In today’s economy getting small business loans is not an easy task for small businesses. Many financial institutions and banks have rigid and complicated financial procedures together with tough provisions to apply for a small business loan. Even after fulfilling every criterion, approval isn’t guaranteed.
Small business loans funding from Small Business Administration (SBA) can’t satisfy the needs of all small businesses. Though the credit amount available for small businesses increases by 25%, it still not that simple to avail the business loans.
To overcome this funding hassle, small businesses should create a viable business plan that catches the lenders eyes. To justify the loan, they must show how they will utilize the funding and for what business purpose. Some financial experts have said that lenders have some unique points on which basis they examine the loan applications, so a business must consider those key points and mold their submitted business plan accordingly.
The loan applicants should also set up a long lasting relationship with the lenders to increase their chances of getting a loan as banks offer easy funding to those whom they trusted long term. The question is just how can a new small business set up a beneficial long lasting relationship with banks in time to fulfill their existing funding requirements?
Apart from long lasting relationship, lenders also require an excellent credit history score from small business loan applicants. They require a small business deemed to be credit worthy before considering their loan application. Once more, small businesses being new are still at disadvantage here. The question arises as to how small businesses can set up good credit score in time?
The US Congress has put Congressional limitations on eligibility for Small Business Administration loans. Every small business has to prove that they are in business for at least two years and is both struggling and worthwhile. They should not only provide their last two years positive cash flow statements but also explain that they are experiencing “immediate financial hardship” with a reduced income that shouldn’t be less than 20 percent. As well, they must send the projections intended for cash flow for upcoming two years, showing that they are able to repay the loan installments.
The Quicker Way to Acquire Small Business Loans
The quicker way to get a small business loan would be with credit card services. It enables a business to take consumer payments intended for products and services by way of credit cards or debit cards, whether over a counter, with the phone or online. Receiving payments through credit card enormously enrich small business earnings potential. Moreover, credit card services provide the same alternative as small business loans without the hassle of collateral or personal guarantee. Small business loan amount is computed from the average monthly earnings from credit card payments. The loan is repaid by means of computerized monthly withdrawals of a certain proportion from your business’ future credit card income. Therefore small businesses can automatically get eligible for small business loans by means of credit card services, and can absolutely have the ability to pay out such loan amounts.