Small Business Factoring

lilylady20 asked:

Yes, I know, I’m young and dumb
I was just wondering – do you go to the bank and get the loan first? How much money do you have to have before you do that? Are you supposed to make an offer on the house first?
(I’d be going straight from an apartment, so I wouldn’t be waiting on my own house to sell or anything).
How does your credit rating factor in? Is it part of the loan?
Any information would be great! I won’t be buying anything anytime soon because we don’t have any money to spare, but I’m just wondering how it works for when I can!
Thanks so much for all the informative answers! I didn’t expect so much help

For Commercial Finance Loans – Factoring Loans * Equipment Financing * Purchase Order Finance * Commercial Mortgage – IMM Financial has been in the Commercial Finance Business serving companies just like yours for over 14 years. Put our experience to work for you. We are the Cashflow Specialists.

starofiniquity asked:

I’ve come to understand that using the card and paying it off, or paying minimum payment doesn’t do much for your credit score in general. What I’m curious about is what the optimal balance on the card and payment made would be to increase your credit rating and credit line.

Wade Henderson is a recognized Expert in Business Finance with over 14 years Experience in the Commercial Lending Field and a strong reputation for getting the deal done. Visit IMMFinancial.com to put his experience to work for you.

Cash Miller asked:


First off it needs to be said that there are certainly other ways to go about establishing credit for your business. These four methods are just a tried and true means of doing so rather quickly. Of course most of the credit limits will be low but over time as your business grows these limits can be raised. All you need to do is develop a good clean history with the credit provider. So let’s talk about four of the easiest methods available to build up your company’s credit.

Credit cards are probably the number one recognized way of building credit. And it doesn’t matter whether it’s for an individual or a business. But credit cards come with some risks so they need to be used carefully. For one you have to be aware that any credit card that you apply for on behalf of your business will want you to sign the contract as the guarantor. This means if the bill doesn’t get paid the credit card company will start calling you. But having two to three credit cards is ok as long as you have the ability to pay them off regularly and not carry a balance. And there are plenty of low interest cards that you can apply for if you take the time to shop.

A Second option is getting a store card. Having a store card to your local office supply or warehouse store can be a good way to give you some financial flexibility and convenience when you need basic office supplies or other items. And it will help you build your business credit rating.

Your third option is to ask your suppliers for a line of credit. Often if you take the time to develop a good relationship with your suppliers then they may be open to providing you with a credit line and a thirty day grace period in which you can make your payments. Often your suppliers will offer a discount for paying your bill before the thirty day period ends. This can save your business money and build up goodwill with your suppliers. Ultimately your suppliers want to work with you and providing you with a credit line is a way that they can tighten up their relationship with you. So this can be a win win for both.

The final way is your bank. Of course building a solid relationship with you bank is important. But your bank also has the ability to provide you with a revolving credit line. This line can be used to pay off larger short term expenses that you might not have the funds for yet. The idea is simple. You establish a credit line with your bank. When you fall short of money to make a bill payment on time then you borrow money from the credit line to pay the bill. Once you get paid by your customers you repay the amount borrowed. This allows you to stay in good standing with your suppliers and other creditors.

Because your business needs every bit of financial flexibility it can possibly get. You can use as many of these options as you might find necessary to establish credit for your business. You just need to decide which methods are best for your business.



For Commercial Finance Loans – Accounts Receivable Financing * Business Equipment Leasing * PO Finance * Commercial Property Mortgage – IMM Financial has been in the Commercial Finance Business serving companies just like yours for over 14 years. Put our experience to work for you. We are the Cashflow Specialists.

Michael.t.brian asked:


Often running a business becomes difficult for lack of adequate funds. It could be that there is a cash flow problem owing to seasonal slump in demand for your products or you could not get the payments in time. Or, you require greater funds to buy some expensive machinery, raw material or thinking of starting up a new trade. You can take out Small Business Finance for host of purposes. But you must be well prepared before applying for it.

First of all you should have your credit report thoroughly checked for any inaccuracies in it as the report is crucial in determining the rate of interest and terms-conditions.

Prepare a business plan, which should include the plan of investing the finance and your income sources for making the repayments. The loan providers will first scrutinize your business prospects in order to assess you for risks.

You can choose to borrow funds in secured or unsecured options under small business finance. Any of your commercial or residential property can serve as collateral for the secured greater amounts. The rate of interest will be lower and repayment duration also will be convenient in the range of 5 to 25 years. The unsecured option, however, comes with higher interest rate attached to it. You will borrow only a smaller amount for up to 10 years.

As far as sourcing of these loans is concerned, banks usually do not offer small business finance to new business, but you can get it for the established trade. To borrow the funds for starting a new trade, better explore opportunities on internet, where numbers of lenders can be contacted. Compare their rates and terms-condition for a suitable deal. Make the repayments in time for avoiding any debt build up and for making improvements in your credit rating as well.



For Commercial Finance Loans – Accounts Receivable Financing * Business Equipment Leasing * PO Finance * Commercial Property Mortgage – IMM Financial has been in the Commercial Finance Business serving companies just like yours for over 14 years. Put our experience to work for you. We are the Cashflow Specialists.

George Page asked:


Money is always an issue for small businesses, especially when starting out.  However, the need for cash injections can continue long after you get that first dollar.  Even same industry businesses can differ greatly, but they all have in common the need for money as well as the places they can go to get it.  Here is a look at seven opportunities to get cash for your small business.

 

Small Business Loan

Probably the most known source for small business cash is the small business loan.  This most often comes from a bank or the SBA; for startup capital or an expansion.  The lender looking at your proposal needs to feel that you are a good investment and you can help them decide in your favor.  Wherever you go to get the loan, there are several things you will need in order to give your business its best chance to get that loan.

Your business plan will tell the lender about your business and you.  They will see how much planning you have done, your grasp of the industry, and how effective the loan will be.

A good cash flow projection tells the lender not only how you will pay them back, but when.  Your best bet is to show hard, but honest numbers.

Your personal financial statement helps the lender to understand where you are coming from and where exactly your business is at.  After all, you’re tied to your business at the hip.

Bring past business tax returns if you have them.  It will show the lender how your business has done and how you have managed money in the past.

Your credit rating is key for establishing trust.  The lender may be giving money to your business, but they are forming a pact with you.  A credit report will fill in the rest of the details of who they are about to trust with their money.

 

Microloans

From the SBA, the microloan program may be a perfect fit for your current financial needs.  With a maximum of $35,000, a microloan can be less daunting to acquire, if not a little easier than a small business loan.  The most common use for a microloan is short-term working capital and equipment purchases.  Since most microloans require collateral of some kind, the best use is probably equipment, since the equipment can then be the collateral.

 

Supplier Credit

While this source of income may not work with all businesses, it is ideal for manufacturers and retailers.  A supplier makes money by you buying their products, but if you can’t first buy their products to make yours, they lose a sale.  If you cannot be billed – net 30 days – or if it may take longer to receive your money, it is possible to work out a deal with your suppliers.  An ideal situation is to procure credit out to sixty days.  If that isn’t possible, maybe they will take a percentage of the sales of the end product on top of the cost of the supplies.  This temporary solution could generate higher interest than a loan, but in some situations, it could be your only choice. 

 

Angel Investors

Best in times of growth, angel investors can be a boon to help a small business get over the hump to where they need to be.  Angel investor loans fill the space left after you’ve gotten your small business loan and other capital.  Unfortunately, they are few and far between and spending too much time looking for them can be even more detrimental to your business than cash problems.  The best time to look for an angel investor is when you already have growth, you’re approaching the breakeven point, or you’re expanding.  The worst time is when you’re hemorrhaging money.  Take care, you still have your business to run.  Plan to spend four to six months looking for an angel investor, but use only a quarter of your time.  Like getting a small business loan, be ready with all that proof that you are worthy of an angel’s blessing.

 

Credit Cards

It’s a source of quick, red-tape free cash, but credit card cash advances can eventually kill your business if you’re not careful.  Always keep in mind the high interest charges when you are looking at credit cards as a cash source.  Use them, but only for quick-turnaround, time-sensitive, and/or small scale solutions.  Treat credit card advances like you would a fire; it’s great for quick warm ups, but really hurts if you leave your hand in there too long.

 

Home Equity Loans

Like credit card advances, a home equity loan for your business is a personal risk solution.  They are more attractive however, because of their lower interest rates.  The catch is that if things go south, you lose your home.  Depending on how personally invested you are in your business, this may not be such a different outcome from credit card advances, or even small business loans if calamity strikes.  The main thing to remember when considering the bad side of a home equity loan is that due to consumer protection laws, it’s a much longer process to seize your house than it is from a normal bank loan. 

 

Family or Friends

Nothing ruins a friendship or splits a family faster than money problems.  When you are considering approaching the people you are closest to, you must know the best way to handle the situation, as well as the potential pitfalls.  Some common relationship killers due to business loans is the recipient squanders the money, doesn’t use the money as indicated, doesn’t pay the money back, or doesn’t pay it back in a timely or agreed upon manner.  If you can avoid those situations, you’re way ahead of the game.  The best course for loans with friends and family is to handle it as professionally as a bank loan, or even more so.  Make sure there is a formal agreement with signed paperwork stipulating how much is to be loaned, collateral, interest rate, how it is to be repaid, and what happens if it cannot be repaid.  If you spell out everything on paper, there is no room for disaster due to misunderstandings.  Remember always:  these people trust and believe in you… don’t make them regret it!



For Commercial Finance Loans – Accounts Receivable Financing * Business Equipment Leasing * PO Finance * Commercial Property Mortgage – IMM Financial has been in the Commercial Finance Business serving companies just like yours for over 14 years. Put our experience to work for you. We are the Cashflow Specialists.