Category Archives: Business Loans

How your Personal Credit Score Impacts your Business Loan

Many people new to the business world, do not know about the impact of the personal credit performance on their business. One of the ways that a business can get affected by the business owner’s credit history, concerns the area of business loans. If you are a business owner with a poor credit performance history, you’re likely to have shut a lot of doors for borrowing funds at attractive interest rates for your business, and the only way to resolve this, might be to work on your credit score.

A good credit score helps you have lots of options in the lending market and lenders are very likely to offer better deals to a person having a good credit score. However, not all types of businesses get impacted this way and not all business loans are out of reach for a bad credit score holding business owner. Read on, and you shall find out more.

It Depends on What Sort of a Company You Own

The more guarantees within your business that you link to your personal finances, the more your credit performance impacts your company’s credit options. In other words, a company with limited liability (LLC) would have virtually no impact from the business owner’s credit history even if it’s owned by an individual.

On the other hand, a small business owned and operated by an individual whose personal finances are heavily involved with the business and where even the business accounts are under a personal guarantee of the individual owner, is going to see a heavy impact of the owner’s credit score.

Most lenders are likely to hence consider the credit history of the business owner in the latter case and most lenders are unlikely to consider the credit history of the business owner in the former case, while making a loan offer and decision for the business.

That said, it is ultimately the lender who decides what factors are considered for processing and approving a loan which is acceptable within the legal limits. Under these legal limits, lenders can hence behave differently from case to case and the above is merely the explanation of a logic and trend that cause an impact in general terms.

 Some Trusted Alternate Business Lenders Accept Bad Credit History

Alternate business lenders – distinct from banks and institution lenders – have the option to lend loans at their discretion within certain federal and state regulations and laws. Some trusted alternate business lenders, including us at Business Advance Funding, accept loan applications bad credit business borrowers.

When a bad credit score holder who owns a business applies for a business loan from us, we perform a more stringent verifications of the operation figures of the business, also being mindful of the sector that the business is operating in. A loan approval is then based more upon revenue and financial health of the company instead of being influenced also by the credit score.

We also provide loans with no hard credit check. When you seek such a loan, we shall skip the hard credit pull which is likely to impact your credit score negatively if you already have a bad credit score and are still applying for a loan. The following section shall explain more about this.

Does a Business Loan Impact Personal Credit Score?

In the most general terms, a credit product that is impacted by your credit score, is also likely to be impacting your credit score. Hence, as mentioned above, when you request for a no hard credit check alternate business loans, the loan neither gets affected by your credit score, nor does it affect your credit score in any way.

That said, the more personal guarantees you have associated with your business account, and the more closely linked your personal finances are with your business’s finances, the more likely it is that most business loans shall impact your credit score.

For absolute clarity about any loan product’s impact on your credit score however, it is important to seek such information from your lender.

What Happens when you have Business Partners?

One of the most common queries we receive related to credit scores, is how the credit score of business partners affect borrowing. Again, the transaction and the offers are all finally at the discretion of the lender. But as a general rule, some lenders would refer to just the majority stakeholder’s credit history, some would refer to the credit history of the owner they are most communicative with and some might pay equal attention to every partner’s credit history. There is no specific rule of thumb here, but many lenders tend to have internal policies and guidelines that cover such situations.

Apply for an Alternate Business Loan that Accepts Bad Credit Scores

We at Business Advance Funding provide business loans irrespective of the personal credit score of the borrower. Yes, a healthy credit score might get you a better offer. Nonetheless, a poor credit score shall not disqualify you from our business loan products. To initiate a query for our alternate business loan, a simple online form shall get you started as we verify the information and get in touch with you to offer deals designed to help your business get the financing it needs.

Festive Season Business Loans for Thanksgiving & Christmas

The festive season bring with itself, a time of joy, celebration and business growth. While there are some sectors that take a hit – for example business hotels – the vast majority of sectors enjoy growth in revenues and profits. This growth can oftentimes be strengthened with added capital. Choosing a business loan for a festive season like thanksgiving, Christmas and more, is hence a frequently employed business tactic that helps businesses make the best of the season’s opportunity.

Festive-Season-Busines

As you read ahead, you shall find information about festive season business loans, how businesses use them and what opportunities the festive seasons bring, for which a festive season business loan can be utilized.

Get Working Capital for the Festive Season

Most businesses choosing an alternate business lender like us at Business Advance Funding, choose festive season business loans to support their added needs for working capital during the coming peak season.

Research data reveals that working capital needs for the festive season can be as high as 16 times the usual for some businesses, such as a banqueting service and a gift delivery service. In such a circumstance, a business can either liquidate assets, keep and unusually high liquidity or choose to borrow funds for supporting the needs. All such options are better than being unable to serve the needs of the customers.

Many businesses hence choose to utilize business loans for addressing their added working capital needs during the festive/peak seasons.

 Be Stocked and Equipped for Thanksgiving & Christmas

Another common requirement that added demand directly leads to, is added needs for inventory and a requirement for added or higher yield equipment.christmas inventory

An example for a business that needs such support, is as simple as a supermarket. People tend to stay home longer during holidays like Christmas. This already increases the demand for everyday items during this season. To add to that, supermarkets are expected to put up Christmas sales and even special items that are exclusive to Christmas. All this together asks for a huge increase in the inventory of the establishment.

Since larger demands being satisfied translates to larger revenues, choosing financing solutions for such a reason, is often seen as a good option.

The Opportunity that the Festive Season Brings

As seen in the two examples above, the festive season bring a huge added revenue opportunity. However, that’s not where it stops. There’s a great opportunity for businesses to:

  • Diversify
  • Capitalize on marketing
  • Capitalize on branding
  • Perform social services
  • Grow a strong community
  • Increase services and/or products offered

While this finite list only presents six ways in which many businesses take advantage of festive seasons, it in no way is complete – there are many more creative and unique opportunities that festive seasons can bring for various businesses of various sectors and industries.

Get reliable Funding through an Online Business Loan

Businesses increasingly are inclining towards alternate business loans, especially the ones available online. The primary reason or this is convenience. While such direct lender loans are convenient, not many lenders out there are legitimate and reliable.

Being a BBB Accredited business in operation since well over a decade, Business Advance Funding maintains amongst the highest approval rate of business loans each year. This is a reflection on how reliable an online business loan option our service remains.

Apply now to have your Festive Season Business Loans Approved Soon

Applying for a festive season business loan from Business Advance Funding is a simple task that starts with getting on call with us at (800) 991-7020 or simply filling in our online loan application that asks for no deposits and features no impact on our credit scores.

We wish you a happy and successful festive season ahead!

5 Ideas to Keep a Healthier Cash Flow during Tough Times

It is natural for businesses to face tough times. There could be internal reasons, amending which could potentially be the best way to overcome such a problem. But there could also be external reasons, over which the business and stakeholders may have little control. What is the most important factor to look at, during such times? If experts are to be relied upon, most of them hint towards efficient management of cash flow.

A healthy cash flow can help a business sail through tough times and even come out stronger than before when the times are good again. Be it seasonality, a local change in trends, new competition, a natural disaster, a pandemic or any other external factor, we share ideas that are tested by time to serve businesses during times of need. Let’s dive into it.

1.      Manage Payables Calculatedly

One of the most utilized ways of increasing liquid capital availability is to delay payments for suppliers. While it works at times, there are aspects that may not allow this to be as simple a solution as it seems.

Being calculative while managing payables is important. If some delays attract interest, it is quite understandable why those delays may be a wrong choice altogether.

Keeping a strong control on payables might need good software being operated by a well-trained team. If an investment needs to be made to put such a system in place, a strategic decision about allocating funds for such an investment may be needed.

2.      Use Debt to your Advantage through Business Forecasting

Forecasting well has a ton of advantages. However, forecasting can only have a limited accuracy as unforeseen eventualities can always affect business in unforeseeable ways. Businesses can use expert understanding of debt to a great advantage when forecasting is done well.

For example, in a situation where September is being difficult, while November is certainly going to be great for business, a debt that can be paid off after November, is likely to be worth the added interest that one may incur. On the other hand, if debt products are added and the future isn’t looking too great, it could lead to a business disaster.

At Business Advance Funding, our experts work with you towards understanding how and when a loan could be helpful. To initiate a query, a simple online loan application is all it takes and we shall get in touch with you, to guide you through the process.

3.      Pre-Payment Incentives – To Customers and From Suppliers

Some businesses choose to offer rewards for early payments. If this is something your business can offer or receive the benefit of from a supplier, it could be useful to consider. Depending on how significant the incentive is and how much of a difference an early payment would make, decisions can be made about taking advantage of such an offer – either by making the offer to customers or receiving the offer from supplies; or perhaps even both.

4.      Incline towards Lean Business Management

Lean is in and there’s nothing much one can say against it. The idea is to store, stock up or own only as much as is needed for everything to run smoothly. Lean Business Management is all about cutting down on processes, inventories, practices, team members, equipment and other factors that add to cost (directly or indirectly) without adding to productivity or output.

Some businesses do go too far and cut costs that lead to a drop in the output quantities or quality, which in turn leads to a drop in customer satisfaction and/or revenues. That’s not what the right Lean Business Management techniques would teach and it’s also not what this article is intended to convey.

5.      Consider Choosing Creditworthy Customers

This is a slightly tough decision for many businesses to make and it is not very easy to judge if such a decision would be feasible at all. But for those businesses where this option is available, it could lead to a huge difference in the cash flow.

Customers with healthier credit history are much likelier to clear dues on time and this can be a very significant contributor towards a healthier cash flow, especially during tougher times. There are businesses that manage to filter their customers on the basis of their creditworthiness, which can be assessed in multiple ways. Maintaining a strong database of valid information about one’s customers and potential customers, plays a key role towards achieving such a proficiency.

Online Business Loans for Start-Ups

Not everyone is blessed with a ton of ancestral money or property to be able to open a business of their own without some financial assistance. Almost every start-up’s business owner relies on additional funding from sources outside their family. However, getting a business loan from a traditional lender for an idea that is fairly new especially if it hasn’t been implemented yet is quite difficult. Lenders like banks see larger firms as being of a lesser threat or risk when it comes to repayment which is the reason why most owners of small or medium-sized businesses may find it hard to get approved for additional monetary assistance with them.

However, that doesn’t make it impossible for a start-up to get funded by a third party. The process of online lending for businesses majorly supports SMEs and start-ups by providing them with the financial assistance that they need. As a matter of fact, most of these lenders offer a limited amount of money compared to a bank, which in itself means that they are meant to cater to smaller and newer businesses. Your business idea will not go in vain now, as online lending is meant just for you if you’re a part of the start-up business owner clan.

However, before diving into something as big as a financial decision for your start-up, you should know how online business loans are beneficial and how they aren’t.

Let’s first look at why online business loans can be beneficial compared to loans from other lenders:

Bad Credit is accepted: One of the biggest advantages that one can get with an online business loan is that they do not have to be concerned about their credit rating. Whether they have bad credit, good credit, or no credit history at all, they still have a higher chance of getting funded with online business loan lenders over traditional lenders.

No collateral is required: Unlike the need to offer collaterals to traditional lenders when one wants a loan from them (especially if they have a poor credit rating), there is no such requirement with online business lenders. When we say funding is easy, it certainly and undoubtedly is! The requirement for no security pledging at all is something that a lot of borrowers appreciate since they get a good chance to get funded. Also, it helps them avoid any stress related to losing something valuable thus lowering the risk factor that’s already involved in starting a whole new business.

Funding is quick: Apart from the fact that it is easy, getting funded with online business loan lenders is also a speedy process. Because the process takes place online thus avoiding the involvement of commute and because one can avoid paperwork and other lengthy, time taking procedures such as credit checks and collateral offerings, getting cash advances online is quite a fast procedure.

Some say that business loans from online lenders aren’t preferred. But why is that?

Possibly the only drawback that one can name when it comes to online business loans is their interest rates. The APRs of these loans are undeniably higher than those offered by banks. However, that’s because of the various advantages that are offered by them and this factor gives the lender a sense of security of being repaid an amount at least close enough to what was lent in case things go south and the borrower is unable to repay.

Business loans online can be really beneficial to start-up owners. All one has to do is pick the right lender and know which one is legitimate, while also being certain about repaying.

3 Working Ways to Fund Your New Business Idea

All big and unique businesses once started off as being just an idea. It takes a combination of many inputs and efforts to turn a business idea into a reality and then to take that reality to anything near it’s true potential. One of the critical inputs that almost all business ideas end up requiring at each step of growth, is funding.

There are numerous ways in which a business can be funded at various stages of its growth and development. In today’s market some ways are more commonly used for reasons of practicality, than others and with regards specifically to funding new business ideas, we share 3 funding systems that the market tends to be leaning towards most often. So read on to know what’s working well and why, to see if it could work for you too!

1. Bootstrapping followed by Alternate Funding

This is the most common combination of funding that is seen in new small businesses today when industry is kept as no bar in the measurements.

Bootstrapping is when an individual or a team invest a part of their personal funds to start a new business. Alternate funding is non-bank/non-institutional funding for businesses provided by alternate direct lenders for businesses. These tend to be higher in risk and have simpler application processes and hence are loans on the higher spectrum of cost. Since most alternate funding options require businesses to be operating with revenue since at least 6 months, bootstrapping is the most common initial funding source of new businesses that tend to use alternative funding as a boost once the business gets on to a slightly stable track of operations and cash flow.

The main advantage is that it’s an option open for almost all new business ideas with a fair strength and potential.

A renowned service that for alternate funding catering to virtually all industries in the market, is BusinessAdvanceFunding and if you’re looking for a short and simple online application procedure that is followed by a swift response, we welcome you to submit your business details using our application form.

2. SBA Loans and Federal Grants

The federal and state government do encourage startups and small businesses with support that comes in various forms. These can vary vastly from industry to industry and time to time. The SBIR, STTR and other such programs including SBA loans are all covered in this blanket of funding options.

The main advantages of these are that they are fairly reliable and come with attractive deals, well designed to suit the needs of new and upcoming small businesses and projects.

The main limitation is that such grants and loans may not be available to everyone and factors like personal credit history of the applicant(s), their financial health, location and industry/sector are crucial factors that may play a decisive role in approval of grants and loans.

3. Crowd Funding

Crowd funding can serve as a great solution for business ideas that are suitable for it and when the people behind the crowd funding campaign are geared up to get it right either in the first time or in a two or three tries without giving up.

A crowd funding campaign is an organized attempt where an individual or a team/organization seek to raise funds from a crowd that may be familiar with them and would ideally be interested in donating money for the cause that is presented to them by the campaigner(s). It is typically an option that works well for business ideas that may be helpful for human development in some way or contribute towards society, culture or other such emotionally involving matters. Good network, reach and presentation skills can make a crowd funding campaign do well.

The biggest advantage of crowd funding is that people choose to donate for the cause and hence monetary returns are not expected by people contributing towards such a campaign. Usually some valuable rewards relevant to the business idea being discussed are what the campaigners promise as a return for donating to the campaign.

The main limitations of crowd funding are that it isn’t exactly a reliable and predictable source of funding and that many factors that may not exactly represent the potential of the business idea, may affect the probability of the funding significantly.