Cashflow Blog

By Christian W Ward

Many Brits have immigrated to the Unites States in recent years, having been lured by the low cost of living and warm weather. But what if you’re starting a small business over there and are having troubling finding financing? Where do you look?

There is one great place to start and that’s the Small Business Administration or SBA for short. In 1953 the Small Business Administration was officially established to serve small businesses. This government backed institution was formed to offer financial support to companies that cannot receive financing through the traditional channels.

By lending to small businesses the government is able to encourage innovation and competition in the capital market, thereby providing a valuable service to both the benefactors of the loans as well as to end consumers. Thanks to the business loans served through the SBA loan process, more then 20 million small businesses have been afforded the opportunity to compete with their respective market leaders since the SBA’s inception.

Today, the Small Business administration is as strong as ever. In addition to directly securing financing for small businesses, the SBA provides loan guarantees, contracts, and counseling services to ensure your business venture is successful. Many people are under the impression that the SBA only provides direct financing to small businesses but in fact, this is not at all true. The Small Business Administration also can serve as a guarantor on your small business loan, whereby you secure funding for your small business directly through a commercial lender and the SBA backs this commercial loan .

In other words, should your small business fail and become unable to meet the payment schedule on the commercial loan, the SBA steps in and pays off the loan. In this fashion the SBA acts as insurance for your business venture. By guaranteeing business loans, SBA - with its limited loanable funds - is able to assist more small business obtain financing through other channels, such as commercial lenders.

The SBA has also moved to open up more services and products to everybody. They have developed programs to assist those involved in seeking minority small business ownership and obtaining microloans. The SBA has also been involved in producing Spanish language informational materials.

A small business loan can be used for a variety of purposes. Some past uses of small business loans include the following:

1. Buying real estate property to house the business

2. Construction, renovation or leasehold improvements

3. Buying furniture, fixtures, machinery, or other necessary equipment

4. For housing inventory and financing working capital

There are a variety of different loan types that can be obtained for your small business needs. For those interested in relatively small amounts of funds, one could apply for a microloan. A microloan can be issued for £5000 - £35,000 depending on the need of your business. These loans can be used for any legitimate business purpose. For many small startups not expecting to grow very fast, a microloan is a great choice.

Another option, offering higher loan amounts, involves dealing with your commercial lender and obtaining an SBA commercial loan directly through them that is backed by the Small Business Administration. SBA commercial loans offer the ability to obtain more financing for your small business, and the commercial lender is comforted by the fact that their risk on the loan is minimised thanks to the backing of the loan by the government.

These are just a few of your small business loan options. Now that you are empowered with knowledge on how to secure financing for your small business, continue your investigation into small business loans. You will find the small business loan service or product that meets all your needs.

Christian is an author of several articles pertaining to [http://www.onlyfinance.com/Loans/Secured-Loans.aspx]Secured Loans. He is known for his expertise on the subject and on other Business and Finance related articles.

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Getting a Small Business Loan in the US

By Gaston Castro

In the modern world, there are many ways for a person to get the money they need to run a small business. This is true regardless of whether they are looking for start up money or expansion money. For a person that is looking for expansion money however, the options are plentiful by comparison and include two flagship deals known as the business loan and the business cash advance. There is a lot of debate as to which one is better, so here is a close comparison between the two in some key areas. Read the facts and then make up your own mind.

Requirements

The requirements for a particular deal are important because they govern how many businesses are actually eligible. For a business loan, you need to have a good credit rating and a history of good repayment. Having a good relationship with a bank or credit union is also a plus and in many cases willingness to accept terms that includes higher interest rates or higher collateral is also something that can assist you in getting a loan. For this reason, business loan requirements tend to shift wildly with market conditions.

Business cash advances on the other hand are not really tied to the market fluctuations. In order to get a business cash advance, you generally need to have a proven track record when it comes to the actual prosecuting of your business, while at the same time processing a minimum amount of sales in cash value through credit card transactions. If you have these requirements down, then you can generally get a business cash advance regardless of what other circumstances might be surrounding your need for the money.

Amount

Amount is difficult to comment on simply because there is so much individual variation within the market. In general however, a business loan of average size to an average borrower might be between $50,000 and $200,000 in size, with the middle point in terms of volume being somewhere around the $100,000 range. With a business cash advance on the other hand, much larger amounts are possible. There have been many business cash advances issued to smaller businesses that have exceeded $300,000 in size.

Repayment

For a business loan, repayment is very strict. You actually are shown something called an amortization schedule beforehand which actually works out the amount of interest and principle that you will be paying back as time goes on. For most deals, you can not deviate from this payment schedule and falling a few payments behind can result in very bad things for your credit rating.

For business cash advances, the amount of money that you repay is tied to the credit card revenue that your company generates. This revenue essentially goes directly from your credit card generation to the institution that did the cash advance. Your other cash flows are left completely out of the equation. This is perhaps the main practical point of difference between a business loan and a business cash advance.

Gaston C. writes articles about [http://www.cashprior.com/business_loans.php]Business Loans and [http://www.cashprior.com/small_business_loans.php]Small Business Loans for Merchant Resources International

Original post:
Business Loans Vs Business Cash Advances

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