Angel Investors, Social Media and Small Business Loans

If you have a home based business you can apply for business loans online. Whether your business is established or not, you can still get a business loan through these online resources. They are easy to use and give the small business owner many options. It is not unusual for them to provide personal guidance along with the business finance options that they offer.

Large-business finance options range from nearly six months to about twelve years as a repayment term. This includes both long-term and short-term loans. You may borrow as much as $500,000 with positive terms and up to several million with negative terms.

Small business finance options depend upon the nature of your business and your credit score. For example, long-term loan amounts are usually limited to about three to twelve months, whereas smaller term loans are available up to 90 days. You must provide solid documentation for your business’ success, as well as projections for sales and expenditures. Lenders will review your business plan before they advance finance to you. You may also be required to provide security or collateral for the business loan.

Business bank loans can be obtained by small businesses with both personal credit and business bank accounts. The downside to applying for business bank loans is the extremely high interest rates. This is due primarily to the very high default rates seen in the banking industry and is due to the fact that the small business lender has greater risks as well.

Personal bank loans are available for anyone who has a good personal credit rating and/or a business plan with a reasonable projection for sales and expenses. You will probably need to provide a letter of credit setting out why you need the funds and then demonstrate how you intend to use the funds. Your application will likely be subjected to a thorough credit check. If your credit score is lower than ideal, you may not qualify for finance at all. However, you should still apply anyway as it is a free business finance. Be prepared to wait approximately six to twelve months for approval.

You should have little difficulty finding bank loans for small-businesses. In fact, there are more lenders online looking for business borrowers than there are large traditional banks. There are many lending websites that allow you to apply for and receive small-business loans online. There are also lenders who post direct to your online business accounts. These lenders will typically require a minimal deposit.

Small business owners should keep in mind that online lenders require a higher standard of credit score for approval. Because your business is more likely to fail than a home based business, your application will likely undergo a more rigorous review than your home based counterpart. That is good news, however – and you can offset this loss of protection by taking steps to prove your business is solvent. Obtain copies of your business credit card statements proving that your business generates enough cash flow to pay on time each month and by paying off any high balances on your business credit cards.

In some cases, small-business loans can be obtained without submitting to a credit or background check. In many cases, lenders require at least a 3-percentage point reduction from your gross profit margin. Lenders will also consider your cash flow projections and your credit score. If you have a strong history of meeting these requirements, you are likely to receive the funding you need.

Another factor in determining whether or not small-business loans are available to you is your credit rating. Each individual credit bureau will consider your payment history and your financial health as part of their reporting process. If you have several bad credit reports, your chances of obtaining small-business loans are diminished. You may still be able to apply and receive funds, however the interest rate will be higher.

Small business owners often need to obtain financing in order to expand their business, purchase new equipment, or provide new services to existing customers. Many business owners prefer to tap into the financial resources of family and friends and begin working with personal financial resources. This is often the most affordable option for small business owners, but in the long run, using a personal bank account may cause problems and disclosures, so it is important to verify that your friends and family members have a solid financial foundation and a desire to see your business flourish.

Popular online business directories like Squidoo, HubPages, and Mixergy also make it easy for small business owners to apply for the funding they need on the web. Online business funding platforms like AngelPad, WeBiz Loans, and SeedSpotter make the process of securing small business loans quick and easy, but the lending process varies by lender and by the type of business. Lending platforms such as WeBank and AngelPad allow business owners to apply directly for cash. Other lending sites like GoLender and Shopzilla let business owners submit a request for information about funding through online forms. Business owners can use these websites to research and compare different loan packages from a variety of lenders. The type of funding and repayment options available to you will depend on the type of business and the type of funding requested.