Tag: working capital

Trying to navigate the small business loan process can be confusing and exhausting. If your company is looking to find some business funding through a bank or other traditional lender, it helps to be aware of the kinds of paperwork that will be required of you. Here are the six most important pieces of data you should prepare before applying for a small business loan: 1. Personal Credit Score Even though you might not expect a bank to pull your personal credit score when you are applying for […]

Many new businesses go under not because people don’t like their product or service, but because they have problems managing their cash flow. The large amount of working capital they started the month with disappears and no one seems to know where or why. If your company is struggling with keeping positive cash flow, here is the prescription to cure your financial woes. Track Every Cent With so many transactions occurring every month, a tracking system is essential to figuring out what is happening […]

Writing paper checks is just a routine part of every small business, right? It doesn’t have to be and in today’s high-tech world, it may actually be one of the worst ways to make business payments. There are plenty of obvious and hidden costs associated with check-writing. Many business owners do not even think to examine these costs as they are not aware of any other way to make and track payments. However, researchers have found that each written check can cost a company between $3 and $5, […]

The major credit reporting agencies are being forced this summer to change some of their data collection policies, a move likely to buoy personal credit scores and give small business owners access to more business funding. Because of a 2015 settlement with the New York Attorney General, the three major credit bureaus – Experian, Equifax and TransUnion – are altering some of their policies that will affect the credit scores of millions of Americans. Before the settlement, the big three agencies […]

Among the more recent additions to the business financing scene is the microloan. Microloans are small loans –typically ranging between $500 and $35,000 – that require less paperwork and have less stringent underwriting standards than traditional small business loans. They do charge slightly higher rates and fees but when only a small amount of cash is required, they can be just the thing to keep a business going. Most microloans are made by nonprofit companies who are interested in helping […]

Having enough cash on hand – working capital – to pay for day-to-day operations is essential for creating a successful small business and yet accomplishing that task is actually much tougher than it sounds. It will require some careful thought and planning. THINK BIG Start by making some long-term plans and projections for your business. You need to have a very good estimate of how much money you plan to bring in over the course of a month and during the whole year. You should also think through […]

You have a small business loan with a high interest rate. Your firm does better than expected and you have the money to pay it off early. While an early-payoff may seem like a no-brainer at first glance, there may actually be some good reasons NOT to finish off that loan as soon as possible. Increased APR Unlike most car loans and mortgages, many small business loans do not fully amortize. With an amortizing loan, the principal and interest are both spread out over the term of the loan, with […]

People have great ideas for new businesses all the time. And yet only a tiny portion of those people ever make the transformation into entrepreneurs. What is the main deterrent? Business funding. Creating a start-up business can often require a significant amount of upfront cash. It can be difficult to find investors for a business that is only in the idea phase, and banks especially do not like to take on such risk. While friends and family can be a good source of business financing, potential entrepreneurs […]

Small business loans from traditional banks and lenders are often considered the gold standard among business owners. They typically offer the lowest interest rates, the most generous loan terms and the highest dollar amounts. One of the long-standing drawbacks to traditional business bank loans, however, is that they often take weeks or months to secure. The application process can be tedious and resource draining, and even when a business owner has the good credit and assets to qualify, he may […]

For young and rising companies in search of business funding, there is no one-size-fits-all option. Venture capital and business loans are two of the most desirable choices, but they are not equally beneficial choices in every situation. There are significant differences between when each is a good fit for a growing firm. Venture Capital Seeking out venture capital is best for businesses that are young but also have the potential to become huge both geographically and financially. Venture capitalists […]