Facts and Findings of Business Loans

Business loans can be the lifeline of any kind of business from small shops to large showrooms and home based manufacturing companies to large manufacturing companies can need extra cash to keep business operations moving. Normally loans for business purposes are provided by banks. Banks tend to offer loans to those who can meet their strict criterion which is basically an assessment of applicants' loan returning capacity. The banks review the applicants past records, credit history, current assets and liabilities to determine the likelihood of repayment before approving the loan amount. The bank offers a fixed loan amount irrespective of what actually maybe needed because it relies on its findings rather than the necessary commitments the funds were applied for to meet.

Business loans are also offered by various financial institutions. Numerous financial companies provide cash in hand against the businesses gross monthly sales. These institutions are also guided by a set of requirements but they are less stringent than those of the banks. Small businesses that find it difficult to get approved for money from the banks can approach these financial institutions and receive a loan with a good sum of money. These companies can tweak their rules to favor their customers because they are more aggressive in distributing loans than banks usually are. This is most likely the reason why financial institutions are preferred by businesspeople for obtaining business loans.

A quick survey of the process for obtaining business loans from financial companies as well as from the banks can reveal why people rely on them for money. The financial companies employ a user friendly loan process; however, the banks follow a cumbersome procedure which not every businessperson can understand or follow.

The time it takes for processing and approving a loan is very crucial and financial institution score high marks in this criterion. Banks may take any number of days or weeks to give a decision on approving a loan but private companies assert that they can provide loans in as little as hours. The conditions set forth by private companies are easier to meet and are reasonable while banks sometime make tough demands which many businesses can't meet.

The interest charged on the amount of the loan by private institutions and banks are similar.

These are some of the reasons why businesses are choosing companies that are providing private business loans over bank loans. Business loans are a necessity and business owners are less concerned about who is providing them the loan. They will approach the financing institution which provides them with a quick loan at reasonable interest rate. Financial institutions check the current economic health of the business before approving the loan. If the business is doing well then they find no reason to deny the quick loan.

Robert Ellenbecker has been associated with the banking industry for a long time and today he is an authority on micro finance. His articles on business loans, cash advances and credit card processing are informative and make a good read. For more information visit Business loans.

Available Business Loans

Business loans are directed towards business owners to help expand or start up a business. The banks offer loans between £1,000 and £25,000. Typical repayment periods for the loans are between 10 months to 10 years, depending on your financial situation so there is quite a lot of flexibility.

One of the biggest advantages that the banks offer is the fixed interest rates they offer for the life of the loan. This fixed rate then puts less worry to the person taking out the loan as they are not going to be paying any more back then the rate that they currently agreed with the bank to start with.

One key feature that most banks offer when the loan has been agreed is that the loan will be paid immediately into the account of the person taking out the loan, usually the loan that you agree to take out is credited to you the same day as agreeing taking out the loan.

One of the biggest assets to small businesses are business overdrafts, these overdrafts are great for short term fluctuations in cash for small businesses that may need extra cash at some time, maybe to buy stock or help expand the business

Of course shopping around to find the best loan rates is advised but beware that not all banks offer fixed rate loans, a comparison website is the best bet as it will allow you to compare all the different loans from all the different banks on one simultaneous page, a lot quicker and more efficient,

Another tip for getting a loan is to get an appointment with your current bank manager and inform him of your current need and see if he will do you a special deal or rate so that you stay with your current bank, usually they will value your custom a lot more if your already with the bank and looking to stay with the bank.

So as you can see there are many advantages to getting a business loan, advantages that most people wouldn't think are there, but finding te right deal for you is the trick, there are plenty of places to find the right deal, it's just about looking in the right place to find it.

If your after just a small amount of capital you may be entitled to help from the government, there are schemes to help businesses get through the times that are key to the growth of the business and the government like to encourage this with giving support in various ways. There are leaflets on your local council website that will explain what there is available and how to go about getting it.

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Giving Your Business a Boost

When you are the owner of a small or medium sized business, having a constant cash flow is essential. You will need this to balance your inventory, pay your suppliers and your staff as well as expand the business when it is required. Considering that the aftermath of recession still prevails, securing a business loan can be a long and tedious process. One of the ways in which to get around this problem is that of a merchant cash advance.

A merchant cash advance is an alternative source of funding for those businesses who may not have the credit rating or the collateral necessary to approach commercial banks for a loan. The merchant cash advance is based on future sales that you will make with credit cards being accepted as the mode of payment. You get a lump sum which you benefit from immensely and then repay in the form of percentages off your monthly sales figures.

There are several advantages to a cash advance and the first and foremost one is that you do not have to worry about eligibility. You do not have to have a fantastic credit history nor do you have to put forward a collateral. This way you can also save on losing your collateral should you default on payment. The next thing is that the process one has to go through is rather simple in terms of application and actually receiving the loan amount. There are only two criteria that are taken into consideration - your monthly credit card sales has to be above $5000 and you have to be in business for a minimum period. This can be 3 months to 1 year depending on the lender you approach.

Since there is a minimal amount of paperwork involved the turnaround time to actually receive the loan is rather fast. With a commercial loan you could end up waiting for more than a month in some cases, whereas with a cash advance, everything will be done in a week's time. Also, the approval rate for such loans is much higher than that of commercial loans. Any business that can prove its stability will be able to qualify for a loan. And finally, the repayment of the loan is revenue based. So when you collect your money in the form of payments, you pay back the merchant loan in percentages.

This form of a loan has come as a quite a relief to small business owners who often need cash quickly for help sustain their business.

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Major Benefits of Using Commercial Farm Loans

Farming needs numerous work hours, dealing and fighting with frequent weather changes, and the risk of the unknown is always present. It also needs a huge initial investment and additional extremely operational costs. That is the reason why it is a smart idea for existing farmers to opt for commercial agricultural loans. There is nothing as good as getting an opportunity to have the required amount to take care of your farms and its low and long-term fixed rates make it a win-win option for farmers. This way, they will get an opportunity to budget all their farming needs and requirements and fulfill farming related operations. The most significant reason behind taking a farm loan commercially is that the payment remains fixed. There are many types of financing options and loans available and a lot of companies are present that specialize in this particular sector only.

Commercial farm loans and farm land financing provided by various financial institutions include loans and finances for horse operations, commercial farms, ranches, vineyards and agricultural facilities. Some significant benefits and important aspects include:

Commercial loan providers offer lowest rates on loans with minimum fees

They give personalized and experienced loan processing, which automatically increases your borrowing potential

Various providers also give zero income verification loans beginning from $300, 000

The least amount of these loans may begin from $100, 000

There are absolutely no prepayment penalties, which makes the deal extremely beneficial for the farmers

No maximum acreage limitations makes this option pocket friendly

In order to apply for farm loans, you need to have a credit of just 620

A lot of providers also offer a farm operating line of credit up to 7.5 million, which is of huge help

Commercial farm loans are provided by a lot of top financial institutions and providers. The least loan amount is often fixed, however, maximum amount is never fixed. These loans have a time period of around 15-30 years and they can easily be amortized up to a most of 30 years with any external pre-payment penalties. Most commercial loans and financing require payments to be created either annually or in 6 months' time and the duration depends solely on the needs and requirements of the farmers. Some significant operations that qualify for these loans include:






Other similar agricultural productions

A lot of providers are available online that deal in agricultural loans, all you have to do is make a correct choice.

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Construction Finance Fees

Although us brokers like to save you time and money we cannot arrange finance for you that is free. At the same time we know that borrowers are not keen on paying for lender costs and certainly want to keep them to a minimum. With any construction finance application you will have to pay fees for the following:
Valuations. Any lender will need to check the figures for the current and end value of your building project. Although you will have done your own research and will have a good idea of the likely Gross Development Value of the site the lender cannot and will not take your word for it. Loan to value plays an important part in the underwriting process and so a difference in opinion of value can be a deal breaker. With this in mind it is important that your figures are realistic so that you do not waste your time searching with us, for building finance. The cost of the valuation will vary depending on the sort of property being valued but most lenders will only charge you the cost of the report, which would typically be £1 per £'000 of property value.
Specialist reports. Most lenders will employ the services of either an Engineer or a Quantity Surveyor. These professionals will carry out various reports to assist with underwriting of a project. The construction finance provider will be an expert in lending money but not necessarily in the actual build process so a helping hand is often required. Again, the borrower will need to cover this cost but it can also be of use to the client as an Engineer, for example may point out issues that are better sorted at the start than the end of a build.
Arrangement Fees. Although some bridging lenders will not have an arrangement fee the vast majority do as will all specialist development finance lenders. Typically fees will be 1.5 - 2% and is normally added to the loan, being charged on completion. Some lenders will want to take part of their fee on acceptance of offer or to progress an application beyond agreement in principle, just so they know you are serious about taking their finance. Arrangement fees are an industry standard and should just be looked at as an inevitable cost of borrowing money. You are building or converting a property to make a profit but you cannot forget that the lenders providing the money you need also want make a profit.
Exit fees.This is another industry standard. Specialist providers generally lend over a relatively short period of time and to make the exercise profitable will want to charge a fee for you to exit the facility. This is one area of finance that can vary quite widely and is a very important consideration when choosing a product. Some lenders will want to take 2% of the Gross Development Value, for example, while others will take an additional months interest. This can have a huge impact on the overall cost of finance as highlighted here. Lenders charging a percentage of G.D.V. will attract clients with lower interest rates but the cost of the facility as a whole can be the same, if not more, than a higher interest loan due to the amount of money paid out at the end of the loan period.
Fees to borrow money are not new and will not be going away, you have to remember that if you want the funding you need to pay the lenders' costs.
So, while you want to keep your construction finance costs as low as possible you should recognise that a profit of tens of thousands or even hundreds of thousands of pounds is worth paying for - that said there is no point paying unnecessarily high costs so get in touch with a broker and find out how they could save your project money and add to your profitability.
If you are looking to start your next project and need funding, get in touch with a company that can add value to your proposal, save you time and more importantly money.

Securing Development Finance

Development finance certainly saw some significant changes in the last three years when the number of development lenders dropped and funding became more difficult to obtain.

However, there are still deals to be done and still a number of lenders who are genuinely willing to lend. It's imperative to find lenders with enthusiasm. Brokers need to identify the right lender for the loan and ensure their client can meet the lender's criteria.

The development finance market is an area with growing demand for funding because the big banks still have no appetite for this type of lending at the moment. The lack of competition has led to relatively high pricing, which means there must be decent profit levels in each and every deal.

In speaking with a few of our developers, they shared that they are still very sensitive toward current pricing, whereas others have accepted that low-cost funding in this area doesn't really exist anymore. The deal can get done but at a higher cost.

Another aspect to consider is the type of development being financed. Commercial development funding for speculative builds is very difficult (if not impossible) at the moment due to limited exit routes for the lender. However, for the right deals, at sensible loan to values and where the underlying security property is good quality with good rental demand, they can still be funded at LTVs around the 65% mark, somewhat higher in tier one territories.

While some lenders are mainly biased towards the east coast or other tier one areas, the main objective is to build and sell, so it is important to build where the market is most active.

With this in mind, it's imperative that Brokers assemble a comprehensive package of information before approaching lenders. Presenting the full package to potential lenders in the right way is crucial in order to secure development finance for a client. Your package should contain the developers resume, an itemized accounting of how the loan proceeds will be utilized, financials on the business and the developer for the past 3 years, a summary of the project, rent rolls and projections.

All of our lenders emphasized that funding is very much dependent on the individual borrower's experience and circumstances. Most lenders will not consider a proposal where the client does not have good experience, and that must be of buying, developing and selling, not just of project management or building experience.

The best advice for brokers is to have relationships lined up and ready so that when they find a borrower, the deal can move forward quickly.

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As a corporate advisory firm, we assist clients by introducing them to lenders in the real estate, business services, energy, technology and healthcare sectors. As a fund manager, we secure growth capital from our investors for small to midsized businesses through the Foxton Fund.

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Preparation For Getting Business Loan Financing

Every company needs capital to survive. Business growth lies in the ability of being able to manage finances properly as this opens the way in which businesses can venture to yet another opportunity for investment. Managing finances is to be considered as one of the most important elements in business. However, what challenges companies or any small businesses is how to acquire money and how to pay for the debt. The intervention of business loan now comes into existence.

For small businesses, preparation is the key. You already have the idea. You have everything you desired and things are falling into places, all that you have worked and planned for. But there is one more thing that is lacking. You need to be able to provide the capital needed for you to start with. You need the money to operate your business. It may be very difficult to work with banks or any business loan company. The key to a successful business loan is on how well you put things together and how prepared you are.

Many lending institutions and banks are looking at the risk factor. It is the very reason why they have to say "no" for a loan requests with any businesses. But you can still get a loan for your business by proper preparation. Now, how are you able to do this? In order to prove that you are worthy of the money, that you are a good risk, taking the necessary steps will help you alter the level of difficulty of business loan. You have to learn what you need to know. You have to prepare on a lot of things to have a good loan deal which would give you enough knowledge so as to persuade-the-lender. Some suggestions on what you will need are as follows:

Business Plan

Let the lender know what you are up to. It is easier for them to approve any request with business loan if you are transparent enough to let them see what your goals are. Showing them on how you plan to use the money is a good step.

Your Projection with Cash Flow

Lenders need to know if you are able to pay the loan. Your business cash-flow-projections give the lender a concrete basis or financial-data that they can use to somehow assess this risk. It's difficult for them to approve such loan if they don't see the potential of your business.

How Much Money You Need

You need to know the importance of being accurate on things as you don't want to invest on things you are not familiar with. Your goals should be realistic and allow yourself to predict the outcome of your venture. Know when you're able to repay the loan. Convince the lender that the loan will serve as a point of reference to your success and that you're sure to repay them through stable profit.

Having a business means having the determination, the drive and the will to become successful. Be proud and confident with your venture. Keep the positive attitude. And if somehow, your loan request gets denied, try another one.