With the country going through its worst financial crisis of the last 70 years, it’s not so easy for small businesses to obtain bank loans. Having said that, there are bank loans that are still available. You’ll just have to work harder to get one, or, not need funding.
The sad truth is that many banks are holding papers of questionable value; consequently, they are not overly eager to hand out more money. Because the banks are not getting repaid as fast as they would like, they have less money to lend. The major problem, though, is that, because of the bad economy, fewer business owners have the high credit score needed to garner a loan from a traditional financial institution.
Bank Loans vs. Alternate Lending Institutions
Getting a small business loan through a bank requires a lot of preparation and paperwork. Aside from the loan application, you will need to provide copies of cash flow and financial statement projections covering at least the last three years of business activity. You will need to anticipate the questions your financial advisor will ask, so you will have to do your homework!
Because credit is an issue with conventional bank loans, many small businesses have turned to alternate banking institutions. On the whole, these alternatives require a lot less paperwork and a much lower credit score. Typically, these establishments tend to look at overall revenue and base their decision to lend on this rather than a credit score. A better credit score will receive better rates, but businesses that have experienced dings to their ratings will also have a chance at the brass ring!
The lending process is usually very simple and can be done online with most financial alternative institutions. Credit approval notification generally occurs within 24 – 48 hours. Once approved, the applicant then just submits bank and credit card statements (if applicable) to determine a final amount for the loan. Origination documents are prepared and signed then within 3 – 5 working days the funds are deposited into the applicant’s account.
For those whose credit isn’t stellar, this is a great way to increase it. These financial organizations report to the business credit scoring bureaus thus you’re improving business credit while also getting you the money you need. Typically the applicant can renew the loan and for a larger amount.
If you need alternative business funding but been having no success with your bank, contact the Financial Specialists @ www.libertycapitalgroup.com and find out how we can help you get the funding you deserve!