Like the gas in your car, cash in your business account keeps things running smoothly. But, if your tank goes empty, neither your car nor your business will be going anywhere until the fuel is replenished. A big business relies on its credit line from traditional lenders to keep the vehicle moving, but what if your business is a small one or established for less than two years.
You might try a bank, especially if you have a long relationship with one through your personal account or another business account. Money is tight however, and banks are conservative and many banks have more stringent rules, including experience in the business you are starting.
Where can you turn, then, for business financing to invest in buying machinery or equipment, even consolidating business debt or paying taxes in a tight cash-flow situation? Cash flow while waiting for payments from your clients.
Consider online finance companies that specialise in short term loans for small business. They are often smaller than banks, it is possible to make your terms and repayment options flexible to suit your individual small business needs.
What about interest rate, isn’t it higher for this type of loan? Not necessarily. Interest rates depend on several factors, including the nominal market rate, type of business and degree of risk, the repayment terms sought, the amount being borrowed and the creditworthiness of the business or the person seeking the loan. Remember that the final decision on whether the institution will give you the loan, as well as how much they will lend, will be made in consideration of your ability to repay.
You should always shop for comparison in rates, terms and any other factors that are important to you. Also, you would be well advised to deal with only an authorised or licensed lender, preferably known to you or with good references from satisfied clients. Finally, make it a rule to always pay your business financing commitments on time. Not only is it good business practice, but decisions on future lending to you will take your payment history into account.
If you would like to learn more about Business Loan Options for your Organisation, contact our Professional Business Loan Consultants for an obligation free quote today.