July 2, 2009
Credit Card: Many a home-based business has been financed with credit cards. In fact, a survey showed that more than one-third of all small business owners use credit cards to at least partly finance their business operations. Not only are credit cards incredibly easy for most people to get (perhaps too easy, many people receive at least one or two credit card offers a month), but they are also convenient and easy manage.
Personal Loan: Personal loans are made to individuals based on their own personal income and creditworthiness. Assuming you have sufficient income and a good credit rating, there’s a good chance that you qualify for the loan you need. After you have your loan, you’re free to spend the money as you please, making personal loans quite flexible. Business Loan: Banks and other financial institutions make business loans to finance business startups, cover ongoing, operation needs, or finance business expansion.
Line of Credit: A line of credit is a business loan with a unique twist: Instead of a lump sum for the full amount of the loan, you’re given approval to borrow funds up to a certain limit in whatever amounts or as often as you like.
Home Equity Loan: A home equity loan is similar to a personal loan, with one major difference: You’re required to pledge your home or other real property as collateral in the event that you default on your loan obligations.
SBA Loan: SBA loans are business loans that are backed by the U.S. Small Business Administration. Because the lending bank has less of a risk in the event of default, home-based business owners can obtain them more easily than a standard business loan.
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April 9, 2009
Remember, this is the agency responsible for the outreach, licensing, and implementation of, you guessed it, money into the pockets of small businesses. This is done through private licensed lenders who have agreed to join the SBA program. In other words, if your local community bank has a commercial loan department, it might very well have a SBA department which makes these loans. Net effect–more loans will be available for small business concerns. Is anyone out there loaning to small businesses anymore?
Before we talk about how much more money is available to the SBA under the stimulus package, let’s look at the current status of one of the popular SBA loan programs. There is a loan program out there and SBA lenders are actually making loans currently: the Community Express Loan Program. This gives unsecured small business loans between $5,000 and $50,000 with very little paperwork, answers typically in two days, interest rates presently at 7.75%, funding and two weeks, and monies wired directly to your business account.
Enter the Obama stimulus bill. Let us look how it affects this program and small business lending as a whole.
During the Bush Administration tenure, they could easily have renamed the agency the ISBA (Ignore Small Business Association). The point is we have a new administration that actually likes small businesses. Remember these are additional monies over and above the SBA’s current budget . The SBA has already received their budget. This is whipped cream placed on the top of that small business cake.
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February 22, 2009
Other than that, in the beginning small businesses require certain securities to protect them from market risks and accidents. Depending on the scale and kind of business being carried out, applying for a loan while starting a business is a good idea: if of course you can actually get a loan. So if you’re worried about how to apply for a small business loan, read on.
Most people are confused about how to apply for a small business loan. Depending on the type of business that you are planning to start, you can choose between secured and unsecured loans. Secured loans usually have a low interest rate attached to them and can be paid in small installments over a long period of time. Unsecured loans on the other hand need no such collateral. Also, you can borrow more money if it is a secured in comparison to an unsecured loan. In case you have no idea regarding the technical details, do not worry too much about how to apply for a small business loan. Financial institutions and banks always make sure that the borrower is risk-free or at least a low-risk one. Agencies like TransUnion, Equifax, and Experian help you to present accurate copies of your credit history. This in turn shows that the loan has high chances of being paid back.
The amount of working capital invested into the business is also an important area of scrutiny by the lender. If your business has a high working capital it means that your workers will be paid on time and short-term debts and other credit requirements will be afforded by the business without hitches.
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