Small Business Loans - Start Your Business With Your Money

Big or small, if you put your mind and heart in a business then there is no way left but to achieve success. It is, in fact, a small business which will make you build the foundation for a bigger business and a very successful future. So, while setting your small business if you feel the lack of the necessary finance then can go for the small business loans. These loans are designed to help you only.

While you go for these loans you will find that there are two forms of such loans. One is the secured loans and another is the unsecured. You should not just blindly approach any of these. In stead, knowing about these and then taking one up will be better. The secured loans are for those who are home owners or have valuable property to pledge as collateral. It provides facilities like lower interest rate, bigger amount and longer repayment term. So, if you think that you need a bit large amount for your business then the secured loans will be the best thing to go for.

However, for not so big monetary requirements and for the non-homeowners the unsecured loans are perfect. It is good for non-homeowners only because no collateral is required here. So, you can take up this loan and start your business without any tension.

For bad credit holders doors to success are now open as these loans are provided to them too. No matter whatever their credit score is, they are eligible for it even if they carry records like arrears, bankruptcy, late payment, CCJs or defaults.

When it is about starting a new business many things comes into context. These are like buying a land or an office or a store, constructing office, decorating it, hiring people to work, buying raw materials and machines. For all these things the loans too must be adequate. The small business loans have solved all those problems and are helping its borrowers in each and every aspect.

Unsecured Business Loans

Collateral - A borrower's asset that is given up to the lender if the borrower is unable to pay back the principal and interest on the loan; making the lender the new owner of the collateral.

Credit Score - A numerical expression based on the analysis of a person's credit files, to represent the perceived likelihood that the person will pay debts in a timely manner.

These are two terms that one must be familiar with when contemplating a business loan, simply because banks consider both of these when determining whether or not to approve the loan. Many small business owners may not have one or the other (sufficient collateral or a high credit score), leading them to search for unsecured business loans, which only require borrowers to posses one of these requirements.

An unsecured business loan is a business loan that is not backed by collateral. In most cases, this leaves unsecured business loan lenders to rely solely on the borrower's credit rating. Collateral serves as a means for the lender to get back the money that they have lent, should the borrower default on the loan. It is a back-up plan for lenders to make sure that they get their money back no matter what. If a borrower does not have collateral, a lender may require the borrower to have a near perfect credit score. This is because the lender can only rely on the borrower's past borrowing and repayment habits to determine if he/she is likely to repay the loan. Consequently, it is virtually impossible for a potential borrower with a low credit score to receive an unsecured business loan, because their credit history suggests that they will not repay their loan on time, if at all.

However, there are lending companies that offer a different kind of unsecured business loan; one that is not based on the borrower's credit rating. These lending companies provide a type of unsecured business loan called a merchant cash advance. A merchant cash advance is a lump sum of cash given to a merchant in exchange for a small percentage of the business' future credit card receivables.

Since a merchant cash advance is based on a business' future credit card receivables, rather than the borrower's credit score and/or collateral, it can only be utilized by retail business owners who process credit card transactions.

Additional requirements may vary from lender to lender. Generally, a merchant must not have any unresolved bankruptcies or tax liens to be eligible to receive a merchant cash advance. Also, lenders may require merchants to process anywhere from $2,500 to $5,000 in monthly credit card sales for four months to one year before approving a cash advance. Merchants are also usually required to have at least one year remaining on their business' lease.

A merchant cash advance can be a great alternative to a bank loan. Most lenders are able to provide loans from $5,000 to $500,000, depending on how much money a particular business location receives in credit card sales each month.

If you are one of the many loan-seekers in search of an unsecured business loan, choosing a merchant cash advance may be a very lucrative decision, especially if your credit score is not great. If you meet the minimum requirements (owning a business that processes credit card sales), consider researching the existing merchant cash advance lenders, and find out if a merchant cash advance is the unsecured business loan for you.

Accounts Receivable Financing

Accounts Receivable Financing- The Fine Art of Happiness explores the history of factoring; it offers suggestions, questions and answers to the question of whether or not accounts receivable financing will bring you and your business happiness and success.

merchants happy? Because they would be paid for their merchandise many months before payment for their merchandise was received. With this cash in hand, suppliers, employees and Imperial taxing authorities could be paid. These financing agreements were based on long term relationships and trust.

Two hundred years ago accounts receivable financing evolved in the United States of America, primarily for the textile industry, for the same reason: to accelerate growth and profitability by accelerating cash flow. Again, long term relationships and trust were the main basis for these financing arrangements because there was no effective court system to enforce international contracts for the purchase of European fabrics for American factories.

Thirty years ago the concept of accounts receivable financing, or factoring, was considered to be on the fringes of respectable financing for products or services other than textiles. It was considered radical to finance the accounts receivable of relatively high risk businesses. Since then accounts receivable financing has evolved into a multi-billion dollar industry. Long term relationships and trust are still very important because when you utilize accounts receivable financing you are entrusting a commercial finance company with the lifeblood of your business- your cash flow.

Let’s make some assumptions. The purpose of life is to be happy. As a business owner, you are happier if your customers pay immediately when they receive your invoice as opposed to many months later. As a business owner, you are happier if you are more profitable when you are selling more goods or services at greater profits.

Accounts receivable financing may be the enabling tool for more capacity, more flexibility, more fluidity, more efficiency, and more sales if you have to give credit terms to your customers and your internal cash flow, or bank financing will not keep up with you need for cash to grow. So you need to ask yourself, are you happy with the status quo? Do you feel like you are stuck because your capital expenditures and operational costs are too high? In the life of your business, do you feel like you are being held back from succeeding- like receiving the “Do not Pass go, do not Collect $200” card from the game, Monopoly?Here are some questions to ask yourself regarding overcoming obstacles to your happiness and success: What is your market? Is it local, national and/or international? What are your short term and long term challenges? What is your customer base? What is your company sales and distribution strategy? What is your strategy for accelerating growth, market presence and penetration? Do you have strong gross margins with additional opportunities to drive operating efficiencies as you business scales upward? Will you realize increasing margins as a result of increasing sales? Query: could your business be expanded exponentially if you had virtually unlimited financing? Is this a reasonable goal and would this make you happy? You need to evaluate the cost-effectiveness of accounts receivable financing versus the scalability and capability of your own company. Accounts receivable financing may be your solution to the fine art of happiness and your success as a business owner.