Now that you’ve begun the initial process of your new entrepreneurial dream, what is your next step? Well, all things being equal, getting a small business loan for your unquenchable dream. It’s at this point that business owners receive one of the rudest awakenings they can have: the chances of their bank giving them a loan are almost nil.
In our article below, we’ll be giving you several unpleasant truths you’ll need to know before you can get funding for your enterprise or project. Some are startling and others, well, they are par for the course, so to speak. They include:
The one advantage to having your bank fund your business.
To whom does a bank lend money?
How complicated is the loan application process?
What collateral may be needed?
What other disadvantages are there?
What are your options?
1. The One Advantage To Having Your Bank Fund Your Business
Almost everyone is acquainted with their local savings institution. They frequented it and used its banking features countless number of times; moreover, its naturally thought of as the “first responder” for all of their financial needs. Unfortunately, nothing can be further from the truth.
We’ll start by saying that there’s only really one advantage to getting a business loan from your bank: the bank will not be an owner of your business nor involve itself in your business decisions.
Moreover, once the owner of the business pays off his loan in a timely manner, no more interaction with the bank is needed unless the owner secures additional funding from the bank.
2. To Whom Does A Bank Lend Money
In general, banks rarely fund new start-ups. Only established businesses that have a proven track record, substantial collateral, a good credit rating and a previous running record with that particular bank are considered for small business loans.
Taking it even further, the business must also clearly show an ability to repay loans, cover losses in case of a default and further agree to pay much of the costs itself.
3. How Complicated Is The Loan Application Process
A long list of prerequisites makes the process lengthy, cumbersome and mostly unnecessary. Get ready to sit back, and have a long wait.
4. What Collateral May Be Needed
Collateral in the form of valuable real estate holdings, personal assets such as automobiles and personal guarantees or notes is needed to qualify. In most instances, an entrepreneur’s residence is safe from seizure by a bank.
5. What Other Disadvantages Are There?
Even when a bank miraculously does provide a small business loan for a business, it may not necessarily be the entire amount requested by the business owner. Typically, loans are granted that amount to a mere 70 or 80 percent of the original loan amount requested. That creates even more hardships for business owners who’ll have to scout around looking for additional funds needed for their business.
Moreover, while interest rates are typically lower than other funding sources, the banks generally offset those low rates with other additional fees and higher charges.
6. What Are Your Options?
Well, you can always secure personal loans from your family, friends or get an increased credit line. Angel investors and capital investment ventures are other viable options. Some have even done it via their credit cards. In fact, any mortgage, personal loan and/or a commercial card account can beat any bank with innovating methods to finance your business.
However, at reputable, qualified financial firms, such as the Advance Funds Network (AFN), you’ll find industry leaders willing to work with you to secure the best funding sources with myriads of funding options.
No upfront fees are ever charged; the Advance Funds Network believes in transparent policies all the way. Approval-driven, you’ll be offered several customized programs including business credit lines and merchant cash advances. That said, everything is carried out in a quick, timely manner.
With a mere three months in business minimum, $100,000 in annual revenue during the last year and no minimum FICO score threshold required, you’ll find these kinds of companies are willing and capable of securing funding you can boast about. Please call toll free now for more information at: 844-482-1939, email: [email protected] or simply fill out our convenient online form.