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How Our Business Loan Platform Can Help You Secure Funding Quickly

In today’s fast-paced business environment, securing the necessary funding to grow your business can be daunting. Fortunately, our business loan platform is designed to streamline the process, ensuring you receive conditional term sheets within 48 hours. Here’s how our platform can help you get the funding you need efficiently.

Wide Variety of Lenders and Competitive Rates

Our platform features a diverse selection of lenders, allowing you to choose the best rates and terms available in the market. Our current featured lender offers prime interest rates with interest-only payments for a 10-year loan term. Additionally, this lender does not pull your credit, requires no personal guarantees, and has no prepayment penalties. This makes obtaining a loan more affordable and accessible.

Simple and Straightforward Application Process

Applying for a loan through our platform is quick and easy. Here’s how it works:

Online Application: Start by applying online, providing the necessary information about your business and financial needs. This initial step is designed to be straightforward and user-friendly.

Pre-qualification: After submitting your application, you will be pre-qualified based on the information provided. This pre-qualification process helps you understand your eligibility and potential loan terms before moving forward.

Loan Closing: Once pre-qualified, you will move to the loan closing, where you finalize the terms and receive the funds. Our platform ensures a smooth and efficient closing process.

Continuous Support and Competitive Offers

Our service doesn’t stop after your loan is closed. We publish your anonymous profile to attract better offers from other lenders, keeping your options open for future financing needs. By making lenders compete for your business, we ensure you always get the best possible terms. This competitive environment benefits you by potentially lowering interest rates and improving loan conditions.

Take the First Step Towards Achieving Your Business Goals

Thank you for considering our business loan platform. We hope this overview has clarified how we can assist in securing the best business loan for your needs. Apply today and take the first step towards achieving your business goals with ease and confidence.

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What Business Owners Should Know About Business Credit Scores

Just like individuals, businesses have credit scores, too. As is the case with personal credit scores, lenders use them to determine the eligibility of businesses for loans. These lenders include the Small Business Administration, banks, and microfinance institutions. Even suppliers check the credit scores of businesses to determine their eligibility for credit supplies, while insurance companies use them to determine the insurance premiums to charge.

There are three primary credit bureaus that rate the creditworthiness of businesses: Dun & Bradstreet, Experian, and Equifax. They rate businesses on a scale of 0 to 100. The closer to 100 a business’ credit score is, the more creditworthy it is. In fact, most lenders require businesses to have a credit score of above 75 to qualify for a loan.

For a business to qualify for a loan at favorable terms, it must establish and develop credit. To establish business credit, a business must register as a legal entity with the appropriate state and local government authorities, then apply for a D-U-N-S number from Dun & Bradstreet. After this, it can begin trading with other businesses and get a business credit card. The lenders and suppliers a business transacts with will report its payment history to the three business credit bureaus, building its credit score.

Business credit bureaus use various data points to calculate a business’ credit score. These include revenues, assets owned by the business, outstanding debts, credit mix, credit usage, and payment history. With regard to payment history, businesses that pay their bills on time and in full over a long period of time increase their credit score, while those that consistently delay or default on their obligations hurt their credit score.

Other data points that credit bureaus use are drawn from public records. These include tax liens and judgments against a business, both of which may lower a business’ credit score.

When a business applies for a loan from a lender, the lender will contact the credit reporting bureaus and ask for the business’ credit report. This report typically includes information on the business, such as biographical information (address, D-U-N-S number, phone number), operational information (sales, number of employees), ownership information, industry classification, payment history, and credit score. This information will guide the lender in deciding whether to lend to the business or not.

This information is not only available to lenders. All businesses can apply to the credit bureaus to get their credit reports, although they will have to pay a fee to do so.

It is important for businesses to regularly review their credit reports with credit bureaus. This way, they stay up to date with their credit scores and make timely changes to their business operations to keep their scores high. In addition, they can identify and fix mistakes on their reports, and even spot suspicious activity that may indicate identity theft or fraud.

Business owners that are dissatisfied with their credit scores can take various steps to improve them. First, they should get up to date with their financial obligations. This means paying off all outstanding debts and bills, including utilities. Next, they should try to reduce their debt levels and increase revenues and cash flows. Limiting credit usage is another critical step. Rating agencies look favorably on businesses that use only 25 percent of their available credit. When a business maxes out all its credit cards, it could mean that it’s in financial distress.

Another important action businesses should take is to separate their personal and business finances. They should have separate personal and business bank accounts, as well as separate personal and business credit cards. This limits their personal liability for business expenses while ensuring poor personal credit does not impact business credit.

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Strategies to Avoid Defaulting on Business Loans

Business loans are vital for small business owners. They provide them with the capital to expand geographically, launch new products or services, purchase or repair equipment, or even meet ongoing financial obligations. However, they do come with obligations themselves, namely monthly principal and interest payments. If a business cannot meet these, they become delinquent and may eventually default.

Delinquency is when a business misses a loan payment. Usually, lenders call business owners when their debt is delinquent to inquire why they have missed a payment. The business owner can correct the delinquency by paying the missed payment plus any accrued penalties immediately. When a business owner’s debt is delinquent for three to six months, the lender considers the business to be in default.

Business owners should take care not to go into default, as it will negatively impact their business credit score. It can even impact their personal credit score if they used it to get the loan. Poor credit scores make it harder for business owners to secure loans later on and if they do, they will likely be at unfavorable terms.

In addition, defaulting on a debt means the business owner could lose the collateral they used to secure the loan, as the lender will have the right to seize it to sell and pay off the loan. Further, the lender may seize the business owner’s personal assets if they personally guaranteed the loan.

In a worst case scenario, a business owner could face legal action. Sometimes, lenders even accelerate loan balances so that instead of the business owner owing the outstanding monthly payments, the lender demands a full repayment of the loan balance. This can negatively impact a business, potentially leading to bankruptcy.

Fortunately, business owners do not have to go into default. There are several steps they can take to prevent this. First is managing their cash flows better. Business owners should work with an accountant to better monitor and account for cash inflows and outflows. They should streamline their operations to align with their payment cycles, ensuring there is always enough cash in the bank on the due date of a loan payment to pay in full.

Where a business is undergoing financial stress, the accountant can devise practical methods of staying afloat such as cutting costs, seeking early payment of invoices, or realizing tax savings. They may even advise the business on opportunities to increase revenues.

If a business owner still has trouble paying debts, they can consult a debt counselor from organizations such as the National Foundation for Credit Counseling. The counselor will evaluate their financial position and advise them on the options available to avoid default.

For example, if a business owner has high-interest-rate loans but qualifies for low-interest loans, the counselor may help them refinance existing debts to benefit from more convenient repayment terms. If the borrower has multiple debts coming due on different dates, the counselor can help them to take one large loan to pay off the multiple loans they have. Consolidating all debts into one often makes it much easier to keep up with payments.

A counselor may also encourage a business owner to talk with their lender. Lenders too don’t like it when a borrower goes into default. In fact, the process they go through to collect bad debts is expensive and time consuming. It is much easier for them if the borrower pays.

For this reason, the business owner can reach out to their lender, explain their financial position, and discuss other options they can take to avoid default. For example, they can discuss debt rescheduling, where the lender defers a portion of payments for a certain period. They can also agree to extend the loan repayment period in exchange for lower monthly payments, or in some instances, a lump sum payment as settlement of the loan.

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Steps to Better Cash Flow Management for Business Owners

A vital element to success in business is good cash flow management. A business that manages its cash flow well is able to meet its recurrent obligations, including repaying debt, while investing in future growth. Businesses that do not manage their cash flow well can do neither.

Cash flow is the amount of cash that comes in and goes out of a business. Cash comes in as revenue and interest income from loans. Cash goes out as inventory purchases, employee salaries, supplier payments, rent, taxes, and debt repayment, among other outlays.

A business that has good cash flow management has more cash coming in than is going out. A business with bad cash flow management has more cash going out than coming in.

A good sign, therefore, that a business owner needs to improve their cash flow management is when they struggle to find the cash to pay debts, payroll, or suppliers. Other examples are when they are always incurring penalties for late debt repayments or find themselves going into their personal accounts to pay business expenses. If an owner is never short on cash for ongoing expenses but has difficulty investing in growth-focused projects like product development, they may also benefit from better cash flow management.

Better cash flow management relies heavily on having a good grasp on business numbers, starting with cash coming in. A business should have more income than expenses, and this income should come in early enough so there is always sufficient cash to pay off expenses when they fall due. Hence, a business owner should optimize income and their payment times.

To optimize income, a business owner should consider reviewing their pricing structure. Sales should cover the cost of direct as well as indirect expenses like advertising and insurance. If they don’t, the business owner could be underpricing their goods. They should review how their competitors price for similar products and services, and if their prices are higher, re-price their own goods.

Payment times are another piece of the income puzzle. Business owners should ensure their income is coming in on time by speeding up invoice payments. They should invest in digital invoicing systems to send invoices faster, send invoices as soon as they deliver a product or service, and implement schedules requiring clients to pay within a fixed number of days following receipt of invoices.

Further, business owners should diversify their payment channels so it’s more convenient for clients to pay. For instance, they could accept credit cards and mobile payments as well as ACH (automated clearing house) and EFT (electronic funds transfers) payments.

Business owners can also offer clients incentives like discounts for prompt payments, follow up as soon as invoices become overdue, and change payment terms of clients who regularly pay late. In the latter case, they can require a deposit before delivery or mandate a full cash payment on delivery.

In addition, business owners should take time to seal any revenue leakages they may be experiencing. Keeping accurate records of all invoices and payment receipts is essential, as do limiting the number of employees who receive cash and having more than one bookkeeper or accountant.

After fixing cash inflows, business owners should shift their focus to outflows, starting with payments to suppliers for inventory. They should re-evaluate their agreements with suppliers and negotiate flexible payment terms. Where possible, business owners can request payment dates that align with payments from their own customers. Where business owners pay vendors by credit card, they should organize their bills by due dates, paying them as they become due. If they have extra cash, they can pay high-interest-rate debts first or take advantage of discounts offered by suppliers for early payment. They should keep track of expenses daily so they know where they stand financially and which payments to prioritize.

Finally, business owners need to review other bills like payroll, rent, and debt repayments. Which of these is eating too much into revenues? If it’s payroll, they may need to make changes to their employee reward schemes to achieve a positive cash flow. If it’s debt, they should consider refinancing existing high-rate loans with a single low-rate agreement.