There are many facts about small business loans that business owners are not aware of. And, most private companies will all need to access a business loan at some stage of their evolution. It could be to ignite growth and finance a marketing campaign, stock up on inventory, and/or maintain a stable cash flow during growth spurts. This can also include the ebb and tide of seasonal sales. The following are things you really want to be familiar with in terms of small business loan facts.
1. They’re All unique
Independent company loans are basically as varied as the entrepreneurs that apply for them. Even within the same lending institution, you can find a wide assortment of loans, running in requirements for approval, interest rates, or payback terms.
Every loan specialist has their own recipe for establishing loan conditions. They’ll all offer various sums of cash at various rates, and they’ll all require an alternate FICO assessment.
With the variety of loans accessible, it may be overwhelming to attempt to sort through them all in a hunt for the best options for you.
If you’ve identified what type of loan you need and can afford, then it’s just sorting through companies that offer it. If you lack the time, focus, or expertise, reach out to a loan specialist at Franklin Merchant Capital and let them do the grunt work for you. They have the expertise to find the correct match for your business, will help you prepare the application, and have access to many sources that you may not.
2. Preparation assists in application approval
This is perhaps one of the most important small business loan facts. Rather than strolling into a bank and hoping for the best, consider approaching the application interaction as you would a prospective employee meeting.
Everything in business is a sales negotiation, so either you’ll be prepared and “sell” the lender that your business is a good bet for them, or they will ‘“sell” you the reason that they’ve declined you.
Getting prepared takes a little attention, time, and effort on your part. Unless you have a loan specialist do the work for you.
You should have a strong field-tested strategy to address the lender’s expectations, and a copy of your sales history to satisfy the requirements they may set. Be prepared to show your sales, your net profits, your growth, and/or a KPI chart (key performance indicator) with growth projections [that you can make a compelling case for].
Facts About Small Business Loans
3. There are alternative money lenders to banks
Another less-known small business loan fact is that there are many alternative money lenders to banks. Banks tend to be rigid and require stellar credit, or a long operating history that you may not have.
Don’t fret. While research shows that 75 percent of private companies that apply for loans are denied, there are many alternative loan opportunities for small businesses. Whether you need funds for equipment purchase, inventory, marketing, or just day-to-day cash flow, there are alternative business loans specific to the need. Where a line of credit may serve a small business to maintain inventory stability, a merchant capital advance may be better suited to sustain the cash flow of a growing small business.
Banks can drag out the loan process, while private loan specialists can complete your application, source a lender, and likely get your approved within 24-72 hours. Talk to a no-obligation loan specialist today.
4. There is no shortage of loan scams out there
With the extraordinary growth of the Internet, there has been an explosion of online businesses, and so there are many more facts about small business loans online to absorb. Most importantly, there has also been an explosion of online scams. During the past six years, almost 70% of independent companies have said that they were approached by online loan scams. According to SCORE, the number of scams in 2019 was 139, That number grew in 2020 to 266 million! The Federal Trade Commission also put out a warning of pandemic-related scams. Scammers will attempt to take your cash, individual data, and business data by acting as an authentic loan specialist, and/or Government-related facilitator to get your government assistance “that your business has been approved or qualified for, or entitled to. Be careful, and fully vet any offer you’re presented with.
This is yet another crucial small business loan fact to be aware of, and perhaps the most important. Don’t bite the hook when you receive calls out of the blue. Make sure you’ve checked the website, that there is a number you can call to reach a live customer service rep, and check the company on social media to make sure that (A) they have a real-time presence, and (B) that they have moderately good reviews. Reviews are a bit dicy in the loan specialist space, as someone who gets the loan they seek will likely provide a high rating, while someone who doesn’t will provide a 0 or 1 rating. Also, check the address of any loan specialist you’re considering working with to make sure that they’ve at least been verified by Google My Business to be listed. Another good source to verify them is the Better Business Bureau.
Launching a business daunting, sustaining and growing it moreso. Franklin Merchant Capital is here to assist those that have the focus and determination to reach the stage where they need a growth loan. Feel free to call (1 (888) 881-7860) and or write us with questions about additional facts about small business loans, or apply directly here.