Tag Archives: business loans

Unable to Pay a Business Loan? Here are Your Options

Being unable to repay a loan is not unheard of. Even in the business world, it indeed does happen and oftentimes, the outcome can be quite devastating, while in some cases, it may not be that way. Many factors add up and influence what unpaid business loans lead to, and what options are available in such a situation. Your business type and the type of loan your business has taken are two primary factors that control this.

Typically, your business type determines the extent of liability and whether or not a part or whole of the liability shall be personal, ultimately, it is the type of loan you take, that shall determine what options you shall have available to you.

Unable to Pay a Business Loans

1. Non-Repayment of Secured Loans

Secured loans typically are settled by claiming ownership of the security that’s used as collateral against which such a loan is issued.

In some cases, a compromise can be discussed and mutually agreed to, between the lender and the borrowing business. The best way to handle a non-repayment of a secured loan is hence to communicate well with your lender after refreshing your understanding of the loan agreement and carefully examining and understanding your loan terms.

2. Non-Repayment of SBA Secured Loans

Typically, a portion of your loan shall be guaranteed by SBA and the remaining against a valuated collateral. In most cases, the collection process shall include taking possession of the collateral. Thereafter, a claim is filed with SBA that pays the lender the amount. This debt is hence now transferred to SBA. The SBA shall request for the payment to be done to cover their expenses. Should you be unable to cover the expenses, a compromise offer from your end may be accepted.

However, if a resolution can’t be found, the SBA shall submit your account to collections officials at the Treasury Department. The Treasury Department has the authority to take various actions to get the money they are owed, which may include wage garnishing, personal asset cease, etc.

3. Non-Repayment of Unsecured Loans

Such loans are typically high-risk loans and lenders offering these loans compensate for the lack of collateral, by offering lower dollar amounts, higher interest rates, and shorter repayment terms. A personal guarantee is associated with the loan for processing it. While this isn’t technically collateral, there’s a similar impact if you default on an unsecured loan. The lender would come after your assets and/or finances to recoup the money involved with the financing.

In many cases, compromises in repayment amounts and relaxation of liability are seen to be the outcome. Communicating closely and well in time with a lender often impacts the decisions related to such issues.

Other Issues Related to Defaulting a Business Loan

When you skip a single payment of a loan, it shall impact your business credit scores, and depending upon the setup of your business, it may also impact your personal credit scores. However, non-repayment or defaulting business loans have many far-reaching impacts that may include:

  1. A substantial impact on your business credit scores
  2. A substantial impact on your personal credit scores depending upon the setup of your business
  3. Various issues linked to a bad credit performance, e.g. difficulty getting good deals on loans, ideal rental options, etc.
  4. Legal consequences of defaulting the loan
  5. Added liability due to additional charges of defaulting the loan (as applicable).

Get a Flexible Business Loan from Business Advance Funding

One of the qualities of an unsecured loan that makes it friendly is flexibility. At Business Advance Funding, we provide business loans which (subject to eligibility and further terms) offer you the flexibility through:

  • Early loan closures without penalty
  • Extension of loan tenures and payments upon request
  • Changes to loan payment plan upon request

Your business can get a loan from us easily, through our online application system. Simply apply and we shall guide you with the further steps and requirements.

Disclaimer: This article is aimed at providing insight and ideas that are general in nature to most loans of whatever type are described. It does not guarantee the availability of any option in your particular loan deal/agreement/contract with your lender. The terms and conditions applicable to any business loan you may have received may or may not feature such options or features as described in this article.

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!

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.

Financing to Restart Your Business and Bring it Back on Track

Have the recent times shaken your business while it was going great in the past? Many businesses go through such time no matter how strong their basics and foundation may be. But what gets them back when the season looks good again? It’s a combination of hard work, smart work, good marketing, careful strategizing and the support of required funds to put it all together and make it happen. Oftentimes in today’s market, business financing provides those funds when the future does indeed seem bright to everyone. Financing, in such situations, acts like the spark to the fuel that’s waiting to ignite.

When to Choose Financing for Restarting a Business?

Businesses look at restarting for multiple reasons. These could be seasonality, a major downfall after which growth is expected or even a complete shake-up in the company that in the past lead to a fall or in the future is expected to lead to a rise back up. Of course, there are more reasons out there but not can be covered in a nutshell.

Ups and downs are normal in business but there come times when the downfall hits too hard. The reason for this could be internal or external. Here are some examples of situations in which choosing to secure financing for restarting a business is likely to be beneficial:

  • When the decline in business was due to an external factor that is now negating
  • When it was a low point in the season while the good season is right ahead
  • When a good business was shut due to some factors which are no longer a hindrance and the market seems ready to welcome the business back
  • Change of ownership/management

While this list isn’t exhaustive, it’s intended to give a fair idea as to what sort of situations tend to favor added investment in the form of financing.

What to Focus On

When restarting a business, and specifically when also using business financing for that, the stakeholders need to be mindful of things that add up to a strong likelihood of growth and prosperity – after all the financed funds have to be returned in time with added interest. Here are 4 points that tend to be at the top of the list for successful business revival projects/plans.

Hard Work & Smart Work

Most of the business world gets nowhere good without the combination of these two. While the labels speak for themselves and are self-explanatory enough, the feature of the mention here is essential as there can be no room for these key essentials to be overlooked in a business in a situation when the only option is to grow and succeed.

Marketing & Advertising

Now that the business is getting set for a resumption, the customers need to know this. Also, perhaps there are many new potential customers out there now. Getting the right word out to the right market enough number of times for enough people to act on it, is an absolute must. When restarting a business, consider targeted and lower cost-per-engagement and cost-per-conversion modes of marketing. Trending modes at the time of this article’s writing are social media ads and influencer marketing and these work great for many B2C businesses. B2B businesses tend to benefit from social media and search engine ads more than many other forms of advertising.

Renewed Strategy

Everything is changing in the business environment and the old company values, goals, objectives, management techniques and hierarchy might need careful scrutiny and perhaps even a complete overhaul to suit tomorrow.

Financial Situation

Cash rotation, liquidity, and all the other financial basics of a business need to always be closely watched and that probably should never be overlooked. However when using financing options, avoiding a loan bigger than fixed assets can repay in case things don’t work well, is a financial mistake one absolutely needs to avoid making.

Financing the Revival of Your Business

When restarting a business, conventional loans are not much of a choice because the immediate past of the business must have records that may not help with such a loan. However, there is no harm in giving a lower interest conventional loan like an SBA loan or a bank loan.

The other option is an alternate business loan. At Business Advance Funding, we offer flexible options for financing businesses across a wide range of industries and you’re welcome to use our application to get in touch with us for a competitive deal for financing a revival plan of your business.