Do you own a small business and have financial needs? Are you worried about there being a lack of credit due to the financial crisis? To get a loan for your business, you should plan your strategy carefully.
* First determine what your financial needs, including the amount of money needed and how long it takes to pay its debts.
* Determine the type of loan you need: credit line, term loan, leasing for cars, credit cards, etc., And the type of creditor who can attend, which may be an agency microfinance and ACCION USA, a credit union, a commercial bank or a venture capital fund.
Depending on the level of development of your company, you should explore various financing options. Many experts identify four stages of development in small business:
1. During the first stage, companies are considering new enterprises.
2. In the second stage, companies have a business plan and samples of their products, but very little income.
3. In the third stage, companies are growing and executing its business plans.
4. In the fourth and final stage, companies have been operating for some time and already have records of your income and expenses.
Financing alternatives for businesses in parts one and two
For companies in the first and second stages, or for business owners in the third and fourth stages with weak credit histories, loans from alternative sources such as micro-finance agencies can be more accessible. For example, in ACCION USA credit history and the lifetime of the company are not the only factors considered when evaluating loan applications, also takes into account the nature of the applicant.
Financing alternatives for companies in stages three and four
For employers in stages three and four who have a solid credit history, financing from a bank or a traditional loan may be more economical. Apply at banks where you have a previously established relationship. If you do not have an established relationship with a bank, you can ask an accountant or attorney with experience if it can connect to a bank on your behalf to submit a proposal.
Given the current financial crisis, including applicants who have businesses in their most developed state may be rejected in their applications for loans, which makes micro-finance agencies, credit unions and venture capital funds are increasingly sources attractive financing.
Note on credit cards
Credit cards are also a common source of capital for companies at all stages of development. An advantage of business credit cards is that they can be used to manage cash flow, as the company’s owners and employees have the option of using cards to pay for expenses that require immediate payment. In fact, banks are encouraging credit applicants who were unable to access traditional credit using credit cards as an alternative. However, you should always use credit cards with extreme caution, because the annual interest credit cards are typically higher than interest on loans, and hidden fees are common.
Independent of funding source, business owners must have 100% clear about the requirements of the creditors, and fully understand the application process before making an application.
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