The entrepreneurial journey is full of obstacles and challenges to face, but with hard work, effort, and focus, you will find tremendous financial and emotional rewards at the end of the road. The beginning of the venture can be complicated, in fact, according to LinkedIn, reaching profitability can take up to three to four years.
Don’t despair! Having a solid, well-structured company with a great value proposition is the surest way to achieve short- and medium-term results. But undoubtedly, a great ally to reach all the administrative, operational and financial objectives.
Obtaining capital through financial products such as small business loans or unsecured business loans is an excellent way to achieve liquidity, formalize a good credit reputation and consolidate large growth or expansion projects. Help your business reach its full potential through financing.
First, evaluate your business growth goals and objectives
Loans and credits should not be requested simply on a hunch, recommendation, or urgency. It is necessary to perform an in-depth analysis of your company’s financial situation. In this way, you will identify needs and prioritize those requiring greater immediacy and those representing the best returns in meeting them.
If you need help executing good accounting processes, rely on platforms such as Quickbooks or Freshbooks, they offer simple and easy valuable tools.
Consider outsourcing as an alternative. Discover the significance and why you need an outsourced finance team and prioritize setting realistic and attainable goals based on the outcomes you achieve in the short, medium, and long term.
Main types of loans to get funds for your business
Your objectives will be the compass to establish budget projections to identify the amount of financing you require. You must also know if your company’s payment capacity is sufficient to afford business loans or any type of business loans you have applied for. Here are some types of loans that may find helpful for your company.
Secured loans
Financing requires the presence of collateral to guarantee payment of the loan. If you have problems with the cost, the collateral will be taken into account for the loan amount. They usually have good interest rates and administrative fees, but you could lose your assets if not paid on time.
Unsecured loans
These financing products do not require collateral, but usually have higher rates and fees than the first option. They are an excellent alternative for start-up companies with no credit history or assets.
ITIN Loans
In case your immigration status is not completed, some online lenders offer loans without the need to present a social security number. This financing is ideal for migrants who have established businesses in the United States.
Other alternatives
If your business has specific needs, such as buying more inventory or more cash flow, you can use Merchant Cash Advance or inventory loans. However, the problem is that your sales and inventory will be the collateral for the loan in most cases.
Look for government grants that can help you
Private and public institutions support entrepreneurs; in this case, the Small Business Administration (SBA) is the most relevant. This government agency offers grants and loans to companies that require support to remain in operation or that want to implement growth processes. These are some of the requirements to access the resource:
- Operate for profit
- Meet SBA requirements for small business status
- Have reasonable invested capital
- Be able to demonstrate the need for the loan
- Not be late on payments and obligations to the U.S. government
Talk to a financial advisor about setting up a payment plan
Before applying for a loan at any financial institution, we recommend getting financial assistance from experts. Some companies like Camino Financial offer guidance throughout the entire financing application process.
Additionally, you can use their loan calculator to identify the amount you can afford and the amount you will have to pay monthly. But, remember that the best small business loans are the ones you can afford.
Before applying for a loan, we recommend that you get a head start by gathering the basic requirements that all institutions ask for:
- Company bank statements
- Social security number or ITIN number
- Current with payments on other debts
- Minimum time of business operation of 9 months
Loans are a potentiator of a company’s talent, so managing them with discipline and order is essential to achieving good results. Know your company’s financial situation, identify your needs, access small business loans, and take your company to the next level.
