In the meantime, one has a wide variety of options for small business financing. Fortunately, you have other resources to rely on, unlike just bank loans as it was in the past.
In addition to the banks, credit unions and other banking venues, there is also the option of obtaining a loan from a government agency such as the Small Business Administration. There are several places to go to find Boca Raton Mortgage Lender if you have a good idea and decent credit. When you decide to go for the loan, think it all out very well and figure what amount you will need to get the business off the ground.
Upon opening your business account be sure to get to know the people who work there. These relationships will go far for you in the future. You will also need documentation such as your lists of assets, liabilities, incorporation certificates, Statements of all your finances and projection sheets.
You must first prove that you are a legitimate business. Otherwise anyone would be able to declare themselves a business in order to borrow money from the bank. This would not be profitable for the lenders, and would soon make borrowing even more complicated. This is one of the reasons that you will want to obtain a tax ID number. This tax ID is registered with the government, and shows that you are indeed operating a business. This will also make things easier at tax time.
Debt-to-equity ratio: What is your business’s total debt? What is its total equity (value when all debts are paid)? Be prepared to explain your calculation and show all debts and assets.
It is not certain, and commentators disagree, as to whether the Federal government through the SBA will make the loan from taxpayers’ dollars or by private SBA licensed banks. In my opinion it is the latter. It carries a 100% SBA guarantee and I would make no sense if the government itself was making the loan.
One alternative might be merchant cash advance. Merchant cash advance or merchant capital advance have progressed in recent years and offer a viable alternative to banks. Merchant cash advance offers a type of “loan” against future sales. Traditionally this was done through a merchant’s credit card processing receipts. There other options available through cash sales and using the ACH networks. In most cases, merchant cash advances are more costly than a bank loan but the good news is that the merchant cash advance or merchant capital advance rates have come down in recent years.
So how will you know whether you are eligible for this form of a loan? Just skim through the transactions of your business account, if you like what you see, then there’s your answer! So keep dreaming big, SBA loans are there to help make your dreams come true!