Peer to peer lenders, banks, credit unions, and other lenders offer business loans. Loans are offered to small and large businesses in different industries.

Business Loans and Requirements

The main types of financing include loans and revolving credit such as lines of credit. Loans are offered under different government programs, and the terms vary depending on the current economic situation and fiscal policy. One reason to apply for a business loan is to cover emergency repairs . Entrepreneurs, small business owners, and new start-ups apply for financing. The requirements are different for new and existing businesses. Financial institutions require that borrowers offer collateral, a breakdown of their capital, and cash flow projections. While there are requirements to meet, government loans can be used to renovate an existing facility or construct a new building. Businesses use the funds for different purposes, except for a partial change of ownership. Companies use business loans for expansion, operation, and acquisition.

manThey can use the funds to finance leasehold improvements, production facilities and equipment, software and communication equipment, and buildings. Businesses also apply for microloans to fund the purchase of machinery, fixtures, or furniture. Businesses also use microloans to purchase supplies and inventory and for working capital. The criteria of intermediary lenders and the presence of collateral determine the loan terms. There are different types of collateral to use, including natural reserves, plants and equipment, real estate, and others.

Loans from Private Lenders

Financing is also available from private lenders and venture capitalists. They usually offer a higher interest rate compared to funding under government programs. Financial institutions require documents such as your financial statements, business tax returns, commercial leases and franchise agreements, and others. Other documents include registrations and licenses, personal background information, etc. Your chances to get an attractive offer increase if you submit a business plan. Some financial institutions require that borrowers have a co-signer or pledge some asset. You can offer livestock and crops, certificates of deposit, bonds and stocks, and other assets. As a rule, financial institutions require personal guarantees and some type of collateral.

Grants, Revolving Lines of Credit, and Venture Loans

There are other options for businesses, including grants, revolving lines of credit, loans from friends and family, and angel investors. Personal financing in the form of home equity loans is also used. Angel investors are one option whereby individuals offer capital to new businesses and entrepreneurs. Grants are also offered to businesses that focus on research and development. Local, state, and federal governments also offer grants.

References:

Business Loans – Canadian Banks

Canada Small Business Financing Program

 

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Bank Loans and Vendor and Supplier Financing

by John_S on April 10, 2014

Big and small businesses use debt financing to expand to new markets, develop new products, and finance purchases. There are different options available depending on the applicant’s personal and business credit score, loan purpose and amount, financial and bank statements, and other factors. Finance companies and microlenders are two options for borrowers with poor credit. Microlenders are an excellent choice because they report payments to the bureaus and offer loans of up to $35,000. The interest rates are based on the economic environment, loan term and amount, and other factors. There are many benefits for borrowers, and one is that they can compare different loan terms and rates to make the right choice. There are online tools that help customers to calculate the monthly payments.

For example, a loan of $15,000 with a 3-year term will cost you $475 in monthly payments. Business loans are also offered to women business owners and entrepreneurs. Microloans are offered through different programs to help non-for-profits and small businesses to expand. Unlike traditional banks, customers benefit from quick approval. Business customers are offered bad credit consolidation loans such as equipment financing and franchise and start-up loans. Applicants with good credit are offered attractive deals and packages and flexible terms. Businesses also apply for government financing in the form of economic development and scientific grants and benefit from low interest rates. The main benefit for businesses is that the interest rate is lower compared to private lenders.

Small business owners also resort to loans from family and friends as well as equipment and real estate loans. Other options for financing include business lines of credit and equipment sale-lease backs. Borrowers also apply for business acquisition loans and use supplier financing. In addition to government programs and grants, there are other types of loans such as supplier and vendor financing. A standard bank loan is another option, but the application process may take several weeks, and applicants with poor credit are often turned down. They also consider the borrower’s payment history, revenues, ownership structure, experience, and other factors. Collateral may be required as well if you apply for a large loan. Financial institutions that offer business loans require supporting documentation such as profit and loss statements, tax returns, and others. Enclose financial estimates and verification of non-business income. Provide your cash flow statements and mortgage notes, if applicable. You may want to enclose a business plan and include components such as company description, description of your management and organization structure, executive summary, etc.

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The cards have two options for borrowers with a history of foreclosures and late and missed payments. There are benefits to using a secured card, and one is that the borrower’s payments are reported to the credit bureaus. This is one option for borrowers who are turned down by issuers offering unsecured credit cards. Customers are required to make a security deposit that serves as a guarantee against default. Look at different options, including cards offered by big and small banks, before making a decision. Check for fees, penalties, and hidden fees. Non-bank lenders and traditional establishments offer a variety of credit cards to new and existing customers. The type of card to choose depends on factors such as interest rate, credit limit, and others.

Department store cards are ideal for frequent shoppers and borrowers with little or no credit exposure. There are benefits and perks for holders, including savings on big-ticket items and one-time purchases. In most cases, these cards can be used in one chain or store only.

Department stores such as Walmart feature cards with cash back, discounts, and other perks (http://www.creditcardreview.ca/walmart-credit-cards-options-for-eager-shoppers–article/).

There are plenty of options to look into, including rewards, student, and gas and auto credit cards. The choice of credit cards depends on factors such as annual household income, debt to income ratio, and others. Borrowers with an excellent credit score are offered cards with added perks and higher credit limits. Rewards cards offer bonus points on purchases made at participating resorts, hotels, and chains. Bonus points can be redeemed for gift cards and certificates, merchandise, and more. Some card issuers also offer a fee waiver during the first year so that customers save on annual fees. Whether customers benefit from bonus points and rewards programs depends on their spending level. Holders earn points while dining at restaurants and traveling. Whether a rewards or cashback credit card is the best choice for you depends on your lifestyle and spending habits. Consumers who spend a lot of time travelling and driving often opt for gas cards. Customers who travel a lot for business or leisure often choose an (https://www.airmiles.ca/arrow/). Customers are offered plenty of benefits such as cell phone replacement insurance, concierge services, and others. People who make transactions in USD often choose US dollar credit cards.

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Car loans are offered for the purchase of new and used vehicles. They are offered by car dealerships, banks, and credit unions, and the terms, interest rates, and repayment options vary.

Terms and Criteria

Borrowers can choose from secured and unsecured auto loans with a fixed or variable interest rate. Secured loans come with a lower interest rate because financial institutions take less risk. The vehicle to be financed serves as collateral, and the bank can repossess it in case of default. Banks also offer unsecured loans to borrowers with a very good or excellent credit. Some finance companies also advertise low interest rates, but the repayment period is very short, and the monthly payments are larger. Generally, your credit rating is the most important factor for banks. If your credit score is in the 500 range, your interest rate can be as high as 18 – 20 percent. Borrowers with an excellent and very good credit score (i.e. over spedometer700) are offered competitive interest rates. Some lenders also offer bad credit auto loans, and borrowers with a history of delinquencies, late payments, and credit issues qualify. Another option is to apply for a loan through a car dealership, but the interest rate is usually higher compared to banks and credit unions.

The interest rate varies depending on the repayment term, i.e. 36 months, 48 months, 60 months, etc. There are also refinance options with different interest rates and repayment schedules.

The Application Process

Borrowers should take several factors into account, including the loan period, interest rate, and down payment. As a rule, the interest rate is lower if you make a sizeable down payment. When it comes to the term or loan period, there are different options available. Borrowers who opt for a longer repayment term benefit from affordable monthly payments, but they pay more in interest in the long term, which increases the cost of borrowing. Financial institutions also require proof of residence, income, and identity. You may be asked to present copies of utility bills, your mortgage statement, and bank statements. Banks review loan applications to make sure that applicants are regular payers and creditworthy borrowers.

You can apply at a local branch, by phone, or online and will get an initial credit decision shortly. You will be asked to sign the loan documents once your application has been approved. To make a decision, however, you may want to compare different loans and interest rates or use an online calculator. Enter the start date, term, interest rate, and any extra payments. Some online tools also allow customers to calculate the amortization schedule, which makes budgeting easier. If your loan amount is $10,000 at an interest rate of 8 percent, and the term is 48 months, the monthly payment will be $244.13.

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Benefits for Credit Line Holders

April 1, 2014

There are different types of credit lines, offered to individual borrowers. A cash credit is one type of LOC that allows borrowers to withdraw funds on a constant basis. Features and Criteria   Financial institutions offer products with tax-deductible interest and no annual fees, closing costs, and appraisal fees. LOCs offer many benefits, but banks […]

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Consolidation Application Process

March 30, 2014

One of the benefits for borrowers is that they are offered a single loan to pay off multiple debts. Borrowers make one payment instead of having to worry about multiple deadlines and monthly payments. Consolidation is one option for borrowers with excessive debt. This is a way to lower the interest rate and improve your […]

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Loans for Adoptive Parents and Other Types of Assistance

March 25, 2014

Loans for Adoptive Parents and Other Types of Assistance Finance companies and non-bank lenders also offer adoption assistance to individual borrowers and families. Grants are also offered under different programs. The type of financing to choose depends on the costs. Financial institutions offer loans to customers who intend to finance the purchase of equipment and […]

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If You Want to Rebuild Your Credit Use Secured Credit Card

March 21, 2014

Secured cards require a deposit which is usually equal to the limit offered. Financial institutions require a deposit, but secured cards are sometimes the only option available to debt-ridden borrowers. The deposit amount varies from one bank to another and ranges from few hundred dollars to $3,000 or higher. Secured cards offer beneficial features, but […]

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Car Financing for New and Used Vehicles

March 15, 2014

Many people apply for loans to finance the purchase of a vehicle. Borrowers can choose from different options, including chattel mortgages, conventional loans, operating leases, finance leases, and others. Financial institutions offer unsecured and secured loans, and the latter require collateral. Short-term and Long-term Car Loans in Canada Early repayments are not allowed if you […]

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Scholarships, Grants, and Loans

March 11, 2014

Lenders usually require proof of identity, information about your household income, university, and more. The requirements for subsidized and unsubsidized loans are also different. The requirements vary depending on your status, i.e. whether you are a parent or student. Students are asked to present information such as their phone number and address, driver’s license number, […]

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