As a small business owner, you may encounter financial stress from time to time – not because you’re an incompetent businessman/woman – but because of factors that you have no control over. If you find yourself in need of funding for your business, there are several options available to you. But how do you what type of small business loans you should apply for, or which type of business funding is best for your particular situation or need?
Read on to find out about different types of business loans made available to small business owners such as yourself.
Small Business Loans: When Traditional Loans Just Won’t Work
Before you start worrying about applying for a business loan with your bank, you should first assess if a traditional loan is something that you need. Many business owners require cash on hand for various things. For example, if you find yourself in need of working capital to fix or replace equipment right away and can’t wait 30 to 45 days for a loan application to be approved with your bank, a non-traditional loan is a better option for you.
When to Consider a Merchant Advance
One of the easiest and fastest ways of obtaining funds for your business is a merchant cash advance. Because this option bypasses the traditional credit check and underwriting, you can have your funds in as few as three business days. In order to qualify, you’ll need to have a business based in Canada, with average monthly credit card sales of $5000 or more, and have to be operational for at least six months. Customers pay a fixed percentage of their daily sales, so repayment reflects how well they are doing in their business. The day you earn more, you’ll be paying off your loan faster. During slower days, customers find themselves at ease because repayments are more affordable.
Small Business Loan When to Consider a Non-Traditional Term Loan
Online lenders, such as Kingsmen Capital, offer term loans and small business loans that differ from traditional loans provided by banks and other conventional lenders. Whereas most banks and lenders will examine your credit report long before looking at your overall business, thereby denying anyone who has less-than-stellar credit, non-traditional lenders are different. They consider various aspects of your business such as how long you’ve been running your business, monthly credit card sales, and even the industry in which your business operates under. All of these factors help online lenders assess your ability to run a successful business and repay a term loan.
Preparing to Apply for Small Business Loans
Applying for small business loans through online lenders is easier and faster than traditional banks and financial institutions. You don’t need to supply a lot of paperwork when starting an application for a merchant cash advance or a term loan. However, some information that you will need while filling out an application include:
- Your basic business information;
- Your processor information, or merchant ID number;
- Your most recent bank statement associated with your business;
- A government-issued ID; and
- A void cheque from your business account.
- In some cases, and depending on the amount of financing for which you apply, you may need to provide additional documents.
By far, the simplest and easiest way to obtain a business loan is through an online lending service like Kingsmen Capital. With two different options from which to choose, no credit check, and flexible repayment terms, it’s a great way to get funding when you need it the most. Contact one of our advisors today to get your applications started!