Tips to Help You Prepare for a Business Loan Application

You are captivated by your awesome business concept. All you need is the money to start your business. What to do after tapping into your personal funds? Your friends and family members could lend you some money to help you start your business, but chances are you’ll need financing from your bank or credit union.

It is not always easy to get credit. Lenders use strict criteria to determine if you qualify for a loan and they will not want to take any shortcuts in the process.

Here are some tips to help you prepare for your business loan application.

Here are some tips to help you prepare for your business loan application.

Prepare a business plan

Prepare a business plan

  • Lenders want to see a rigorous business plan. You’ll find information, templates, and answers to the most frequently asked questions about this topic on our Business Planning page.

Demonstrate that you have the means to create your business

Demonstrate that you have the means to create your business

  • It is likely that you will need a small salary during the first months or years of your new business. Lenders must make sure that your personal financial situation is in good condition.
  • Be prepared to present the potential lender with documents to support your income and personal investments.

Put yourself in the place of the lender

Put yourself in the place of the lender

  • Try to see the situation from the lender’s point of view. The more you understand what the bank or credit union is looking for, the better your chances of getting financing.

 

Here are some resources that will provide you with more information.

Here are some resources that will provide you with more information.

The Business Bank of Canada (BBC) has a digital book entitled How to Get a Business Loan for entrepreneurs who want to get a loan from their bank. The guide includes:

  • information on what your loan application should contain;
  • information on what bankers are looking for when considering a loan application;
  • a glossary of the most common banking terms;
  • tips to increase your chances of success.

 

Our Private Financing section provides information on the various types of private sector financing.

Before you go to a potential lender, make sure you’re ready and able to answer any questions about your business concept.

Business Loans – Start-up Questions

What kind of business loans are available and how does an entrepreneur make the best decision for their start-up or for a newer business? First, let’s look at the variables involved in your particular situation and give you a checklist to use:

Start-up business questions

  • Are you starting a retail or B2B / B2G business?
  • How much money do you need?
  • Do you have money to put down?
  • How is your personal credit?
  • Do you have any direct industrial experience?
  • How soon do you project to be cash positive flow
  • Will your business be an importer or an exporter?

Let’s take these financing questions one by one:

What kind of business are you starting?

What kind of business are you starting?

If you are buying and reselling goods, Invoice Factoring or Purchase Order Financing is available for startups. In addition, if you are starting a service business to provide temporary staffing, trucking service or IT services, for example, an invoice factoring company can provide pre-customer credit approval and prepare to finance at the minute you generate an invoice.

 

What if you are a retailer or restaurant business?

What if you are a retailer or restaurant business?

There are small business loans that include 7a, Micro Loan Program and Express Program. In addition, there are business loans based on the receipts of your available credit cards after you have been in the business for at least 6 months called Merchant Cash Advance. There are also programs to catch you $ 5000-25000 in financing for equipment or other hard assets needed to get started. Please call us for more information.

 

How much money do you need?

Different lenders and funding sources have different “sweet spots”. For example, we have programs for Invoice Factoring from $ 30,000 to $ 10,000,000 per month. Others may have larger programs. Our Merchant Cash Advance program can help businesses that need between $ 30,000 and $ 10,000,000.

 

How much money do you have to put down?

money

This question is more important if you are going to the traditional bank route or small business loan. Banks typically do not zero down business loans. However, an invoice factoring company is more concerned with the solvency of its customers and we advance you up to 95% of the invoiced amount.

 

Do you have direct experience in the industry?

Do you have direct experience in the industry?

This question is extremely critical for traditional banks and lenders by the small business (unless you buy a solid franchise). It is not important for an Invoice Factor and it is important for a Purchase Financing or Inventory Financing Company, since they want to know that you have the experience to help liquidate the financed goods if necessary.

Under the rules of the small business, we are considered lenders service providers. This is a much more extensive role than a “Packager”, whose job is to take a loan already structured and approved and prepare the documentation for submission to the government. While packers play a valuable role in the process, they do not provide the wide range of services we do.

 

How soon do you plan to have a positive cash flow?

How soon do you plan to have a positive cash flow?

Again, this question is extremely critical for traditional banks and lenders by the small business. Both will require a business plan with cash flow projections. Again, this is not so important for a factoring company, but an analysis of your profits for each agreement is important for an inventory financing company or PO funder, since they can only finance an agreement where their profits are sufficient .

 

Will your business be an importer or an exporter?

business

The small business has some interesting programs for export companies. If you are an Exporter, we have International Factoring Experience and can help you. If you are an Importer, we have a deep experience in Factoring and Financing PO in almost all imaginable consumer goods.

The Cash Advance

 

The cash advance is a cash withdrawal that is made at an automated banking machine (called ATM) via a payment card.

 

How to make a cash withdrawal?

cash withdrawal

To be able to make a withdrawal, you must have a payment card. This card must be inserted in the slot in the slot provided.

At this point it is necessary to indicate the type of operation to be performed. Once the operation is confirmed, the PIN will be requested

Once the personal security code has been entered and authentication has been carried out, you will be asked to confirm the amount you intend to withdraw. At this point the door will return the card and dispense the banknotes and any request receipt.

 

You can make cash advance withdrawals through the following cards:

cash advance

Debit cards: erroneously known in Italy as Bancomat, it is based on the principle of pay now: the expense is debited to the account together with the purchase, the sum is then deducted from one’s bank account at the time of payment.

 

Credit Card: defined by the pay later formula, it allows setting period of time between the purchase and the actual payment. There are different types of credit cards, based on which you can postpone the payment or installments.

 

Prepaid Card: it is based on the pay before formula and involves prepayment by the card holder to have it available for various purchases.

 

The three types of cards just mentioned fall into the category of payment cards and allow you to take advantage of two main services: payment without resorting to cash and withdrawing cash from ATMs.

 

The advance count: limits and costs

limits and costs

The cash withdrawal operation is free or paid based on the conditions imposed by the bank. The bank could in fact charge commissions on the transaction or provide a minimum required for the individual transaction.

 

Usually the withdrawal, like the top-up and deposit operations, are free for customers who use the ATMs belonging to the banking group of which they are current account holders, while, more often than not, commissions are applied when using branches of other banks or credit institutions. Bank fees for withdrawal are also applied to transactions carried out at ATMs abroad. To know the commissions applied by each individual credit institution, it is necessary to consult the information sheets made available by the credit institution itself.

 

Banks could also apply limits on cash withdrawals, especially for insignificant amounts that exceed the limit set by the law. Currently the maximum cash withdrawal is € 1,000 per day and € 5,000 per month. These limits imposed by the current regulations, if exceeded, could lead to an assessment of the tax authorities and even sanctions.

 

Business Loans – Advantageous Economic Conditions

The initiative provides for the provision of unsecured loan in the medium to long term to push business investments and encourage entrepreneurs – in the wake of the financial recovery – to seize the investment opportunities that arise. The maximum amount to be requested in order to enjoy the advantages offered by the project is equal to 50,000 euros to be returned with a repayment plan spread over 5 years.

 

Business loans, advantageous economic conditions

Business loans, advantageous economic conditions

The rates of loans to companies will be facilitated and the costs of preliminary investigation reduced. For companies that require financing in order to launch medium-long term investments, the benefits associated with the super-amortization provided for by the decree of the new 2016 Stability Law will be added, pending approval by Parliament.

 

Furthermore, the economic conditions will be more advantageous if the company, the firm or the beneficiary freelancer are supported by one of the 30 Confidi affiliated, a collective guarantee consortium of the alliance or by the intervention of the small business.

We underlines that the project ‘We give credit to the recovery’ opens the door to the commercial planning of the new credit institution and adds: “we want to recover our role as the reference bank of the Region”. And it continues: “the strengthening that has just been completed strengthens us from a financial point of view and allows us to propose financing at advantageous rates”.

 

Beyond the loan to companies, so many projects

Beyond the loan to companies, so many projects

The will power of the institute to go ahead looking to the future with optimism is found precisely in the many projects in the pipeline. In addition to the small business built program, in fact we also extends a hand to the private sector. For example, ” Recipe Casa” is dedicated to families, a package of residential mortgages, already existing and renewed with many new proposals. To welcome new private customers, offer the opportunity to extend the duration of the package which, not by chance, is called ” Benvenuto Privati ” which proposes the opening of a current account on favorable terms.

MERCHANT CASH ADVANCE

What happens if you do not have accounts receivable to factor and sell through credit cards? In a competitive business environment, you can start up and get your business running or get the improvements you need sooner than you think, by securing a merchant cash advance. If you need working capital for an emergency project, we are here to help.

 

DO YOU NEED BUSINESS CAPITAL NOW?

DO YOU NEED BUSINESS CAPITAL NOW?

With our programs, you can get cash business advance to finance daily expenses, renovations and other business initiatives that require capital that you may not have. Our merchant financing programs can allow you:

  • Get up to $ 500,000 in 3 to 5 days.
  • Use money without restrictions.
  • Pre-qualify within 24 hours.

 

Additional benefits include:

  • No guarantee required
  • No application charges.
  • 90% approval rate.
  • Pay as it grows.
  • Get up to $ 20,000 in 24 hours
  • No credit check
  • Liens and Sentences are accepted
  • 99% approval

For How Much Do I Qualify?

merchant cash

Depending on your type of business, years in business and average credit card sales, you may qualify to receive up to $ 500,000 in working capital!

 

How to qualify?

business loan

  • Be a traditional retail / service / restaurant
  • Have a fixed place of business
  • Accept credit cards as payment

 

THE ADVANTAGES OF MERCHANT FINANCING FOR YOUR BUSINESS

ADVANTAGES OF MERCHANT FINANCING

With a cash advance merchant, you will be able to have sufficient funds for a variety of aspects of your business:

  • Roster
  • Inventory
  • Expansion
  • Advertising
  • Remodeling
  • Emergencies
  • New team

We can finance your business quickly! Please call us or use the Free Instant Budget !

Small Business Loan – Factoring

 

We all know that banks do not offer a friendly credit environment for small businesses. If they offer money, it’s usually not enough. A loan often leads to slow growth of your business due to lack of funds. However, there is a type of financing that is increasing significantly in popularity in our industry. It’s called factoring.

 

What is Factoring?

business Factoring

Factoring is a type of financing that focuses on your client’s ability to pay, not yours.

Factoring is the sale of your accounts receivable (invoices) to a financing source with a discount of the nominal value in exchange for immediate cash. The source of financing is a factoring company.

The process usually works like this: Provides products and services to your customer and issues an invoice. Without factoring, you wait 30-60 days for payment. With factoring, the factor immediately buys the invoice and advances an initial payment of approximately 92% of the invoiced amount. In most cases, you will have funds in your account within 24 hours. When your customer pays the invoice (the payment is made directly to the factor), you will receive the remaining balance minus the factor charge.

 

Business Financing

Business Financing

Factoring and financing of purchase orders are well-established forms of business financing that produce immediate cash payments at the time of delivery, delivery and billing of a customer. In its basic form, factoring has been used by American businesses since the colonial era, and its origins go back even further, thousands of years to the first days of commerce.

 

Consumer’s transaction

Consumer

American consumers take part in a common form of factoring every time they use a credit card. There are 1.8 billion credit cards in circulation, 3.75 each for every American cardholder. In 1970, the average balance of individual cards was $ 649, increasing in 1986 to $ 1,472, and today it is $ 15,950. Millions of times throughout the day, every company that offers customers the privileges of charging by credit cards is the direct beneficiary of factoring. The American retail business depends on the factoring system, and without it the national economy would be severely disabled.

In this family transaction, the issuing bank or the card company is the factor used by Visa, MasterCard or other systems. Advance the seller of the merchandise or the immediate cash of the service after your purchase, long before you pay. Because the seller receives cash in advance without having to wait for payment, your money is not tied up in accounts receivable. For the double privilege of making credit available to customers and getting an immediate payment, the company is willing to pay a discount to the issuing bank or the credit card company – usually 2-4% of the purchase price. Therefore, for every $ 100 of merchandise you buy with a credit card, the seller gets $ 96 or $ 98 in cash immediately.

 

Factoring does the same for commercial or business-to-business transactions

Factoring does the same for commercial or business-to-business transactions

When credit is given to a client, he or she is essentially becoming a part-time banker for that client. For the credit period extends to Smith Customer – 30 or 60 days – you become your lender, and he your borrower. For the time the credit is extended, the value of the money tied is lost because payment can only be anticipated. If Mr. Smith had paid in cash, he could have invested that money immediately, gaining interest in it instead of having to wait. When Mr. Smith pays late, his cost increases even more.

There is no “free lunch” in business, someone has to pay the costs of their credit extension. Either you pay for the reduced benefits or your other clients are forced to pay higher prices. In a marginal company, the excessive extension of credit and late receivables from customers can spell disaster.

Are you a Merchant? These 7 featured tips are for you

 

Are you a merchant or are you thinking of starting a small business? More and more people are deciding to start and start a new project. This is fabulous, since it is a sign that in Argentina we prosper, we are on the right track. We are fighting people, wanting to change the world and do new things. For that reason, we want you to prosper and have a successful business, which is worthwhile.

We have spoken with different experts in the profitable business sector and in loans for merchants, to create this fabulous article. Next, we are going to give you seven very important tips, which you need to take into account to start and go on the right track.

 

Discover these loans for merchants

Online recognition

Online recognition

At present, every business or personal brand has a quality web page. It is essential that you take care of everything that appears in it: its aspects, services, products, image, letter, brightness … Everything must be well cared for and adapted for all devices – tablet, mobile, computer. Thus, you will ensure that any client has a good browsing experience.

The web can also be your ally, since it will help you to carry out online marketing and to reach potential customers more easily. Loans for merchants are widely used for the opening of this new project.

 

Online marketing and positioning

Online marketing and positioning

At the beginning you should invest time and money in SEO and SEM positioning of your website. Also in social networks , fundamental today, in emailing and inbound marketing. The creation of quality content through texts or videos is also very important, as it helps customers find you in the first Google entries.

Do you know that the first five entries are the fundamental ones when a search is made? Keep this in mind when investing in this aspect. On the other hand, it can also be very interesting that you collaborate with influencers or big media to gain in positioning.

 

Earn offline positioning

Earn offline positioning

Of course, not everything is going to focus on online positioning. Loans for merchants can also help you when traveling, in telephone bills and in general networking. At this point the physical network comes into play. In order for people to know you, you will have to make many free lectures and lectures. This way you will position yourself little by little as an expert and, whenever you need someone in your area, they will contact you. They will not hesitate for a second since you are their main reference.

 

Engage your customers

Engage your customers

It is important that your clients trust and want only your services. You should not create a new product or service, just learn to spread it and provide offers that attract attention . You can offer them through social networks and monthly newsletters.

Another highlight is the creation of loyalty cards. For example, in the fifth purchase or, in the fifth service, you are given a discount or have a prize, as a free product. This usually captures attention, so they will continue to come to your service.

 

Use calls to action

Use calls to action

Calls to action focus on capturing the attention of the target audience during a given time. For example, ” only for 24 hours 50% discount on our flagship products “. Logically, if they are star products, they are supposed to be the best and that people will be curious. They will no doubt enter your physical establishment or your online store , with the objective of finding out if they are really interested. That will be the perfect time to introduce them to your list of loyal customers.

 

Take care of the customer

Take care of the customer

Many establishments have a terrible attention towards their clients, differ from them. If, for example, your target market has a bad score, be the best. Good treatment is fundamental in personal relationships.

However, we know that at the beginning it is difficult to have everything, so you can request a loan for merchants through . It is a quick personal loan , totally adapted to your circumstances, where you will choose the price and the time of return. In this way, you can count on a support during the first months and with an employee that helps you.

 

Trust

The creation of the web page, the search for physical positioning, the opening of a business … All involves multiple expenses and risks that not everyone is willing to assume. For that reason, because of the difficulty of the entrepreneur’s path, in we have loans for merchants, with the aim of seeing your project come to light and be a success .

If you need additional information, do not hesitate to contact us. We are a leading service and customer service company, available 24 hours a day. Do not think twice and contact us!