Starting and operating a business is not an easy task. With this, you may seek a bank loan to start a business. The benefits of small business loans include enabling a business owner to set up a company at the beginning stages.
In addition, bank financing for business is the answer to all the needs of your business. It facilitates the continuity of your business, whether small or big when faced with a financial issue that may bring your business to an end.
Are there provisions for business loans for dentists? Yes, there are. Lenders offer loans to business loans regardless of the type and size of business. There are, however, a few factors that determine if you qualify for the loan. Lenders look for your credit history: most banks and loan lending institutions look for the trend in your past loans.
Each bank must find out the financial statement of your business. You, therefore, need to provide details of your previous year’s business transactions. The bank will need proof of your address and identity of the proprietorship or partnership.
Before applying for a loan, as a business owner, ensure that you assess the suitability of the institution lending your money. Consider the average length of a small business loans to determine the installments to be paid monthly.
Surviving as a small business in 2014 won’t be any easier than it has been in the past. Even as Philadelphia Federal Reserve President Charles I. Plosser predicts the economy will grow significantly this year, dropping the unemployment rate to 6.5%, the fact is 80% of all small businesses will still fail.
The Realities of a Small Business
The problem with small businesses is, well, they’re small. They don’t have the capital for marketing, inventory, or other essential business needs that their larger competitors possess. Say you want to start up a small electronics business. This business specializes in selling video game software and hardware online. While there is undoubtedly a market for that –video game sales were estimated to hit $93 billion in 2013– small businesses don’t have the capital to get up and running while simultaneously competing against retail behemoths like Best Buy, at least not right away.
Cash flow is an especially large problem for start-ups looking to carve out their place in the market. Subsequently, 63% of small businesses that take out loans do so to weather cash flow issues. Of course, cash flow isn’t the only reason small businesses look for loans. Expansion, equipment and inventory purchases, and maintaining salaries for employees also lead to the need for loans. With every one of those business facets being a crucial part of being competitive, no business can afford to ignore them. In short, finding a loan is often the only way to keep a business going.
What Businesses Should Consider Before Getting a Loan
Do You Really Need a Loan
Before deciding to ask for a loan, business owners should be absolutely sure they need it. Crunch the numbers and then crunch them again; can you survive without having to enter into an expensive financial contract? Keep in mind, small business loans come with interest rates as high as 35%.
Know the Pertinent Information
If you want to increase your chances of getting a loan, you need to contact a lending institution with all of the important details. What sort of credit score do you have? Higher credit scores not only make it more likely you’ll be given a loan, but they are also the key to finding an affordable interest rate. Likewise, you need to knowwhy you need a loan, how you’ll pay it off, and when you can expect to fulfill your end of the agreement.
Where to Find a Loan
In the past, businesses would just go to a bank to get a loan. Thanks in no small part to the Great Recession, however, most American banking institutions have tightened their lending. Even as the U.S. lending market makes strides toward more liberal lending practices, many businesses will have better luck turning to alternative sources.
Alternative lending sources, particularly those online, have quickly become a more viable option for small business owners looking for success. Online lenders tend to have much quicker turnaround times for application reviews and the release of cash to qualifying businesses. Further, since many online business financing companies work to “advance cash” instead of loaning it, they can generally offer far more favorable repayment terms.
Too often businesses feel as though asking for help and getting a loan to keep the doors open is somehow shameful. However, if it means keeping your business competitive and stable, why not find the help you need? Just be sure to take everything into consideration down to the finest detail before agreeing to anything.