Many small and medium sized retailers have found themselves in a difficult squeeze of circumstances when it comes to finding a working capital loan to fund expansion, purchase advertising, or merely continue funding day to day operations and payroll.
According to the SBA (Small Business Administration), small businesses in need of capital can always go directly to the agency, or apply for a loan through one of the major banks that the agency guarantees loans with. An SBA backed loan is tailored for small business and will usually feature the most advantageous rates and terms. However, a business owner needs to remember that this type of loan is not a quick solution, as the process of underwriting and securing funds can often take longer than 3 months. Approvals in this restricted credit environment are also hard to come by and usually reserved for the most credit worthy businesses
Businesses that have made an investment in large amounts of physical assets such as office furniture, computers, or industrial equipment may be able to get a secured loan using these assets as collateral. Because the loan is secured, credit of the business and/or owner may not be as much of a factor as it would've been with an SBA type of loan.
Typically, these types of loans are structured for longer terms, similar to an auto loan of 3, 5 or 7 years. Interest rates can also vary widely depending on the business, type of equipment the loan is secured against, and other factors. This type of loan also means the lender can take the equipment if the business defaults on the loan or is liquidated prior to full repayment. Contact a business loan broker to access this type of funding.
For a business, especially retailers, that accept credit cards and have been unable to obtain financing through a traditional bank, a credit card receivable loan may be an answer. These loans are based off the businesses historical credit card receipts and are similar to a merchant cash advance. While the interest rates are not as low as an SBA type loan, that rates overall are generally 50-80% less than a merchant cash advance with no additional requirements to switch credit card processors or buy equipment. There are also no upfront fees or points, and businesses with owner credit as low as 550 can be approved.
Businesses need to examine every avenue available to them in this historically bad economy when searching for a working capital loan. The above recommendations give at least a few different options that are out there for various business situations. If you are a retailer who needs a business loan and has a situation that couldn't get approved by a bank, click here for more information.
According to the SBA (Small Business Administration), small businesses in need of capital can always go directly to the agency, or apply for a loan through one of the major banks that the agency guarantees loans with. An SBA backed loan is tailored for small business and will usually feature the most advantageous rates and terms. However, a business owner needs to remember that this type of loan is not a quick solution, as the process of underwriting and securing funds can often take longer than 3 months. Approvals in this restricted credit environment are also hard to come by and usually reserved for the most credit worthy businesses
Businesses that have made an investment in large amounts of physical assets such as office furniture, computers, or industrial equipment may be able to get a secured loan using these assets as collateral. Because the loan is secured, credit of the business and/or owner may not be as much of a factor as it would've been with an SBA type of loan.
Typically, these types of loans are structured for longer terms, similar to an auto loan of 3, 5 or 7 years. Interest rates can also vary widely depending on the business, type of equipment the loan is secured against, and other factors. This type of loan also means the lender can take the equipment if the business defaults on the loan or is liquidated prior to full repayment. Contact a business loan broker to access this type of funding.
For a business, especially retailers, that accept credit cards and have been unable to obtain financing through a traditional bank, a credit card receivable loan may be an answer. These loans are based off the businesses historical credit card receipts and are similar to a merchant cash advance. While the interest rates are not as low as an SBA type loan, that rates overall are generally 50-80% less than a merchant cash advance with no additional requirements to switch credit card processors or buy equipment. There are also no upfront fees or points, and businesses with owner credit as low as 550 can be approved.
Businesses need to examine every avenue available to them in this historically bad economy when searching for a working capital loan. The above recommendations give at least a few different options that are out there for various business situations. If you are a retailer who needs a business loan and has a situation that couldn't get approved by a bank, click here for more information.
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