Procurement of sufficient capital is one of the main hurdles in the path of an entrepreneur. Funds are one of the first necessities for any business, and it becomes a full-time concern in most cases. This becomes more of an issue when a company is in the nascent stage or is a small business. The numbers of small companies have shown a boom in the past few years.
According to the U.S. Small Business Administration, there are over 28.8 million small businesses operating in the States alone. The needs for loans and funds are also burgeoning as the businesses grow. According to Wells Fargo Small Business Index, a small business owner needs a minimum amount of $10,000 as startup capital.
Ways To Procure Loans For Small Businesses
For a small business, it is best to obtain loans from non-banking institutions and look for alternate lenders rather than banks. The banks do give the credit to small businesses, but they seem to offer loans to small businesses that are already established. The ones that are just starting out find it challenging to meet all the criteria set by the banks.
According to a survey by NSBA, around 27% of the small businesses surveyed stated that they found it difficult to avail loans from the banks. The survey further states that 67% of existing businesses were able to secure loans versus 33% new business.
The alternative lenders smoothen out the whole process of availing loans much to the relief of the businessperson. Take for instance the case of my instant offer which is an online lending club that offers a loan of $1000 to $40,000 for a period of three years.
In organizations like these, you get the flexibility in eligibility criteria, and ability to apply online easily. The loan gets approved and disbursed within about one or two weeks of applying. Besides, these loans are also helpful for the owners who lack a long and detailed credit history. The private lenders focus more on your business strategy and ideas than your credit history.
Procedures To Getting The Small Business Loan Approved
The business loans differ depending upon the requirements of a business and the ones that are relevant to your business need to be sought out at first. Some of the standard options for loans include startup loans cash advance loans, and working capital loans.
The initial step to determining the type of loan you will need is considering the amount of money that you will need and the purpose of needing it. This is a part of the business plan, and it will be under consideration for the loan approval procedure.
Once you are sure about the amount, carry out some research and then find out the number of options about lenders in the market. Check the market reputation of a lender before giving your nod to him. You will also need to research on the interest rates, loan options on offer, and the process of application. Pick out the lenders for whom all these factors tick off the boxes for you.
After you have made up your mind about the lender that you want to go for, get the necessary documents ready. The first thing that you have to prepare in detail is a business plan, and this will be something of high importance to the private lender. A clear business plan can tilt the odds in your favor for good. After the arrangement of the loans is made contact the lender and begin the application process. The time taken by the non-banking institutes is very less so, your business will get the required cash inflow in no time.
If you are interested in even more business-related articles and information from us here at Bit Rebels then we have a lot to choose from.
Author Bio: I’m Arpita Arya, a digital marketer, and a blogger. I have been into the digital marketing for the past couple of years and contributed my experience to various brands over the web. I have great experience in content writing, product marketing and improving website’s traffic through cross-promotion. Facebook & Twitter