The year 2020 brought dramatic blows for small business owners. Capital One’s recent survey has revealed that 67% are confident that this year their businesses will get back to their pre-pandemic operations and the revenue this year. Small-business loans gained much higher importance for entrepreneurs. Let’s discuss different financing options for small businesses below.
Applying for Small-Business Loans
As of 2020, the number of 31.7 million small- and medium-sized businesses in the U.S. This makes up 99.9% of all businesses in the country. Last year, the credit growth was 14% higher. At the end of 2020, the number of loans given to SMEs reached 9 million, thus accounting for $750 billion.
When applying for additional working capital, remember that the potential lender will take into account your cash flow, credit, and collateral.
If you have positive cash flow, you become reliable in the eyes of the financing provider as you can make your payments regularly. Collateral is another requirement that many lenders will put forward.
Thankfully, there are reliable alternative online lenders that don’t require collateral or rely on your credit history to approve you for funding. So, you can apply for small-business loans from an expert alternative business funding provider. In fact, this is the fastest and the most hassle-free way to get access to business financing. Make sure the offered rates are among the cheapest and the financing solutions are the most advanced.
Small Business Funding Options
As you already read, lenders take into account more than one component when considering your eligibility. And these components play a more critical role with traditional lenders as compared to alternative ones.
Business financing can help you take your business off the ground or move it to the next level faster. Also, they can help you obtain the necessary equipment, inventory, retail, or warehouse locations, or whatever you need for starting or pushing forward your business. Last but not least, loans are critical for capital intensive businesses.
So, what options do you have? Let’s focus on the major ones:
- You can start with your bank with which you’re doing most business banking. However, remember that traditional banks have stricter requirements and, often, new businesses can’t qualify for them. This isn’t suitable for those running an eCommerce operation or remote company with no assets to speak of.
- Community banks are another option to try. These will usually take into account cash flow, credit and collateral factors.
- Alternative lenders offer less strict requirements. Besides, you can find high risk alternative online lenders that work with even those who are brand new businesses, have poor credit or no credit at all.
Both established businesses and those that are just starting might need business financing at some point. Shop around for fast and easy access to the funds that can power the growth of your business is of vital importance.
Author Bio: Michael Hollis is a Detroit native who has helped hundreds of business owners with their small-business loans solutions. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working business owners across the country.