for small business loans. They also prefer to only loan to companies of a considerable size and prefer to lend significant amounts to big business. SBA loans have specific guidelines for qualifying for a loan. Strict guidelines are generally in place for the minimum amount of time you have been in business, maximum loan amount, and even what you can spend the money on.
Not only are these (traditional bank) loans hard to get but the paper trail required is exhausting and often a huge deterrent for businesses who think they might want to grow. Eighty percent of business loans get turned down and 4 out 5 never even come to fruition solely because the paper chase required is so intensive that most business owners just don’t follow through.
When you spend the majority of your time running your company and trying to follow through on this great new idea you have for taking it to the next level the last thing you need is a big, time consuming headache taking the wind out of your sails.
Reasons to take out a business loan now.
Equipment upgrades. When that new fangled, super efficient shiny piece of machine mastery is the only way to improve your processes. Imagine you are the most popular artisan ice cream shop in the town of Long Beach, Ca., which just so happens to be the biggest ice cream eating city in the U.S. You are aware that Thai rolled ice cream is sweeping the nation. Patrons have no problem waiting more than 5 or so minutes and paying upwards of $8 for a custom made scoop, er roll, of Thai rolled ice cream. If you’re going to remain the most popular ice cream shop in the city you are going to have to install the machine with the freezing metal plate that can chill down from 0 to -31 degrees Fahrenheit and start rolling ice cream. You can’t afford not too!
Never mind the silly example, while this particular piece of equipment isn’t overly expensive many business owners can’t afford to buy outright the newest piece of equipment they need to expand their business or just keep up with times.
Beef up your inventory. Many businesses are seasonal in nature and require a much greater amount of inventory during the time of year when business is booming and then will tend to scale back during their slow season. When it’s time to beef up the inventory following a season where sales have been slow there may not be the extra capital to buy extra stock.
Plan now for future significant expansion. A lot of business owners have the idea that it’s best to wait till they are ready to do everything at once and expand on a large scale. They want to execute a large expansion, buy more equipment or even open a second location, so they take out a large loan and do it all at once. But, this isn’t always the best plan. A smaller improvement with a comparable loan to go with it can give you the opportunity to expand your business while still making sure you stay profitable. This is also the best way to build credit and creditworthiness for a bigger project in the future.
As you are making good on your loan you are also developing a relationship with the lender. Will this lender be more apt to make a much larger loan to you on the next occasion once they have already had a positive experience with you in the past? It’s very likely.
Traditional bank loans will generally only loan a portion of the amount you need to purchase a piece of equipment. For example, if the machine you would like to purchase for your business costs $100,000 you will not be able to borrow $100k from the bank to purchase it. They would expect to loan you a percentage of what you need, say 70% of the value of the collateral, while you come up with the difference.
When you choose a merchant cash advance you won’t have to justify what you would like to spend the money on. Obviously we’re hoping you are bettering your business and you’re not taking a trip to Hawaii, but you won’t have to actually justify it. You decide what you need. You may be able to borrow anywhere from 1 to 5 times your monthly volume. Because the amount that you can be loaned is based on your average monthly volume and not the price of the item you are trying to purchase you just have to make sure that your business can support the amount of money you need.
When you do need to take out a short term loan, as in the example of needing to fortify your stock for the season, it can be an incredibly costly way to make that happen. A merchant cash advance is a considerably more economic way to boost your inventory without killing your bottom line. With this type of financing a merchant will pay back the loan as a percentage of their monthly volume. That means when you are busy and sales are skyrocketing your payments will be higher and when sales slow down you are not stuck with that unrealistic debt payment you’re not making enough money to cover. It protects your assets and your credit.
Acceptance and funded within 24-72 hours! Yes, you heard that correctly! Unlike traditional bank loans that can take forever and multiple months of tax returns and credit checks to even get approved let alone funded, our merchant cash advances can have you in the money and focusing on your sales in no time at all.
When to take out a business loan.
It’s important to make sure that you will be able to afford your expansion and still turn a profit. Whenever you are considering a business loan of any kind take your existing balance sheet and use tools such as revenue forecasting to see what type of effect the loan will have on your bottom line.
We take the apprehension out of deciding to get a loan for your business dreams and the headache out of following through with your plans. Our ETA-Certified payment professionals are not only trained in the intricacies of the payment processing industry they know and care about how to help you become the most successful business owner that you can be. Your success is our success.
Call today to for more information about how you can realize your full potential with an easy business loan.