All posts by Sean Callahan

10 Reasons You Need a Small Business Loan

You’ve probably heard the old saying that you have to spend money to make money. When it comes to running a business, this is especially true. If you want your business to grow, you have to be able to invest in the necessary expenses. To make a list of these expenses would be futile; there are numerous (and seemingly endless) costs to running a business.

Small businesses are caught in an odd area where they need funding to grow, but due to being small, may find it hard to acquire the funding. Perhaps lenders see the business as not profitable enough to repay. Maybe you have just started and simply have no track record yet. Regardless, a small business needs big money.

Covering all the costs in addition to the daily expenses of running your business can be tricky. Paying for your business needs is often impossible until your business achieves more growth. This can be a circular problem. You can’t grow unless you invest, but how can you invest in your business when you’re spending your money on the costs of daily operation?  The solution may be a small business loan. Taking on debt can seem scary for small business owners, but a small business loan can help you finance changes that can result in a high return on the investment. Still on the edge about taking out that small business loan? Here are ten reasons why your business should:

1. Expansion

Let’s say you have been running your business for a while now, and the building you’re in just isn’t cutting it anymore. Boxes are on top of boxes, storage rooms are busting at the seams, and people are stacked in cubicles like sardines. Or maybe you are getting more and more customers every day and don’t have the room for them anymore. The need for growth is a good problem to have. Unfortunately, it is not a free problem to have.

Expansion costs money. Just because you have to expand does not mean you can necessarily afford it. Sure, profits are up, but so is payroll and countless other forms of overhead. Maybe the hot water tank sprang a leak recently. Regardless, if you are faced with a similar situation, the best advice you can take is to expand. If you can’t afford it, you are not alone.

As a matter of fact, the most common reason small businesses take out business loans is for expansion. This could mean your business is acquiring another facility, or it could mean you are expanding within a business site. Either way, small business expansion usually requires outside funding. The major advantage here is that the expansion itself can pay for the loan. Think about it. If you take out X amount of dollars to expand, and then because of the expansion you make X amount of dollars, it’s essentially a wash! This is a classic example of it taking money to make money.

As a nice bonus, most lenders tend to love when this expansion the reason for a small business loan. If the business is growing to the point of needing to expand, it is a sign the business is successful. Rarely do businesses expand unless there is profit and a promising projection of more profit. This scenario greatly increases the chances of being approved.

2. Working Capital

Plain and simple, sometimes a business just needs more money. Working capital is the money a business uses for daily operation. Working capital is the difference between your total assets and your total liabilities. A business can be very successful but still have a low working capital. Sometimes customers do not pay for services, or there is leftover inventory that needs to move so more can be brought in. Then, factor in your overhead costs like staff, utilities, rent, etc. If this happens, but you know your business is successful and that it would just take a small sum of money to get back to profitable, it’s time for a small business loan.

A working capital cycle is however long it takes a business to turn working capital into actual cash. The balance of incoming and outgoing payments is crucial to keeping this cycle short. The shorter the working capital cycle, the more likely a lender is to approve you for a loan.

3. Equipment

Each business needs specific equipment in order to function. Also, especially in today’s day and age, equipment constantly needs to be technologically updated. Aside from being outdated, equipment also fails. These things are never planned. Maybe an update for a piece of equipment is absolutely necessary and also expensive. Continuing with the restaurant theme, maybe three pizza ovens break down overnight. Maybe you don’t even have the necessary equipment yet!

These types of equipment needs often require outside funding. Small business loans can help manage the costs of equipment so that you can focus on running the business and provide a better experience for your customers. Loans can also help you keep your business up to date with new technology that improves your services and overall customer satisfaction.

4. Inventory

Equipment isn’t the only physical thing businesses need. Inventory is often one of the largest expenses business owners face. The ultimate ‘trick’ is to purchase inventory your customers will demand before they demand it. This means keeping up with new trends, whether your business is travel, fashion, toys, massage, etc. Being with the times and being modern is a requirement in today’s America. This rings even more true for businesses that provide seasonal goods or services. Holidays and weather changes being about new demands, and sometimes keeping the inventory on hand is incredibly expensive.

Financial institutions recommend creating sales projections alongside debt projections to determine whether or not an inventory loan would work for you. Using the past few years for data will help project your current year, so pay attention to sales trends accordingly. (For example, if you own a clothing store in a seasonal part of the country, stock up on winter clothing prior to the start of winter). A business loan will help offset the costs of inventory and allow you to focus on the day to day operation of your business.

5. Build Credit

Improving your business credit score is always a good idea. Small business owners and startup business owners know this best. It can be very difficult for such businesses to be approved for large loans due to either having poor credit or none at all. Whether it’s to improve a lower-than-wanted credit score, or to build better credit in planning for larger loans later, taking out a business loan will help. Bear in mind that the first loan a business takes out will most likely have higher rates than wanted. This is because your credit hasn’t been built yet. Take out a small business loan, pay it off, and watch your credit score go up.

6. Improve Future Loan Terms

Taking out a loan also starts the beginning of your relationship with your lender. The better this relationship is, the more likely you are to get desirable terms and conditions for future loans. Regarding this tactic, financial institutions recommend getting a small and easy to pay loan at first. Paying this loan off will improve your credit, improve your relationship with your lender, and ultimately improve the terms and conditions of your next loan.

Let’s tie this back into equipment. Consider using your first small business loan on a piece of equipment that won’t break your budget. This allows you to stay ahead of the technology aspect (see above) while also building your credit score, which ultimately leads to better terms for the next loan. Think big picture, not just big. Start with affordable loans, and then once your score is good and your lender-relations are good, go for that big loan!

7. Need Staff

Good employees make a good business. There comes a time in every business where more staff becomes a necessity. Maybe you’re expanding, maybe it’s a seasonal flux, maybe five people just quit in a row. Hiring and training new staff is much more expensive than many people might think. Not only do you spend the resources on the new employees, you have to take away productivity time from other staff in order to train and/or supervise.

Using a small business loan to cover the costs of new staff ensures payroll will operate smoothly, which in turn will keep your employees happy. Maybe this can allow you to offer them incentives and boost productivity. The cost of the loan can easily be repaid with the profits of improving your staff.

8. No Repayment Upon Failure

This is not so much a reason to take out a small business loan, but something very important to remember if and when you do take out a small business loan. Because the loan is backed by the business itself, as long as the loan does not exceed the net worth of the business, you will not owe any money on default. Okay, that was a mouthful.

Your business is worth $100,000 total, completely liquidated. You take out a small business loan for $20,000. Two months in, you default on the loan. You as an individual will not owe the lender $20,000. Because the business has sufficient worth to cover the cost of the loan, the business is used. This can be in capital, equipment, or even in ownership of the business. This does not always happen, but can be agreed upon as a term of the loan oftentimes.

9. Exciting Business Opportunity

Sometimes exciting business opportunities arise that you feel you simply cannot miss out on. These opportunities might include being able to purchase inventory in bulk at a discount, finding a new space at an amazing price, or seeing a sale on IT or other equipment you might need. During times like these, financial institutions recommend you think about the pros and cons of taking out a loan for opportunity. However, the revenue stream that may come from financing such an opportunity may be just what your business needs to grow.

10. Emergency Funds

Sometimes it’s just relieving to have a nest egg built up in the event of an unplanned disaster. Instead of waiting for equipment to break, you could take out a small business loan and sit on it, therefore having the funds if and when this time comes. Life happens. In business life, this usually means expense. The need for fast cash can be satisfied by having an emergency fund built up. Not to mention, doing this by means of a small business loan adds the benefits of building credit and building your business.

Good luck with your small business loan!

Business Growth, How a Medical Professional Loan Can Help You Get Where You Want to Be

If you are just starting out or looking to grow your medical practice further a Medical Professional Loan can help. These loans are designed specifically to meet the needs of medical professional, like yourself. With a good credit rating and assets to place as collateral you could receive a low interest, fixed medical professional loan.

Medical Professional Loans

Medical professional loans are designed to help Doctors and Dentists finance various needs within their practice, startup costs and even operational costs during a low time with insurance payments. Typically lenders are looking for a good credit rating and assets to secure the loan, however bad credit loan are also available. Interest rates are competitive with other forms of business loans. Medical professional loans offer fixed, predictable monthly payments that will be affordable to your practice.

How a Medical Professional Loan Can Help Your Practice Grow

If your practice is in need of updates with equipment, a remodel or you are ready to expand a medical professional loan can help. With nearly everything involved with owning a medical practice costing a pretty penny, medical professionals ease that financial burden and allow you to make the changes needed to grow with affordable repayment options. Rather than depleting your practice’s bank account, look to Medical Professional Loans to help your practice grow.

Get a Medical Professional Loan Today!

If you are ready to move forward with your practice, to create the successful business you dream of, a medical professional loan can help. You can keep your practices money where it belongs, in the bank and grow, grow, grow! Medical professional loans are designed for practices, like your own, don’t miss out! Get a medical professional loan today!

Bad Credit Medical Professional Loans

As a medical professional there is a constant need for financing. When your personal and/or businesses credit history is less than perfect it can seem nearly impossible to obtain the financing your practice needs. Luckily there are many lenders who offer bad credit medical professional loans, opening up a financial path way to help your business get back on track.

What are Bad Credit Medical Professional Loans?

A bad credit medical professional loan is exactly what it’s name says, a loan specifically designed for medical professionals with bad credit. This type of loan often requires the borrower to secure the loan with personal or business assets. The interest rate may be on the high end, however after making regular payments you could refinance to get a much lower rate. Bad credit medical professional loans have fixed repayment terms, offering you a predictable monthly payment that is affordable for your practice.

What Can Medical Professional Loans be Used For?

Medical professional loans can be used for a variety of purposes. Many Doctors and Dentist will use this form of loan to cover practice startup costs, equipment purchases, expansions and renovations. Medical professional loans can also be used to cover operational costs, for many practices this relieves the burden while waiting for insurance payments.

How to get a Medical Professional Loan

  1. Contact a lender offering Medical Professional Loans and find out the requirements and your financing options.
  2. Submit an application along with your personal and business financial records, along with the requested loan amount.
  3. Review the terms and conditions to the loan.
  4. Make negotiations on the loan if possible, this will help to ensure you’re getting the best interest rate available to you.
  5. Sign the contact and move forward with your practice and begin rebuilding your credit.

Preparing Business Financial Records for Equipment Loans

If you are looking to purchase new equipment using a loan it is important to prepare your financial documents before submitting an application. Lenders are not only going to look at your businesses credit history, they are also going to want to see your businesses current revenue to ensure that you will be able to repay the loan.

What is an Equipment Loan?

Equipment loans are designed to help business owners purchase new equipment with little to nothing down and affordable monthly payments. The lender will review the business’s credit history and revenue to determine eligibility for the loan. This will also determine the interest rate and the repayment term for the loan.

When purchasing equipment using a business loan the lender holds a lien on the equipment. Failure to repay the loan as promised will result in the lender repossessing the equipment and selling it to cover the borrowed amount, if this is not covered entirely you will be responsible to pay the remaining balance. Once the loan is paid in full the lien is removed and your business has full ownership of the equipment.

How To Get an Equipment Loan

  1. Start shopping for the equipment your business needs. Be sure to negotiate price just as you would when purchasing a new car, the sticker price isn’t always the selling price.
  2. Submit an application to the lender along with your financial documentations and the requested amount to borrow, along with your down payment amount.
  3. Review the terms and conditions to the loan.
  4. Make negotiations if possible to get a lower interest rate and fixed repayment term.
  5. Sign the contract and start utilizing the new equipment within your business.

What is a Start Up Business Loan?

Have you been dreaming of starting your own business? It is time to turn that dream into a reality. With a carefully thought out business plan and a clean credit history you could get the financing you need to cover startup costs and start creating a successful business.

Startup Business Loans

Startup business loans can be difficult to obtain as many lenders view new businesses as a high risk. This does not mean that it is impossible to obtain financing. With a carefully thought out business plan and a clean credit history you could receive financing. With a fixed interest rate and affordable monthly payment, you can start building your dream business without the stress of money.

Startup Business Loan Approval

Because your new business has yet to establish a credit history yours will be looked at. Be sure to check over your credit report and dispute any incorrect markings. The better your credit, the better your chances of approval. The lender may also require personal collateral, such as your family home, to be placed as a guarantee of repayment on the loan. Startup business loans can get you up to 80% of the cash you need to start a new business.

Get a Startup Loan Today

  1. Reach out to lenders and the SBA to determine if a startup business loan is right for you.
  2. Submit your business plan, personal credit report and application to the lender.
  3. Place personal collateral on the loan if possible, show the lender how much capital you have to put toward startup business costs.
  4. Review the terms and conditions to the loan, make negotiations if possible.
  5. Sign the contract and start building your new business.

Top Three Bussiness Start up Financing Options

Starting a new business is an exciting, yet exhausting experience. It takes time, patience and money to get a new business up and running. While your dedication to your startup is clear, you need to figure out the financial end of things to start building your business. The following are the top three business startup financing options.

Startup Loans

Startup loans are typically the first financing option new business owners will turn to. While this is a great way to get the money you need, it is not as easy as one would think. Lenders often avoid providing startup loans as new businesses are viewed as high risk. Regardless to how great your business plan is there is still a chance your business will fail and the loan will not be repaid.

When applying for a startup loan you must has a carefully detailed business plan in place. The lender is going to look at your personal credit since your business has yet to develop its own. To get a step ahead of the lender it is advised to pull your credit report to be fully aware of what is on it and make any disputes on errors. You may also need to show your personal savings and place personal collateral up to secure the loan

Crowdfunding

Crowdfunding is another excellent way to get the startup capital you need. Be reaching out to the public you could raise a portion, if not all, of your startup costs. Using various internet crowd funding sources you can raise this money from various contributors that believe in what you are doing, these are strangers, friends and family. This alternative funding source has helped thousands of new businesses generate the startup capital they need to become operational.

Personal Savings and Retirement Savings

Personal savings and retirement savings are a huge way to get the startup capital you need. Of all people you believe in your business the most, so why not invest what you have saved for your future into your dream business. The biggest downside to using your personal savings and retirement savings is that if your business does not succeed you will have to start from scratch to ensure your retirement future. If things do work out as planned you could retire early!

Heavy Equipment Loans

Heavy equipment often comes with a heavy price tag. Depending on the type of equipment you need to could cost anywhere from $10,000 to well over $100,000 to meet your business’s needs. Rather than dumping all of your businesses savings into a heavy equipment purchase all at one, a Heavy Equipment Loan can allow you to pay for it over time.

What is an Heavy Equipment Loan?

Heavy equipment loans are designed for construction companies to make large equipment purchases with little to no money down. Depending on your businesses credit rating a Heavy Equipment Loan could have an interest rate as low as 3%. The better your credit history, the lower your interest rate will be. This also determines the amount of money you will need to put down on the loan.

This form of loan holds a lien on the equipment until it is paid in full. Failure to make the minimum monthly payments on the loan will result in the equipment being repossessed and sold to cover the cost of the loan. At the end of the loan term your business holds full ownership of the equipment which can then be used for trade in value on new equipment or as a form of collateral on other financing needs.

How to Get a Heavy Equipment Loan

  1. Start shopping for the heavy equipment your business is in need of. Be sure to negotiate the price just as you would when purchasing a new car. The sticker price isn’t always the final price.
  2. Submit an application to the equipment sales companies financing department or to your business bank with the total amount needed to finance the equipment.
  3. Review the terms and conditions to the loan, make negotiations if possible. Work to get a low, fixed interest rate and affordable monthly payments.
  4. Place a down payment on the equipment.
  5. Sign the contract and begin utilizing the equipment so your business runs more efficiently and is able to grow further in the industry.

Fixed Rate Start Up Business Loans

Starting a business may have been a dream for you but now you are turning it into a reality. With the economy stabilizing and lenders becoming more willing to offer start up loans it is the best time to get your business up and running. Rather than putting your entire life’s savings into your startup business, you can take out a fixed rate startup business loan.

What is a Fixed Rate Startup Business Loan?

A fixed rate startup business loan is a loan designed to help new businesses cover their begining expenses. These funds are often used to secure a property, purchase equipment, hire staff, purchase inventory, create advertisement and cover several months of operational expenses until the business starts generating revenue. This form of startup loan is desired by more new business owners as it has a fixed rate, ensuring that the interest will not skyrocket after a certain amount of time after obtaining the loan.

How To Get a Fixed Rate Startup Business Loan

Since your business has not yet established a credit history you will be required to use your personal credit to receive loan approval. Before applying for a startup loan it is important to pull a copy of your credit report and review it carefully. You will want to dispute any inaccuracies and make all efforts to bump up your credit rating. If you have a low personal credit score and bad credit history it may be difficult to obtain a startup business loan.

Lenders may also require you to put up personal collateral such as your family home. This offers the lender a guarantee that the loan will be repaid, otherwise your home will be used to cover the total amount of the loan owed.

Take Your Time

It is important to not jump on the first startup loan offer. Yes this is an exciting time but you need to think like a businessman and always look into all of your options. What seems like a great deal today could be beat by a better one tomorrow. You have been dreaming of starting your own business for years do not get too hasty and make a be financing decision. Take your time, shop around, do some research and always negotiate.

Financing Medical Equipment, Keep Your Business Savings

Running a medical practice can be extremely rewarding. You are not only helping people but creating a successful business. However, at times it can become a bit overwhelming with the constant expenses that come along with keeping your medical practice up to date. Rather than depleting your business savings, turning to outside financing options can help with big purchases of medical equipment.

How Do Medical Equipment Loans Work?

Medical equipment loans are designed to help Doctors make big equipment purchases with little to no money down. With a strong credit rating your practice can take out a medical equipment loan with a low interest rate and a small down payment. You are able to utilize the equipment within your practice while making affordable monthly payments. This will keep money in your pocket and allow you to meet your practice’s financial needs.

Who Can Take Out Medical Equipment Loans?

If you are running a medical or dental practice you may be eligible for a medical equipment loan. These types of loans are typically offered directly through the medical equipment supplier or through your business banking institution. Depending on the life of your medical practice you may be required to use your personal credit to receive loan approval.

How To Get a Medical Equipment Loan

  1. Start shopping for the medical equipment your practice needs, be sure to shop around and negotiate price if possible.
  2. Submit a financing application with the equipment suppliers lending company or your business banking institution.
  3. Review the terms to the medical equipment loan carefully.
  4. Make negotiations on the loan terms to ensure they work best for your practice.
  5. Sign the contact and start utilizing the medical equipment to keep your practice operating efficiently and to continue growing.

Equipment loans for good credit

Having a good credit rating opens up a world of financing options for your business. Rather than high interest loans and large down payments you will find your business being offered more affordable financing options with low interest rates. If your business or personal credit score is over 700, you should be able to find the best financing options available with ease.

Equipment Loan

Keeping up to date and fully functioning equipment for your business is a must. However it does come as a large expense to most businesses. Rather than depleting your business or personal savings to make this purchase you can opt to use an equipment loan. If your business has a good credit rating, or your personal credit rating is 700 or above you should be able to easily obtain an equipment loan with a low interest rate and fixed repayment term.

Is an Equipment Loan Right for Me?

If your business has a large savings and using it will not affect your business negatively then by all means purchase your equipment outright. For most business owners this money isn’t easily obtainable and taking it out of the business can slow down growth. An equipment loan will allow your business 2 to 5 years to pay off the loan while being able to use the equipment to keep your business moving in the right direction. It is important to look at your businesses needs before deciding on a equipment loan.

How to Get an Equipment Loan

  1. Start shopping for the equipment your business needs.
  2. Negotiate the sales price of the equipment.
  3. Submit an application with the financing company or your business banker for an equipment loan.
  4. Negotiate the terms and conditions to the equipment loan if possible to receive a lower interest rate and fixed repayment term.
  5. Sign the contract and start utilizing the new equipment within your business.