How to Choose Between a Small Business Loan and a Merchant Cash Advance?

Running a small business is something that requires constant attention. A business owner needs to juggle different roles one of which is financial controller because without finances a budding business will fail. That being said finances are needed for things like restocking the inventory, purchasing updated equipment, repairing, upgrading and paying staff. But there are times when you will find yourself low on capital and in situations such as these how do you find the money to keep your business alive? As a business owner you have a number of financing options at your disposal, so much so that it is probably hard to decide which of these offers are best for business. Below we look at two of the biggest types of financing and how they work.

Small business financing

You can usually get small business financing from a bank and this is the first step that most businesses take when they need money. Small business owners are required to submit an application to the bank after which the bank will examine a number of factors which include their business history, credit history and the collateral they can put up. If you are approved for the loan you will receive the lump sum amount you applied for accompanied in most cases by a fixed repayment installment which needs to be paid on time or you will incur penalties. The process of getting business financing can take weeks if not months.

This type of business financing is usually best for businesses that have predictable monthly sales. The business owner should also have the ability to put up collateral and have a strong credit history. You also shouldn’t be in a hurry to get the loan because if you are then this is probably not the best option.

Vendor Financing

Vendor financing allows business owners to get up to around $150,000 if they are an accredited distributor, vendor, manufacturer or a reseller of equipment. Unlike a regular business loan this is based a lot on your own personal history as well as your business history but you do not need to have perfect credit to avail this type of financing. This loan does not require extensive paperwork or a list of your clients. All you need to do is to show proof that you are an accredited vendor, and your credit history. That being said many companies reserve the right to ask for more documentation to ensure that they know everything about your business prior to approving the loan.

Vendor financing is great for small businesses whose business varies each month and for business owners who do not have perfect credit and zero collateral to put forward. The money can be used to increase inventory and venture into new markets. However, these types of loans have a higher than usual interest rate associated with them primarily because they are unsecured loans.

5 Reasons Why Your Website Is Important to Financing Your Small Business

Today’s small business owners have so much to do when engaging their customers. Staying hyper-focused on bringing in new customers is important. It is also important when courting a financing source, whether traditional or nontraditional. When you are in need of financing, especially if you are a start-up or small business owner, your financing source will become a vital part of your business. What a lender requires is just as important as the needs of your customers. You want customers to buy your products or services, or both. You also need the lender to finance the survival or future growth of your business.

Here are five (5) important reasons to have a website:

1. Online Presence - Having an online presence gives potential lenders or investors and customers immediate access to your business. They also have the opportunity to see how you present your business in the marketplace. It is important for them to read pertinent information that enables them to make decisions that will benefit them firsthand. This information will help them determine how you view your products and/or services, and how you value your customers or anyone else who interacts with you.

2. Tells Your Story - Your website provides the information others need to make a decision regarding purchasing your products and/or services or financing your business. Your “About Us or About Me” page can be a deciding factor as to whether or not someone wants to do business with you. This page should give some professional background on you and your team, as well as the history of your business. This vital information will make your customers and potential lenders feel more confident about doing business with you. Please bear in mind that having a website is not, and never will be, the sole deciding factor in whether or not you receive the financing you need. It is a lot more intricate than that.

3. Business Awareness – Being on the internet makes it easy for potential customers and lenders to learn about you. They can research your products and/or services without having to call you or meet you in person. Having a clear description of your business and how you operate is a necessary part of making your website both user-friendly and content rich.

4. Contact Options – Lenders and customers must have a way to contact you. When they have various ways of contacting you, it makes them feel more secure about doing business with you. Remember, the web site is not for you, although it is about you and your business. It is for those individuals who prefer to visit your web site prior to contacting you, or even for those who might just want to send you feedback about your products and/or services. You never know, they might have a customer referral for you during the hours your business is closed and want to get information over to you as soon as possible. Do not hesitate to make it easier for people to contact you online.

5. Levels the Playing Field – In today’s internet-savvy world, billions of people are online daily, and most businesses have a website. You might think your start-up or small business does not need one. You might want to check what your competitors are doing. Most likely, they will have a website. Potential lenders will look at your competitors’ websites to help them understand your industry, and to determine what makes your business different or better than your competitors.

If your internet presence needs improvement, start working on it now. If you had a website, but it is no longer up and running, get it back on track. I am not suggesting that having a web site will make you a ton of money or get you the financing you need, but it levels the playing field for you when others are conducting research prior to doing business with you. I am sure you would not want your competitors to be the only ones getting this type of online exposure. Having a online web presence is definitely an advantage in the competitive world of business today.

Tips For Setting Up Your Small Business

If you have been itching to start your own small business but not sure where to start, business ideas and opportunities are everywhere to be found. Identifying good opportunities is often as easy as identifying problems many people share and finding a solution for those problems.

Anyone can own and run a successful small business; you do not need to have an MBA to turn your business opportunity into profits. You just need capital for investment, a good solid team and reliable small business software. To run your business smoothly and efficiently you need effective business software as they help automate and simplify many office and management tasks related to accounting, management, scheduling and database etc.

To setup your small business finance, various types of loans are available. If you want to start a business and require relatively low capital, then a small business loan is the best option for you.

Two forms of small business loans are available:

* Secured small business loan: This kind of loan is ideal if you have home or property to place as collateral. Interest rates are comparatively low.

* Unsecured small business loan: If you do not have a house of your own or you do not want to put your property up as collateral, you can opt for this kind of loan. Rates are generally higher.

Approval of your loan depends upon several factors, such as the purpose of the loan, your credit history, your business plan and the collateral placed. Normally, you can get a loan ranging from $5,000 to $100,000. The repayment period for these loans range from 5 to 20 years. The lender takes all these variables into consideration when calculating the interest rate, loan amount, and the amount for monthly installments.

With a business loan you can raise money for business opportunities with flexible repayment options. You can even use this money as an effective tool for debt consolidation at tax-free interest rate.

The loan procedure involves a lot of paper work that tends to get quite chaotic and confusing. An alternative to this is to apply for a loan online with reputable firms. You will only need to fill out an online application form and the lender will get back to you with the best possible deal for your case.

You can go a long way expanding and growing your business if you make smart use of your business loan.