For small business owners, one of the most difficult things they deal with is the lack of capital and the limited access they have in getting capital from formal lenders.
One if the reasons why small business owners have a difficult time in gaining access to business loans is because most lenders consider small businesses as high risk borrowers because of the unstable income profile that most small businesses have.
In addition to this, the experience of most lenders in lending to small business owners has shown that small businesses generally have a hard time paying for business loans.
However, small business owners need not content themselves with getting loans from unscrupulous lenders, as there are now some lenders who are willing to take the risk in lending to small businesses.
Cash advances for businesses Some lenders have devised ways by which they can lend to small businesses.
Usually, the lending schemes that these lenders offer consist of loan products that allow businesses to get a cash advance.
However, instead of a paycheck, the loans are usually tied to purchase orders, post dated check payments and other account receivables that the business would collect in the future.
In other words, these lending schemes make it possible for businesses to draw from their income ahead of time to help them finance their current operations, to buy raw materials, or to finance their expansion.
However, these loans usually come with some very stiff requirements.
One of these is the requirement of some lenders for small businesses to prove their profitability for the last three years.
In addition to this, some lenders also require that small businesses provide them with additional collateral.
The credit history of the business is also a major consideration, as some lenders require a minimum credit score for businesses to qualify for a loan.
Lastly and more importantly, some lenders also charge a higher interest rate on the loans they provide small businesses.
Small businesses have always had difficulty in accessing the formal lending sector because of the unstable income profile of these businesses.
However, small businesses are now being provided access to business loans in the form of cash advances, which has made it possible for businesses to gain access to cash they need for various purposes.
But as with any loan given to small businesses, there are some stringent criteria that businesses need to meet before they qualify for these loans.
One if the reasons why small business owners have a difficult time in gaining access to business loans is because most lenders consider small businesses as high risk borrowers because of the unstable income profile that most small businesses have.
In addition to this, the experience of most lenders in lending to small business owners has shown that small businesses generally have a hard time paying for business loans.
However, small business owners need not content themselves with getting loans from unscrupulous lenders, as there are now some lenders who are willing to take the risk in lending to small businesses.
Cash advances for businesses Some lenders have devised ways by which they can lend to small businesses.
Usually, the lending schemes that these lenders offer consist of loan products that allow businesses to get a cash advance.
However, instead of a paycheck, the loans are usually tied to purchase orders, post dated check payments and other account receivables that the business would collect in the future.
In other words, these lending schemes make it possible for businesses to draw from their income ahead of time to help them finance their current operations, to buy raw materials, or to finance their expansion.
However, these loans usually come with some very stiff requirements.
One of these is the requirement of some lenders for small businesses to prove their profitability for the last three years.
In addition to this, some lenders also require that small businesses provide them with additional collateral.
The credit history of the business is also a major consideration, as some lenders require a minimum credit score for businesses to qualify for a loan.
Lastly and more importantly, some lenders also charge a higher interest rate on the loans they provide small businesses.
Small businesses have always had difficulty in accessing the formal lending sector because of the unstable income profile of these businesses.
However, small businesses are now being provided access to business loans in the form of cash advances, which has made it possible for businesses to gain access to cash they need for various purposes.
But as with any loan given to small businesses, there are some stringent criteria that businesses need to meet before they qualify for these loans.
SHARE
