Being a small business owner, it is never easy to get a small business loan, as most lenders would consider you as a borrower with unstable income and poor credit. Justifiably, as most small business often do not have a steady flow of income in the initial period and run on low profit, it actually becomes a challenge for the owners to pay off their business loans. Most financial institutions and banks are therefore not very enthusiastic about lending to these small business owners and are concerned about their ability to repay.
However, the good news is that there is a group of lenders who would not like to let go of this increasing market segment of small business borrowers and they have devised a lending scheme that fits the requirements of the small business owners.
You can use these small business loans for expansion of your business, purchasing new tools and technology or even to meet revenue expenses like paying wages or buying raw materials.
Apprehensive about the increased risk involved in lending to small business owners, these lenders would always take sufficient measures to cover against any probably loss. In most cases the small business owners would be required to keep an asset as the security for the borrowed amount.
Small business loans can be either for short term (ranging from few months to a year) or long term, which can be repaid over a longer period that might stretch even to 20-25 years. The small business entrepreneur needs to decide on this repayment period and other terms and conditions depending on their specific requirements.
The most important factors that most small business owners should consider while deciding on a loan is the flexibility of repayment. As most small business would experience irregular income for some period in its life cycle, a flexible repayment schedule can be immensely helpful.
There are lenders that offer extreme flexibility in terms of amounts paid towards repayment as well as any pre-specified period of repayment. This helps the small business owners to make repayments for any particular period based on their income during that period.
As there is no specific pre determined amount to be paid, there is no question of underpayment or further interests being applicable. However, it is very difficult to find such a lender who will be so sensitive to your financial condition and offer you the highest degree of flexibility.
Alternative to small business loans there are many other companies that are offering business cash advance to small business owners, where they are not liable to repay. Business cash advance is not a loan and the organization offering this cash advance gets their money from the credit card sales that the business does in a specific period, thereby reducing the burden of paying back the loan and the terms and conditions to qualify for such cash advance are also relatively simple.
With this increasing number of sources available for small business funding it is high time that you unleash the entrepreneur in you and give shape to that dream project you have in your mind.
Ray Smith- a marketing expert with years of experience in different industries and specialized knowledge on branding and Internet marketing.