If You’re in Business, You’re Going to Need Cash

In the life of a business, most need for a cash infusion to jumpstart sales, expand into new markets, or continue to sustain growth at some point or another. But these days, most small business loan lenders make it so challenging to get a loan that spending the time it takes to get a small business loan can sometimes seem like it isn’t worth the hassle. At best it can be a huge distraction from operating your business. The consequences are, that most businesses don’t grow as quickly as they could, they miss opportunities that would give them the competitive edge or they suffer from outdated equipment that leaves them lagging behind the competition. The hunt for small business loan lenders can be a challenging one so we’ll try to break down the challenges for you.

It Won’t Be Easy Getting a Loan From a Bank

Wouldn’t it be great if small business loan lenders could make it easier for business owners to get the capital they need?  Wouldn’t it be great if they didn’t care about things like your credit score or insist on seeing a business plan before loaning you money for your small business?Unfortunately, if you approach most small business loan lenders looking for a business loan, your financial history will be carefully scrutinized. The state of your personal credit history can be a strong influence on your ability to get a small business loan at all.

If you have lots of collateral and a good credit record, a bank might make you a personal loan or some kind of a business loan that is tied to something like your mortgage. It will, however, be tough these days to get any kind of loan for your business that doesn’t hold you personally accountable.

They’ll Want to See a Written Business Plan

If you have no credit history or collateral, getting a bank to loan you money for your business is going to be really tough. In addition to your personal credit history being an extremely important aspect of getting a small business loan, most lenders will want to see a well-written business plan. However, well-prepared entrepreneurs and business owners are walking into the banks with brilliant business growth ideas backed by well-developed business plans that include the financial details, such as an income statement, cash flow projections, and a balance sheet. To the discouragement of many business owners who have taken the time to prepare all this, they are still walking out empty-handed.

It turns out that good credit and a good business plan are still not enough for you to qualify for a loan with most lenders. Many government-sponsored small business loans and grants demand an applicant contribution, often this is in the form of a set percentage of the small business funding sought.  You may also find that a lender is only willing to give you a personal loan rather than a small business loan or that you are expected to sign a personal loan guarantee.

You’re Not In Retail Are You?

You are also at a disadvantage for small business funding if your business is in the retail, service or hospitality sectors, which banks and investors tend to view as being especially risky due to the high rate of failure in these industries. Even harder to get a loan for is a start-up business of any kind. New businesses simply have a harder time finding small business funding than businesses with established track records.

It really only comes down to one thing when banks and lenders are making decisions on providing business loans, and that is RISK. The majority of lenders will say that risk is their main reason for turning down most small business loan requests.

Commercial Bank Loans May Not Be For You

Commercial bank loans are often intended for businesses that have been around for some time and have shown a steady stream of profitability. Venture Capitalist investment or VC money, is a better option for younger firms, but a no-go for individuals who do not want to give up a large percentage ownership in their business. VC’s and angel investors also often demand a board position in the company or significant day-to-day control over operations.

Private Placement can be an option for some, but be prepared to jump through a lot of hoops.

To Do a Private Placement, Here’s what you’ll need…

  • A Sound Business Plan
  • A Private Placement Memorandum (PPM) disclosing the full facts of the investment and business
  • A law firm or lawyer experienced in private placements.
The money from private placements will come from accredited investors defined by the SEC Rule 501 under Regulation D. With this option you aren’t going to jump on a business growth opportunity for your business that will be expiring soon.

Small Business Loan Lenders That Can Get You the Money You Need

If you have read this far, and are just about to give up all hope of financing your business growth, hang in there and read on.  You can still get a loan for your business through private small business loan lenders. To avoid all these challenges many small business owners are turning to alternative lending options and steering clear of banks, VCs and Private Placements and their unrealistic loan qualification requirements.

If you need capital fast to take advantage of a business growth opportunity fast, private lenders could be the answer for your business. Private lenders will not only fund projects that banks reject, they will creatively structure loan repayment to make payback feel easier. But don’t worry, you’re not going to have to start going out and knocking on doors to find your private investor. Financing advisory groups such as iBank Corp. are in business to connect small businesses with investors who are willing to loan money to small businesses without all the paperwork and restrictions that banks are subject to.

Private Small Business Loan Lenders May Be the Answer

Many private small business loan lenders are willing to lend money to business owners with very simple guidelines and very little paperwork. Here’s what you’ll need to provide to qualify…

  • A simple One-Page Application
  • 3 Months Bank Statements
  • A Recent Credit Report (Your credit doesn’t have to be great)

Here are the types of businesses that can qualify

  • Those with 3 Months in Business
  • Loans for businesses in most states
  • Businesses in just about any industry
  • Cash for any purpose

The best part about these loans, they can close fast, often in as little as 48 hours and when you work with a small business loan lender like iBank Corp., because they have so many lending relations, they work with lenders willing to lend up to $1,000,000 if your business can support it.

So go ahead, take advantage of that huge opportunity, say yes to that order that requires your product up front or improve your manufacturing and stay competitive, getting the funding you need can be easier than you think.

To find out how much your business will qualify for, schedule a conversation with an iBank Corp financing advisor.

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