A business owner or a group should take into account many aspects of companies and businesses. However, almost all companies will declare without fail that the most important of them all is their capital. By capital, this refers to money available for the business or company to fund their day-to-day operations. Consequently, capital also concerns itself with funding to expand the establishment in the hopes of becoming much more successful. The generation of wealth through business actions and deals is one way to achieve their goals, but the business needs a helping hand in some cases.
Businesses that do not have enough capital would consider taking loans from different sources. However, most of their heads have other processes met with multiple restrictions, delaying the business loan. Fortunately, business providers such as Idea Financial have created a system where the procedures are much more flexible and convenient for the borrower.
The question now is this: what makes a business provider a much better option for business loans? To answer the question, one must first know more about two financial solutions that are important to loaning.
Business Line Of Credit?
The business line of credit should be a strong option for any small business looking to move its ideas to the next level. The line of credit is the most flexible option of the two as the business provider should approve the request and provide the funding on the same day. With this, funds are readily available for use. It is up to the borrower to decide when the best time is to withdraw the funds for technological innovation, property purchases, and many other possible reasons.
Speaking of its flexibility, borrowers would only pay for what they use from the agreed-upon credit limit, and a credit will be replenished after each payment. In addition, low prices with repayment terms are available for up to 18 months with no origination fees or pre-payment penalties to face. This is offered up to a $250,000 limit which is more than enough for smaller businesses.
Of course, a loan would require a specific interest from the borrower, but this is much more flexible than the banks. Hypothetically, if a borrower would loan $100,000 from the provider but only use 5% of the amount, interest would be taken from the $5,000 instead of the entire loan. Nevertheless, the line of credit is similar to the average credit card, but there are some differences. Instead of exchanging an amount for goods and services, the business line of credit is used to withdraw funds deposited to a bank account. These funds are primarily used as working capital to invest or pay expenses right from the bank account.
Business Term Loan?
Small businesses may consider term loaning as their direction towards expansion, but these are a little restrictive compared to the line of credit. As the phrase suggests, this is a small business loan that consists of a fixed rate and a repayment term agreement between a loaner and borrower. However, these do not overshadow the benefits that providers place upon each term loan. Much like the previous loan, a business owner has access to cash without any origination fee, and they can save on interest at the time of full pre-payment. In addition, once 50% of the loan has been paid off, they are eligible for new terms, and from the provider, they are free to select one of the many different options available.
With a set repayment schedule and interest rate, businesses use this option laid out by providers because of their lower interest rates and scheduled payments, which could create business strategies. However, there are some qualifications that future borrowers must meet before applying for term loans that are the following:
1. The company must have been in operation for at least two years to provide enough financial documentation.
2. $15,000 in monthly revenue is required to guarantee that they may cover business expenses and regular repayments.
3. The business must have a credit score of 650 or higher.
4. The company is not a sole proprietorship or non-profit.
Why Business Providers?
If one were to ask why a business provider should be their first option regarding business loans for the future of their businesses, the simple answer would be that the application process is quick, and there is same-day approval. The application would only take mere minutes without any fee, and the provider provides the borrower with money and offers business solutions for their capital. Whether a technological or a logistics company, they make time to ensure that the business will come out stronger. Origination fees are also not a problem when borrowing from business providers.
In regards to the credit of the business owner, the business loan will not in any way affect one's credit. With this comes a new way to improve the borrower's business credit, which would help the business in the long run as this establishes them as reliable and committed.
Comparing Against Other Lenders
Lenders such as Idea Financial offer all prior services, establishing the business as the standard for business providers. Nevertheless, there are multiple other options available for loans, such as the bank, but these seem inferior to the former. It is mainly because of the length of time it may take to approve a loan and the origination fees that come with it. In addition, loaning from banks may even affect the business credit of the borrower, which could be pretty costly.
Credit cards are another option to initiate loaning because of their paperless applications and building business credit. Still, these are the only benefits offered by this cashless transaction. As for online lenders, their agreements and procedures vary, and they may be inconsistent and unreliable at times. This, ultimately, should lead to one applying for loans from business providers.
Business loans are essential for a business to grow but are unable to due to their limited capital. Just as there have been many technological innovations globally, loaning has been made faster and flexible through the emergence of business providers. Aside from their convenience, they have proven themselves to be reliable loaners and innovative thinkers, ready to aid any company in their expansion.
If a borrower needs a loan, a business should not neglect the possibilities available with business providers.
