Tag: interest rates

Starting and growing a small business requires plenty of capital. And yet, without a strong or long business history most lenders are hesitant to loan money to new companies. The result: many fledgling small businesses turn to their credit cards to finance their operations. In fact, the U.S. Small Business Administration reported that 65 percent of small business owners rely on credit cards regularly to provide working capital. The problem with maxing out personal or business credit card to finance […]

Alternative lenders have offered Americans a viable loan option since the Great Recession and associated legislative regulation put a strangle-hold on traditional business lending. The number of alternative lenders has grown exponentially in the past several years, making online loans and alternative financing easier than ever to obtain. And yet there have been some major concerns about this segment of the loan market. There have certainly been many horror stories reported about astronomical interest […]

Meeting your small business cash needs can be challenging. When it comes to financing, one of the many options is small business bank loans. Many banks will offer both traditional loans and lines of credit. Each provides different benefits and is better suited for certain types of businesses. Here’s how to figure out which one is right for your company: Traditional Bank Loan A small business loan from a bank will allow you to borrow a specific, fixed amount of money that must be paid back […]

Working capital is the money your business needs to function on a daily and short-term basis. The amount of working capital you have consists of the cash on hand to make purchases and fund necessary expenses. It is measured as your current assets minus your current liabilities. When the liabilities are greater than the assets things can get scary. Working capital loans are designed to help small businesses cope with these gaps. While they can be helpful, as with any type of loan there are both benefits […]

Some people get commercial mortgages to buy their own business space. Others get them to invest in real estate. Whatever the reason, there are at least 6 essential terms that commercial mortgage borrowers need to be familiar with before signing on the dotted line. 1. Amortization Commercial loans are amortized, meaning that the principal and interest required are spread out together over the life of the loan. That means every payment includes both principal and interest. Yet commercial loans […]

You may be familiar with the structure of residential mortgages, but how do they compare to commercial mortgages

Mortgage interest rates have been at or near record lows for the past several years, but experts are predicting that rates will see definite increases this year. As mortgage rates rise, other rates, like those on small business loans, often rise as well. A jump in rates can affect both current small business loans and potential ones. As rates rise, the amount of risk a bank faces can often increase. Most banks and lenders actually borrow money from other bigger institutions in order to lend to […]

Having the necessary cash on hand for day-to-day operations is key to the success of any small business. It can be a fine balance to keep enough working capital in between the time you pay suppliers and the time you are paid by your customers. Here are a few ways to make sure your business has the cash flow it needs to run smoothly. Detailed Forecasting Managing your working capital starts with having an accurate picture of your cash flow requirements. It is important to take into account the […]

So-called alternative lenders in the small business lending market have been growing exponentially since the financial crash, filling a gap in available credit when traditional lenders cut back on business loans. Yet these alternative lenders often make loans with annual percentage rates (APRs) as high as 135 percent. How could a loan with that much interest actually benefit a small business? Here’s a few reasons why an alternative loan might sometimes make sense: Limited Time Bank loans can […]

Many small businesses contract with large companies that take the full 120-day limit to pay their bills. The result is that the small firms often come up short in terms of working capital between payments. And unless those small companies offer a product or service unavailable in the rest of the market, they have little negotiating power with the big firms. This situation makes for some tough choices for small businesses. Take a Discount These big companies will often offer payments earlier than […]