Post Tagged with: "Small Business Lending"

The Truth You Need to Know About Small Business Lending

money on a clipboardThe face of small business financing has undoubtedly changed over the years. Nowadays, small business owners can have an average debt load of $195,000. They also have a higher average credit limit amounting to $56,100.

This doesn’t automatically mean, however, that all small for-profit organizations have secured loans or credit lines that big. In fact, many of them continue to apply for financing services, although some have undergone the frustrating and emotionally-toiling experience of receiving a rejection.

As one of the 2.1 million small businesses in New York, what can you do to minimize financing risks?

Explore all possible financing options

Applying for a traditional business loan is one of the most effective strategies to acquire financing, but some are still skeptical about it. The good news is there are alternatives.

A good example is inventory-based loans (also known as inventory financing). This asset-based lending system gives your business a higher chance of getting an approval since you’ll be using your inventory as collateral. Through it, you’re secured to have a revolving line of credit. You’ll be able to keep product supply in safe quantities, which means more opportunities to make sales and gain steady profit.

There are several other uses for inventory loans, such as backing you up in case of a sudden emergency expense or in case you need to manage seasonal limited cash flows.

Start improving your credit

One of the biggest reasons business owners get a loan rejection letter is their lack of creditworthiness. This factor can make all the difference when applying for a loan, as it’s a reflection of how financially responsible you are. Lenders want and need borrowers like you, but they also have to ensure that they can get their money back. Before applying, make sure you have a good credit.

As early as now, find the most suitable loan for your business and start building and improving your credit. This way, you can grow your list of potential funding sources further and find it easier to acquire them.

March 29, 2018 at 1:00 amMind of Money