What type of Business Loans are available and how does an Entrepreneur make the best decision for his emerging business situation? First, let’s take a look at the variables involved in your particular situation and we will give you a checklist to use:
Questions for Emerging Companies
- Are you starting a sales or business to business / business to government business?
- How much money do you need?
- Do you have money for a down payment?
- How do you have your personal credit?
- Do you have experience in the Direct Industry?
- When do you plan to have a positive cash flow?
- Will your business be an importer or exporter?
Let’s see these questions one by one:
What kind of business is starting?
If you are going to buy and resell goods, Factoring Invoices or Financing of Purchase Orders-OC are available for emerging companies. In addition, if you are starting a service business, providing temporary personnel, surveillance services, transportation or IT services , for example, an Invoice Factoring Company can provide pre-approval of the customer’s credit and be willing to finance the moment in which you generate an invoice.
What happens if you are starting a sale or restaurant business? There are some programs supported by the SBA available to you such as the 7a Program, Micro Loan and Express. There are also business loans based on your credit card receipts, available after you have been in business for at least 6 months, call Merchant Cash Advance. There are also programs to get you $ 5000-25,000 in financing for equipment or other tangible assets needed to get you started. Please, call us for more information.
How much money do you need?
Different Providers and sources of Financing have different “ideal points.” For example, we have invoice factoring programs of $ 30,000 – $ 10,000,000 per month. Others may have larger programs. Our Merchant Cash Advance program can help businesses that need $ 30,000 – $ 10,000,000.
How much money do you have to put down?
This question is more important if you are going to use a traditional bank or a loan backed by the SBA. Normally, banks do not make business loans without down payment. An Invoice Factoring Company is more concerned with the creditworthiness of its clients.
Do you have experience in the direct industry?
This question is ultra-critical to traditional banks and lenders backed by the SBA (unless you are buying a solid franchise). It is not important for a Factor of Invoices and it is something important for the Companies of Financing of Orders of Purchase or of Financing of Inventory since they want to know that you have the necessary experience to help to liquidate the merchandise if it is necessary.
How soon do you plan to have Positive Cash Flow?
Again, this question is ultra-critical for traditional banks and lenders backed by the SBA. Both require a business plan with cash flow projections. Again, this is not so important for an Invoice Factoring Company but an analysis of your profit from each agreement is important for an OC Financing or Financing Company since they can only finance an agreement where their profits are sufficient.
Will your business be an importer or exporter?
The SBA has some interesting programs for export companies. If you are an exporter, businesscash.es has International Factorization Experience and can help. If you are an importer we have deep experience in OC Factoring and Financing in almost every imaginable consumer good.