Why Choose Strategic Business Loans For Your Next Business Loan Application?
Running and managing your own business can be extremely stressful from all angles, but the angle of any business that tends to require the most love and care is that of the finances. Finances are a pain for anyone, but can be an extra pain for a business owner. Small businesses are things that should be celebrated, for they require tons of hard work, dedication, and, of course, a lot of blood, sweat, and tears. Oftentimes a great idea never comes to life due to a simple lack of funding. The entrepreneur/business owner skips out on their true passion, and the general public misses out on a potentially amazing product/service. Sometimes you’re able to come up with the money to kickstart your business – it’s the financial maintenance that becomes an issue. Selling or closing a business you’ve worked so hard to create is completely devastating.
Getting your hands on the business capital you need is simpler than you may think. At Strategic Business Loans, we take the time to evaluate your personal and business needs; we then match those needs with the capital that makes the most sense for the requests. Strategic Business Loans has no up-front fees, funding in as little as two days, rates falling as low as two percent APR (annual percentage rate), and options for pre-revenue startup businesses. The process is straightforward and effective. Users start out by seeing how much they qualify for. This is done by filling out the qualification questionnaire on the homepage of the website. They are asked about the funding needs for their business, along with the monthly gross revenue, credit score, and any assets belonging to the business and/or its owners.
Follow-up questions are asked regarding tax liens and any declarations of bankruptcy within the last ten years. The next step is to fill out the contact information and agree with the terms of service. At this point, the application is submitted and the business owner will be contacted by phone and/or email once pre-qualification is reviewed.
Upon review, a personalized capital agreement will be made to best fit your business and its needs. Business owners have the opportunity to obtain three different kinds of loans: asset business loans, revenue business loans, and credit LOC (Line Of Credit). Business owners will be matched with one of these kinds of loans.
An asset loan is a loan that is secured by collateral, or assets. Some of these assets include, but are not limited to, inventory, accounts receivable, and/or other balance sheet assets. This type of loan is also known as “commercial finance” or “asset-based financing.” Here at Strategic Business Loans, we evaluate many factors when providing an asset loan. The three main categories under evaluation will be A/R factoring/PO financing, retirement conversion, and securities LOC. Assets used under each category (in order) are accounts receivables and purchase orders, retirement accounts (401K or traditional IRA), and a securities portfolio containing any stocks, bonds, or mutual funds. The next point of evaluation is the asset loan qualifications. These are (again, in order) a minimum twenty-five thousand dollar asset value and a reputable debtor, a minimum of forty-thousand dollars in retirement assets and no Roth IRA, and a minimum eighty-thousand-dollar securities portfolio value, along with a minimum price of five dollars per share and no credit flaws within the last five years.
Next are the interest rates. Under A/R factoring/PO financing, the rates are as low as one percent; under retirement conversions, there is no interest, for it is not taxable; under securities LOC, the rates are between two and four-point-five percent. The amount of asset loans also varies depending on your category. In order, it will either be seventy to ninety percent loan to value of the assets, equivalent to the retirement asset value, or up to sixty-five percent of your entire securities portfolio.
The type of business requesting the business loan also depends on which category a business owner is placed under. A/R factoring and PO financing are associated with business involved in manufacturing and wholesaling; retirement conversion and securities LOC are both associated with a franchise purchase, an acquisition, or a start-up business. The pros of asset business loans, no matter what the category, are a flexible cash flow, inexpensive capital, and lower interest rates. However, there are cons in conjunction with the risks that come along with using things such as your retirement assets, business assets, and external funds. Asset business loans are a great tool for those who are willing to use their assets to help their business.
The next kind of loan is a revenue business loan. A revenue business loan is one that is based on the cash flow of a business. There are two categories that fall under the revenue business loan umbrella: term loan and fast fund. A term loan is generally for people who cannot be considered “bankable,” meaning that they are not reliable or guaranteed to bring profit and success. There is a minimum gross revenue of twenty thousand dollars per month, a minimum credit score of six hundred fifty, and a minimum of one year in business. The rates fall anywhere from five-point-five percent to twenty-six percent and loan amounts range from twenty thousand dollars to five hundred thousand dollars. Term loans are primarily meant for established businesses with a financial need for business growth or with a cash flow crunch. Funding with a term loan can be provided in as little as seven days and can be paid back over a period as long as five years.
However, a term loan can also result in interest rates higher than those that the bank may provide. In contrast, a fast fund business loan is based solely on revenue with the same gross monthly revenue as a term loan, a minimum credit score of five hundred fifty points, and a minimum of only three months in business. The interest rates here are significantly higher, ranging anywhere from eighteen percent to fifty percent, with the same business loan amounts as a term loan. All industries are considered for a fast fund business loan and funds are receivable in as little as two days with minimal qualifications. The main con associated with the fast fund business loan is a high capital cost. Revenue business loans with Strategic Business Loans are a great solution for businesses with decent existing cash flow.
The last kind of business loan offered here at Strategic Business Loans is a credit LOC. A credit LOC helps business owners leverage their personal credit in order to obtain stated and unsecured income. There are three categories sub-LOC: foundation credit program, SBA loan, and equipment loan. A foundation credit program is mainly considered for corporate credit cards with a minimum asset value of twenty-five thousand dollars and a minimum credit score of six hundred eighty. Rates fall as low as zero percent promo for up to twenty-one months, and then raise from thirteen to twenty-five percent after the promo with no retroactive interest. Business loan amounts are anywhere from twenty thousand dollars to two hundred thousand dollars. A foundation credit program is best suited for start-up businesses due to the low promo rates, capital and repayment flexibility, and the revolving lines for ongoing working capital.
With this type of loan, business owners must be sure to manage their payments and budgeting and adhere to any budgets put into place. An SBA loan, or small business administration loan, requires a minimum credit score of six hundred fifty with a ten to twenty percent down payment. Interest rates fall between five and ten percent, with loan amounts ranging from fifty thousand dollars to five million dollars. An SBA loan is generally a good option for any for-profit industry.
The cost of capital is fairly low, and the payment term can be as long as twenty-five years. However, an SBA loan can take longer to fund and complete documentation is required upon taking it out. An equipment loan is just as it sounds – it is a loan used for equipment. The minimum credit score for consideration is six hundred twenty, and is based on the borrower and the equipment. Interest rates are six percent and above with loan amounts of twenty-five thousand dollars to five million dollars. The main industries in consideration here are those involved in manufacturing, construction, and any large equipment. Start-ups may also be considered for an equipment business loan if all qualifications are met. Equipment business loans are great for financing categorically for equipment and for any businesses looking for a low cost of capital. However, many variables are considered and specs differ by borrower, industry, and type of equipment.
With all of the different business loan services outlined, it is important for the business owner to fully understand our two main financing options that all of these bits and pieces fall into. These are equity financing and debt financing. Equity financing is giving a percentage of ownership in your company to someone else in exchange for a certain amount of funding. This is typically less common due to the fact that private equity financing is done with companies that have proof of existing sales, a certain profit margin, and a certain amount of revenue. Debt financing, however, is something that more businesses can qualify for than any type of equity financing. Additionally, debt financing allows the business owner to utilize multiple solutions at the same time, allowing for maximum flexibility and minimal hassle. Before pulling the trigger on which type of financing is right for your company, consult Strategic Business Loans to ensure a fully educated and well-informed decision.
So, what are you waiting for? Go ahead and submit your information and we’ll help you find out which business loan will be best for you. This will not affect your credit score.