Category Archives: Business Loans

Some Hotels are Getting Back on Track with These Ideas

The hotel industry has been through much turmoil and with the markets re-opening, some have seen a strong return of business, while many haven’t been so fortunate. The market is open again but the dynamics are indeed very different today and this is something virtually all businesses have to live with and must adapt to,in order to sustain and grow.

This article discusses six ideas which are seen helping hotels across the world get back on track. These ideas are practical, effective and while some might be seen as simple common sense, being conscious of them and implementing them is probably what is more important than the ideas themselves.

1. Enhance Flexibility

Unless your hotel is seeing high occupancy rates, providing flexibility in terms of check-in and check-out timings, length of stay, stay inclusions, etc. is one of the ways in which you can increase the customer interest in your hotel. And with enhanced flexibility, it is additionally important to ensure that all flexibility is features on all distribution channels that can enable your hotel to take advantage of such features.

2. Refresh Your Online Marketing Strategy

In the post-pandemic era, online marketing that was already very effective, has simply eclipsed all other media of marketing. The world of online marketing evolves very rapidly and what worked then – before all the turmoil – might simply not work again.

It is hence critical to understand the new dynamics of the current online marketing channels and refresh your online marketing strategy in accordance to what works now.

3. Target a New Audience

Some of the popular ways in which hotels target new audiences include:

Adding new services and features that attract new audiences
Using targeted advertisements
Revising tariffs
Repositioning your brand
Using new marketing strategies
Using different channels of distribution

4. Add Trending Services

In today’s world, trend is a friend as close as it’s never been before. Thanks to social media and search engines, trends influence the decisions of many buyers very significantly. Understanding what’s trending within your relevant and potential audiences can be an effective way to cater to those audiences when combined to the right marketing strategies.

5. Consider offering Package Deals

As a hotel, it’s likely that you already offer packages which help you with suggestive selling, upselling and cross-selling products and services. If you’re not already offering packages, it is probably worth considering to do so and if you’re already offering them, it could be a good idea to revisit what you offer and how you target the potential customers for what you offer.

6. Partner Up

Partnering up with various other business can help you reach out to an entirely new audiences. Partnerships can be made with credit card providers, banks, airlines, nightclubs, travel agencies, magazine publishers, and so on. Getting into such partnership deals may require some initial efforts and the right calculations with the right deals and right partnership deals often work out to be meaningful and useful, leading to mutual benefit.

Financing the Business Ideas

We’ve discussed six effective ideas and there’s no doubt that there could be an infinite other useful ideas too. But if funds are what you need in order to implement any such ideas in your hotel business, we invite you to get in touch with us or directly apply for a business loan from us at Business Capital USA. Once in touch with you, our team of business financing experts will work with you towards a suitable loan offer that could help your business get back on track.

How to Start a Business when you have Bad Credit Scores

Starting a business can be challenging when you have a great credit performance. If you however have a bad credit performance or poor credit scores, the challenge can be exponentially bigger.

Why? Well, a bad credit performance can lead to multiple issues, some of which may include:

Difficulty in finding funding options
Create supply and utility problems
Negate options of credit facilities from good suppliers and service providers
Increase real estate rentals or reduce the number of options available to you
In some situations, bad credit may just be the reason you may not be able to start your business at all

Here, we discuss some practical tips that may help you start a business while you suffer from bad credit scores.

Verify Your Credit Reports

One of the first things you should do is to verify how authentic and complete your credit reports are. It is not always the case that your credit reports are flawless. Sometimes, one or more wrong or missed entries do feature and these may be enough to solve certain credit problems you face.

If there are any such issues, you can write to the respective authority and supply evidence for your case. Typically, such issues get resolved in a few days’ time.

Consider Credit Counselling

Improving one’s credit performance and healing bad credit scores can open a lot of doors and in some situations, be an almost invaluable decision towards your business health. Although good credit counselling may get expensive and working towards healing bad credit scores may be even more so, it might all just be worth the expenditure.

Formulate a Business Plan

When you suffer from a bad credit performance, any business plan made should be designed being mindful of this. This may require you to find those rental options, utility options, suppliers, funding services, etc. that accept working with individual business owners with bad credit scores.

Since many of the best options may not be available to you, you might just have to start with what’s available to you and then either keep your business finances absolutely separated from your personal finances or work strategically towards improving your credit score.

Establish an Initial Source of Funding

No matter what your credit performance may be like, you are going to need a source of funds to start your business. Since most loan options for start-ups and new businesses may not be available to bad credit borrowers, the typical funding options available would include:

Personal savings
Borrowing money from friends or family
Crowd funding
Loans against assets

Identify Valuable Assets

In many cases, until a business is operational and established to an extent, loans secured against assets may be the only option available to bad credit borrowers. For being able to secure such a loan, business owners would have to identify valuable assets and ascertain their values. This task can be a part of the business planning stage and it can in fact impact the business plan to a great extent in certain situations.

Consider Easy Alternative Business Loans

Once your business is established to an extent, you may qualify for a loan from an alternative business lender. At Business Capital USA, we make business loans easily accessible to borrowers whose business has at least 6 months in operation with a steady monthly cash flow or at least $5000 in monthly revenue. Qualifying for our loans does not depend upon your credit history or scores, so even with a poor credit score, you can apply for the loan as long as your business meets the qualification requirements.

Apply for a Loan with Business Capital USA

We have made the loan application process lean and simple, so that your business can benefit from a quick and convenient funding option. Just filling in the online loan application and submitting the necessary details, shall help us understand the basics of your business and get in touch with you, to work towards a suitable loan offer for you.

Using Alternative Loans to Address a Business Crisis

It is quite safe to say that no business model can be crisis-proof. No matter how much hedging against risks, diversification, automation, safety and liquid availability of funds may be integrated into a business’ portfolio, one can almost never be too safe. Cash or liquid funds, often act as the main tools that a business can use, when addressing a crisis situation. Many businesses today, choose alternative loans when in need of added liquid funds.

What are Alternative Loans?

We at Business Capital USA are a direct lender of alternative loans. These are loans available to businesses from a lender that operates independent of banks or other institutional lenders.

Certain advantages can be offered by alternative lenders:

Acceptance of bad credit history and scores
Quicker and simpler loan processes
Convenient qualification terms
Flexibility in repayment plans
Higher chances of loan approval
Personalized customer service

With Business Capital USA, all the above advantages can be accessible to you.

Keeping Your Business Safe with Access to Emergency Funds

It is one thing to block an amount of funds for the purpose of addressing business emergencies and another thing entirely to have an access to an external source of funds that can be used for similar purposes.

Since not all emergencies can be covered through such savings and because it isn’t healthy to block cash beyond a certain limit, many businesses choose one or both of these options as an answer to any such situation:

Having a business line of credit
Choosing a trusted alternative business lender

What Crises do Businesses Tend to Use Loans For?

Businesses can face many kinds of crises depending upon the industry they serve, the business model they operate on, the scale, the location and various other internal as well external factors.

Most frequently, business crises are of one or more of these kinds:

Financial crisis
Personnel crisis
Organizational crisis
Technological crisis
Natural crisis
Accidental crisis
Workplace violence
Terrorism, Theft, Vandalism, and other disasters

The Risks Involved

Alternative business loans – like virtually anything related to business – come with certain risks. Common risks that are associated with such loans include:

Higher interest rates
Lands given out with fewer verifications and restrictions
Unsecured loan may include personal liability
Lender incompetency

Get an Alternative Business Loan Online

If you’re looking for an alternative business loan to address a crisis or a business emergency, choosing a reliable and renowned online lender could be the best solution. We at Business Capital USA provide a quick and reliable solution for business funding that you can access at any time using our online application. Applying for a loan simply takes a few minutes and shortly after we receive your application, an expert from our team shall be in touch with you. Most business loans are processed by us in a matter of 2 business days.

Effectively Investing Loaned Funds towards Digital Marketing

No matter where your business is located and what industries it may serve, today, it is safe to say that much has changed in the global, national and every local business environment lately. Some changes might be temporary while many may have lasting or permanent effects. Marketing is one of the important aspects of running most businesses and good marketing includes strategies that help evolving a business in ways that can help it better suit the times, no matter what they may bring to the table.

While recent times have proven the importance of virtually everything digital, digital marketing probably tops the list in many ways, for many businesses, so here we put out some basic outlines which any business can benefit from, while planning to invest loaned funds towards digital marketing.

It often Takes Money to Make Money

At least when it comes to marketing, this statement indeed is largely true. With regards to marketing, it does indeed take money to make money in almost all cases. The right investments in strong and creative marketing campaigns, teams, etc. can indeed bring valuable returns to businesses.

However, getting it all right is where one’s focus must be. For example, spending loads of funds in a newspaper ad for a rock music album is very less likely to help the seller grow. A digital ad with targeting done to the wrong audience, shall also have much the same result. What to invest in, how much to invest, and how to best utilize funds in marketing are questions that can make all the difference. So, while it does take money to make money here, spending money on just anything and everything that sounds like marketing is an easy way to lose all the money!

For Small Businesses, Nothing Beats Digital Marketing

When you have a limited amount of funds for marketing at your disposal, digital marketing is exactly the route you might wish to take. Why? Well, reaching the right audience and measuring how your marketing is working so you can keep refining it and making it evolve with time is best done with digital marketing.

Whether you do your own marketing, have your own team or choose to work with consultants, digital marketing is a constantly evolving environment that provides unmatched flexibility, data, targeting, appeal and much more. Getting it all right may take some time, but once you start getting it right, you can unlock a power that’s simply unmatched by other forms of marketing.

Keeping Up is the Name of the Game

The digital marketing environment is constantly evolving at a pace like none other. New features, policies, limitations, options, platforms and a lot more change virtually on a day-to-day basis. Any business can benefit by considering the trend as a friend and use it to their advantage to grow. And not staying up-to-date with trends can be an easy way to get obsolete and lose out on many of the most cost-effective marketing tools that you could have.

Grow Your Profits Larger than your Loan’s Interest

When you take a loan and invest the funds towards almost any expense item, what you want to ensure is that the absolute growth in your profits that are considered as a result of the expenditure, are greater than the funds that you have to end up returning in the form of the loan repayment, which include the loan amount and any interest and fees associated with it.

The great thing is that it’s much easier to estimate what returns a digital marketing effort brings, versus any other form of marketing. And what’s even better, is that measuring and understanding the outcome of your business’ digital marketing efforts and continuously working towards improvement and enhancement, is in fact largely considered by experts, as the best way to increase the effectiveness of your digital marketing.

Secure a Business Loan for Your Digital Marketing Plans

Digital marketing is considered for many reasons, a great investment for businesses within most industries. If you’re looking for a quick business loan that you can invest towards your digital marketing, Business Capital USA is here for you. We are an alternative business lender, offering flexible business loans which your business can choose to use towards the funding of digital marketing. Apply with us and a business loan can be yours within as little as 2 business days!

How our Business Loan is Helping some Businesses hit by Disaster

Less than a couple of years ago, if one were to narrate a story like what we’ve all been through in the recent past, it would ridicule the listeners, who’d simply dismiss it all as if it were an impossible fantasy story. Sitting where we are today, our reality is very different from what most of us could’ve imagined.

While individual lives have taken an unexpected turn, businesses have seen turmoil like never before. Yes, exceptions do exist and some businesses have benefited greatly out of every disaster that came our way, the vast majority of the businesses are yet to see numbers even 80% as good as pre-COVID-19 times. Some businesses still have their doors shut while others haven’t seen a profit in over a year.

We at Business Capital USA are an alternate business lender offering a reliable solution to eligible businesses that seek funding, even if they’re rejected by traditional loan lenders and disaster loan schemes.

Why Other Disaster Loans are Rejecting Applications

Some disaster financing plans and loans have highly subsidized offers while some are simply used as marketing tools by lenders. Either ways, a lot of applications for loans are pouring in, while the lending agencies/bodies are not in a position to meet the demand – there exists a huge gap in the supply and demand. This is probably the primary reason why many disaster loan applicants are facing rejection.

Beside this, most such loans require much paperwork and some also require concrete evidence to show that the business is affected negatively by the various incidences that have occurred. The number of formalities involved, makes the process cumbersome and also reduces the chances of the loan request being approved for some of the businesses that apply for it. Some business owners also back-out mid-way during an application, owing to the complicated application process.

Traditional Loans have a low Approval Rate

Traditional lenders like banks typically approve 3 out of 5 loan applications that are complete. Of course, the intimidating paperwork doesn’t encourage every applicant to complete the loan application.

Despite these low approval rates of loans, these traditional lenders see a fairly huge demand and the reasons for that are known to be affordability and reliability. Since alternate business lenders tend have a higher risk associated with lending, the loans tend to be more expensive. At the same time, traditional lenders are typically large banks and other institutional lenders. Their scale and prominence makes them seem fairly reliable.

Business Capital USA provides Quick Alternate Loans ideal for a Business Hit by a Disaster

We at Business Capital USA are a direct lender of alternate business loans. We are have built our strong reputation in the market through years of work and dedication towards our customers. In these troubling times, we provide a quick solution for businesses hit by disaster and at discounted tariffs.

If your business is in need of funds that can help you sail through these tough times, look no further as we are maintaining a high rate of approval of loans and are able to complete the approval and transaction of loans in as less as 2 business days, despite a high volume of demand.

When Your Business Needs a Reliable Loan for an Emergency Requirement

A loan is only as reliable as its approval rate. Even in these challenging times, we are able to maintain an approval rate beyond 89%, which is amongst the highest in the industry. This makes us one of the most reliable sources of business loans in the market. Hence, if your business is in an emergency need of funds, Business Capital USA is probably the best place to get help.

Being quick and reliable, makes our business loans ideal for emergency requirements and if you’d like to take the next step towards the loan, you can simply start the process and apply for the funding. Most of the process is online and simply filling in the application doesn’t bind you to a loan or cost you anything. It just helps us with basic information to do a small verification and get in touch with you for working towards a loan to fulfil the needs of your business.

Business affected by Riots or Protests? Get Discounted Loans

Just when we thought that the market has started to heal from the damage done by COVID-19, we weren’t exactly ready for more hits. Yet, more did come, and this time in the form of riots and protests. Many businesses had to stay shut while some even faced direct damages. Many business owners agree that the timing could simply not have been worse than this.

At Business Capital USA, we know that many of these business owners are our clients and in the interest of being a considerate alternate business lender we see the rising requirement of loans and are offering lower than our typical rates to businesses that have been affected negatively by the riots and protests. Read ahead to understand the benefits offered by our grants and discounted loans offered to assist your business sail through yet another challenging time.

Disaster Loans from Business Capital USA

Any business impacted negatively by a disaster can face a temporary financial difficulty and we are here to help. In the period that it takes you to resume to the usual business pattern, we can provide you grants and discounted business loan deals based upon your business operating figures. All you have to do is apply for our loan and we shall make brief verifications and then get in touch with you to understand your needs and situation. Thereafter, our experts shall make you offers to match your requirements.

Choose our disaster loans and you shall get funded in a matter of 2 business days and we hope the funds help you get your business back on the track of growth.

Bad Credit? It’s not a Problem for our Business Loans

Bad personal credit history and scores are something that shall not just trouble you with your personal financial transactions, but are very likely to limit business borrowing options for you as a business owner too. Making matters worse, is the fact that during times of financial difficulties, most frequent borrowers tend to take further hits in their credit performance and lenders tend to make loan approvals harder.

However, when you choose a disaster loan from Business Capital USA, your personal credit performance is completely out of the equation. Our assessment only considers the finances of your business and provided that certain indicators still look healthy, we approve loans that can help your business get back on track. So, if you need a business loan while you suffer from a bad credit score, you shall need to look no further as we are here to assist you.

Quick Business Loans for Emergency Needs

Protests and riots can lead to times of uncertainty and oftentimes, a business may face a very urgent requirements of liquid funds that may find use in various ways like enhancing security, hiring added staff, etc. When a loan is what you need to handle such emergency expenses, what you shall need is a quick business loan that credits fast enough for the situation to be managed well.

Our quick business loans can be ideal for emergency funding requirements of businesses. A loan from us typically gets credited in 2 business days when all provided information is accurate and complete and the eligibility assessment is straightforward.

Rejected from an SBA Disaster Loan or Coronavirus Loan? Choose us for a Second Chance

Time and again when disasters hit our economy, state and federal supports and grants are made available to help businesses sail through the rough times. Amongst these is the well-known SBA disaster loan. While the terms of the loan are really friendly and welcoming, qualifying for one and being accepted isn’t always easy. Businesses have faced rejections on various grounds.

If your business has been rejected a loan, many other loans also get harder to secure. With Business Capital USA, this is not a problem. We welcome second chance loan applications and since we conduct no credit checks, you can also consider us your last chance borrowing source – even multiple rejections in your past do not affect our decision. Only your business finances and performance figures are what we consider for the approval of our loans, grants and funding plans.

So, if your business has been negatively impacted by riots or protests and even if a previous loan application of yours has been rejected elsewhere, then a disaster loan from Business Capital USA is available right here to help you find the funds that your business may need. Simply fill up our online application form now and we shall get in touch shortly to assist you.

Startup Business Loans – Getting Finance even with Bad Credit

Startup businesses are challenging and the challenge is often the best part of owning a startup. One of the common critical requirements for most businesses is the source of funds. The availability of funds or the lack of it, can in many cases make or break a business and this is typically more so for startups. However, managing a source of funds for a startup business is not always easy. For example, even startup business loans are not the easiest business loans to procure. On top of that, if a business owner has a bad credit score, that can further affect the availability of funding options.

Many startup business owners think of loans as the holy grail to fund businesses beyond their personal finances. However, there are more options that one can consider, and loans are probably best once the business stabilizes. Why? Well, loans have to be returned in time else they can start to get quite expensive.

For this reason, despite us being a loan lending service, we shall start today’s article with discussing 4 of the best funding options for a startup business, beside the business owner’s personal finances.

4 Best Funding Options for a Startup Business

1. Crowdfunding

This is probably the right choice for any startup business that can get what they need out of it. Crowdfunding is a concept in which people, or the “crowd” contributes for a cause – which in this case can be a business idea. Crowdfunding works best for businesses that plan to do something that is very innovative or can work towards the betterment of life of people. Any concept that can be convincing for people to donate money towards it is probably going to benefit from a well-made crowdfunding campaign.

People with strong social following or PR skills can use crowdfunding even better. For example, musicians with huge social media followership numbers tend to attract great results if they choose to utilize crowdfunding. The best part – donators only expect non-monetary rewards, i.e. they do not expect money in return for their donation. Of course, not all start up ideas would be able to attract crowdfunding or even qualify for it.

2. SBA Loans

Loan schemes like the SBA 7(a) (Loan for Start-ups and Entrepreneurs) and SBA microloans are reasonably safe given the protective terms laid out under the schemes. However, any financial product comes with a risk associated with it. What makes SBA Loans also tend to have more affordable rates of interest and fees that are associated with them, when compared to most other borrowing options open to businesses.

However, 2 prominent factors make SBA loans less attractive for some business owners:

It is not very easy to qualify for an SBA loan
SBA loan approvals can take a long time and the processes may not always be easy.

3. Business Credit Cards & Line of Credit Loans

Business credit cards and line of credit are available from some banks and non-bank direct lenders. These work much like personal credit cards – a defined limit is made available and interest is charged as per the amount of funds actually used. They give a ready source of pre-approved loan amounts that the business can use as required.

Again, these are not very easy to qualify for, but once you do, there’s a fixed amount of time until when the available limit is yours to use. For start-up businesses, these loans tend to typically be approved based on:

Personal finances of the business owner(s)
Credit history of the business owner(s)
Guarantor(s) if any
Collaterals (in case of banks loans).

4. Alternate Business Loans

Alternate business loans are offered by non-bank direct lenders like us at BusinessCapitalUSA. Within certain legal limits, direct lenders like us have an option to be more flexible and offer loans with which higher risks are associated.

Alternate business loans, at the direct lenders, can be made available for businesses owned by bad credit score holders. In the case of start-up businesses, these might be the only such options available to most. The other advantage is that trusted and experienced direct lenders tend to offer the advantage of quick loan approvals and transactions.

However, with higher risks come higher expenses and that feature of the market makes these loans more expensive than the other choices mentioned here.

Alternate Business Loan for your Startup

It’s time for us to throw light upon our services. If you’re an owner of a start-up business, you can get a loan from us if your business has seen a smooth financial journey for as little as just 6 months. We offer alternate business loans which are approved quickly and subject to eligibility to our loans, you can get the funds you seek in as little as just 2 business days.

The application process is very easy. You simply need to apply online or call us at 800-821-6460 and we shall require a few basic details to start working with you towards a loan that suits your business needs.

Startup Business Loan with Bad Credit, No Collaterals Required.

Most startup business owners seeking a business loan while they suffer from a bad credit score, choose a trusted alternate business lender like us at BusinessCapitalUSA. The 2 biggest advantages we offer include:

Bad credit score holders are welcome to apply
No collaterals required for the approvals of your loan applications.

These along with the fact that we can avoid credit checks upon your requests, make our loans very safe for borrowers who have a poor credit history.

So why wait? If you qualify for our business loan, go ahead and drop a query through our online application form!

Business Line of Credit, Working Capital Loans with Bad Credit

Today’s lending market has a lot to offer. From businesses that are worth just a few hundred dollars, to those worth several hundred billions of dollars – all have access to a number or debt options that may serve as the backbone, a stepping stone or simply a means to fuel smooth operations.

Businesses today use these various debt products for similarly vast number of purposes. While some businesses use debt to grow, expand and diversify, some may just be using debt to sustain through a tough season. And then there are investment and divestment related uses too – the list can simply go on and on in the ever-changing world of business.

There are two closely matched loan options which have been enjoying a high demand in the recent years. Some of their uses are common and some of their principles are similar. Today, we shall discuss these trending types of business loan products in further detail – Business Line of Credit and Working Capital Loans. We shall also pay special attention to understanding which of these products is better suited for a business, which is partly or wholly owned by an individual with bad credit scores.

What is a Business Line of Credit?

A Business Line of Credit is a type of business loan in which a lender agrees to keep an available limit of funds at the disposal of a business, out of which the business can choose to borrow any amount within the limit for any length of time and pay interest only on the borrowed amount of money.

As easily noticed from this above definition, it works much like a credit card and some lending companies may associate a credit card feature with this loan.

Businesses use such loans for day-to-day expenses as well as small capital expenditures at times. However, it is safe to say that largely, the uses of these loans are not significantly different from the latter discussed Working Capital Loans.

A major limitation of this sort of a loan, is that most lenders only offer this to small businesses when the owner(s) has/have a good credit history. Very select few lenders do offer such loans to bad credit borrowers too, but the associated charges and interest rates then tend to be very high, which leads to those loans being in limited demand. Apart from this, the line of credit is typically offered subject to a security deposit or a one-time fee, which tends to be higher than initial expenses related to most Working Capital Loans.

Advantages of a Business Line of Credit

The main distinct advantages of the Business Line of Credit for the borrowers include:

Interest only needs to be paid on the borrowed amount
The limit authorized, acts as a pre-approved loan amount readily available for borrowing at any time
Can be effectively used on small capital expenditures and to maintain a healthy liquidity and cash flow.

What is a Working Capital Loan?

A Working Capital Loan is a type of business loan that is intended to provide financial support for a business’ day-to-day operations/expenses. Typically, these are intended to cover operational needs and not to cover long-term investments, or for purchases of long-term assets, etc.

Expenses such as salaries, raw material purchases, emergency expenses, and other items that are typically what businesses use liquid capital for, are examples of what businesses commonly use such loans towards.

Working Capital Loans are offered to bad credit borrowers also, by some of the most trusted alternate business loan lenders, like us at Business Capital USA.

The more closely linked a business’ finances are with the business owner’s personal finances, the more the owner’s credit score and history may influence debt options available to the business. However, our business loans can accommodate requests from businesses owned by individuals with virtually any credit score.

Advantages of a Working Capital Loan

The main distinct advantages of the Working Capital Loans for the borrowers include:

Since the amount of money approved as a loan is being fully utilized, many lenders offer lower interest rates on Working Capital Loans than they would offer for a Business Line of Credit
Bad credit borrowers are more readily accepted by some alternate business loan lenders offering these loans
Many businesses prefer using these loans to maintain a healthy cash flow
This loan eliminates the need for collaterals – it is typically an unsecured business loan.

Applying for a Working Capital Loan for Bad Credit

Getting a Working Capital Loan is as such a rather simple task. However, a bad credit score can hinder some options. If you’re looking for a business loan while you suffer from the difficulties that bad credit history can endow upon you, Business Capital USA shall always be here to assist you and provide your business the funds it needs. Applying for a Working Capital Loan with us takes nothing more than just a few minutes. This online application can get you started and once we have the required information, we shall get in touch with you to offer you deals that can work well for your business.

Are Business Loans Based On Personal Credit?

Some Business Loans May Be Based On Personal Credit, but Not All Are

Before taking a business loan, you may wonder whether your credit score matters to lenders. It could affect their decision to approve your request.

The importance of your credit score in the approval process depends on which kind of lender you decide to approach.

Let’s go through who is most likely to require your credit score as a mandate and who isn’t:

Traditional Lenders: If you want a loan from a traditional lender, such as a bank, but you have a bad credit score, you may want to re-consider applying for one with them. First of all, it is almost impossible to get a loan from a bank if your credit score isn’t good; forget about it being average or bad. If they do, however, choose to give you a chance with their loans, there may be conditions for that.

One major condition that they may set forth is for you to provide collateral. Collateral refers to something valuable that you have to give as security. You give it to your lender, who asks for one. It can be property, a car, or anything that holds a price enough for your lender to cover your loan cost in case you fail to pay it. The disadvantage is that not every borrower has something expensive to use as security, even if you are 100% sure about repaying your loan.

The next disadvantage of applying with a traditional lender is that they conduct hard credit checks. If your credit score is already on the undesirable side, a hard credit check will only hamper it further. This can majorly reduce your chances of getting funded in the future, which isn’t the best situation to be in.

Online Business Loan Lenders: Many online business loan lenders do not need your credit rating to fund you. Their loans are aimed at small and medium-scale businesses. Traditional loans are usually offered on a large scale. It isn’t surprising for a small business owner to have a poor credit rating due to reasons such as not being established yet or taking small amounts from many lenders. These lenders know that a bad credit rating isn’t the deciding factor about whether a borrower will be able to repay them or not. Also, they do not ask for security, which is why it is very easy to get a loan from them. The only drawback is that the rates of interest may be higher than those of traditional loans.

Traditional Lenders: If you want a loan from a traditional lender, such as a bank, but you have a bad credit score, you may want to reconsider applying for one with them. First of all, it is almost impossible to get a loan from a bank if your credit score isn’t good; forget about it being average or bad. If they do, however, choose to give you a chance with their loans, there may be conditions for that.

One major condition that they may set forth is for you to provide collateral. Collateral refers to something monetarily valuable that you have to give as security to your lender, who asks for one. It can be property, a car, or anything that holds a price enough for your lender to cover your loan cost in case you fail to pay it. The disadvantage of this, even if you are 100% sure about being able to repay your loan, is that not every borrower has something that expensive to give as security.

The next disadvantage of applying with a traditional lender is that they conduct hard credit checks. If your credit score is already on the undesirable side, a hard credit check will only hamper it further. This can significantly reduce your chances of getting funded in the future, which isn’t the best situation to be in.

Online Business Loan Lenders: Many online business loan lenders do not require your credit rating in order to fund you. Firstly, their loans are aimed at small and medium-scale businesses, unlike traditional loans that are usually offered to large-scale ones. It isn’t surprising for a small business owner to have a poor credit rating due to reasons such as not being fully established yet or taking small amounts from multiple lenders. These lenders know that a bad credit rating isn’t the deciding factor about whether a borrower will be able to repay them or not. Also, they do not ask for security, which is why it is very easy to get a loan from them. The only drawback is that the rates of interest may be higher than those of traditional loans.

Figure Out What You Need To Help Plan Your Budget

It may sound very basic and simple, but first thing’s first. It is important to chart out your budget plan in an orderly manner to make life easy.

If you’re somebody who prefers doing things the traditional way then gather a couple of pens and notebooks for you to start writing a detailed your budget requirements in a detailed manner.

However, technology has undoubtedly made life easy for many in various aspects and a software like Microsoft Excel can be a user-friendly option. In fact, it may be a tad bit more useful than going forward the traditional way since saving documents on a gadget that is difficult to misplace- such as your laptop or computer- can come in handy.

However, the phrase “to each their own” does come into play here so it is important to choose a method that helps with your budgeting in the way that seems most convenient to you.

Make A List Of Your Costs/ Expenses

Once you’re ready with your tools, list down every aspect of running a business that needs investment, even if it’s something as basic or small as stationery. Prioritizing them from most important to most general can be a good idea. Some costs can be termed assets while the others can be called expenses.

Let’s have a look at your assets: These can include costs like real estate, furniture, gadgets, etc. Your assets aren’t usually tax deductible.

Let’s now take a look at what may be your expenses: Costs like payroll and rent/lease will fall under this category and are tax deductible.

Other costs may include those for your website, marketing , design, etc. that is a good idea to include in a separate list.

Figure Out Your Fixed Costs

Fixed costs are those that do not change on a regular basis because they do not depend on production and sales volumes. Things like rent or lease, payroll expenses, telecommunication expenses, advertising and marketing expenses, insurance, payment of subscriptions, etc.

Figure Out What Your Variable Costs Are

Quite the opposite of fixed costs, variable costs are those that fluctuate as per an increase or decrease in your levels of production. The best example of a variable cost is the raw materials that one purchases to run a business. Apart from that, a few other examples include sales commissions, electricity, direct labour costs (employees who work in the production unit and not administration or other departments of a company).

Monthly Revenue And Break-Even Point

Every business owner looks at earning a profit and if one doesn’t determine his/her budget and expenses appropriately then it can be difficult to achieve what one is looking for. After figuring out your costs, the next step is to estimate your monthly revenue and ROI in order for you to understand when you will reach a point when you start earning a profit. By figuring out your budget and investing it in the right areas, you may be able to reach your break-even point as per your estimation and desire.

Where Can You Get The Funds That You’re Looking For?

It is known that most start-up business owners have around $50000 or less in their bank account, which may or may not be enough to help fund their business. In case it isn’t, applying for a loan is the best way to go about it.

However, it may be a little difficult for an SME to get a small business loan from a bank which is why they can choose to opt for online business loans. Many online lenders offer amounts that are good enough to cover all your expenses and getting a loan from them is way easier than getting one from a traditional lender.

To start with, many of them do not consider bad credit as a reason to deny individuals a chance of getting funded by them. The requirement for collaterals is also not a part of their eligibility criteria which is a huge plus point considering the fact that most traditional lenders do ask for some kind of security in order to provide you with the financial assistance that you need.

However, the rates of interest of such loans may be higher that what may be offered by a bank, but the chances of getting approved and fast is also way higher.

By taking into account the factors listed above, you can plan your budget requirement in a satisfactory manner and understand what investments are most crucial for your business, at least in the beginning. For a start-up, you may want to consider putting a halt on fancy decorative items or other things that aren’t essential to avoid taking a bigger risk than is already involved in starting your business, but without a doubt, the decision is yours.

Take out a few days to figure out your costs and revenue and you will undoubtedly be good to go!