What does the SBA do exactly? The SBA (U.S. Small Business Administration) is an independent agency of the federal government that works to aid, counsel, assist and protect the interests of small business concerns, preserve free competitive enterprise, and to maintain and strengthen the overall economy of our nation. The SBA works with private investment funds that search across the United States for promising businesses in need of debt or equity financing. The SBA doesn’t directly lend money to businesses. Instead, it backs loans that banks and other lending institutions make to small business owners.
How Can Small Business Owners Benefit from SBA Loans?
Any entrepreneur, be it a small business owner or a seasoned corporate entrepreneur, is fully aware of the financial difficulties associated with the first few years of opening a company. There are quite a few obstacles for an owner to hurdle including:
- Establishing an unknown brand to a new customer base
- Fighting off competitors who already have a foothold in the market
- Allocating financial resources for growth while attempting to grow sales
- Maintaining profitability during non-peak seasons
It’s in these situations that entrepreneurs ask themselves, “What does the SBA do and how can I benefit from them?” The SBA favors and supports the growth of ambitious small businesses. When acquiring business capital becomes an issue, small business owners can turn to lending institutions such as Fast and Easy Funds, who will then guarantee an SBA loan and help owners get their company back on track. SBA loans are the best way for small business owners to get added help with loan approval, especially when they’re out of options.
For more information on SBA loan acquisition, contact Fast and Easy Funds today. There’s no better place to go for easy cash advances, asset based loans and purchase order financing!
Related: When to Turn to Lenders for Capital
It takes money to operate and grow any business. Sometimes the demand can outweigh the supply, forcing entrepreneurs to seek out alternative options. That’s where small business loans come in. For many small business owners, the word “loan” has negative connotations. It’s understandable why that may be, as small businesses are known to climb upwards for long periods of time before they reach profitability. Here are some common misconceptions to that small business owners need to be aware of when considering small business loans.
“It’s always a bad idea to start a business with debt”
Small business loans aren’t the end of the world, nor does initial debt spell disaster for an entrepreneur. If you can secure start-up capital through crowd sourcing or other investors, then you will find yourself in the ideal position of not needing to take out a loan at all. Unfortunately, it’s no small task for new business owners to acquire the funding they need without taking on a business loan. Some businesses are in an industry that investors may not have an interest in, or if they are, they may have to relinquish equity in the company. Sometimes it’s best to begin with debt knowing that you have a high probability to pay it off than to lose partial control of your company.
“Lenders aren’t interested in supporting small businesses”
This is a misconception that deters new business owners from applying for small business loans. Though it is true that new businesses have short life spans depending on the industry, there are always companies that are willing to give new entrepreneurs a chance. Fast and Easy Funds in Boca Raton is a perfect example of one such lender. We specialize in financing options for new businesses, offering entrepreneurs opportunities to obtain the needed start-up capital to acquire inventory, fulfill purchase orders and other common small business expenses.
As part of any small business loan application process, businesses are asked to provide information to banks and lending institutions to help them determine the profitability of the company and the likelihood that they will get their money back. For businesses, especially startups, providing loan collateral is a great way to gain approval. The following is a list of items that are recommended for use in providing banks or online credit lenders with business loan collateral:
- Personal Savings and Cash Deposits
The famous expression goes, “You have to have money to make money.” That statement holds true when seeking a small business loan. Banks view personal savings, certificate of deposit, and other financial accounts as an approved form of collateral and most importantly, sees the business as a low risk investment when the owner can readily display an ability to pay all or at least some of the loan back.
- Physical Property
Some of the most commonly used forms of collateral that owners of businesses use to secure a small business loan include homes, vehicles, equipment and sometimes inventory. Banks and lending institutions want to be sure that if they don’t receive payment for their loan, they can at least liquidate the physical property and recoup their cash investment.
- Accounts Receivable
For companies that have a list of clients that they bill for services, they may be able to use their accounts receivable as loan collateral. In order to make this work, the owner will need to provide a balance sheet along with a track record of sales in order to show proof of value to the lender.
Startups have the most difficult time acquiring online loans and the reason is simple: no credit is worse than bad credit. Startup entrepreneurs are an unproven entity, and banks and online lenders simply have no history to base their decisions on. Fast and Easy Funds understands that loans for startups are difficult to acquire, so we have outlined some of the best ways for a startup to receive a small business loan.
SBA Startup Loans
The Small Business Administration offers loans for startups with competitive interest rates between 7 and 9%. However, be warned that they are not easily received and they will require a decent personal credit score, and usually some form of collateral (usually real estate). You can find the SBA startup loans here.
You aren’t just limited to loans for startups, why not try applying for a grant? There are grants available for women, minorities, veterans and so on. Search for grants and competition in your area or field. You’ll be surprise how many small business loans start from simply winning a competition.
When Does Start Up Classification End?
The truth is, no one is sure, and each online business lender has different metrics to define a startup. The truth is that no one can really agree, so it’s up to you to call find an online business lender that agrees you are still in the startup phase.
If you have tried all the above methods to secure small business loans for startups, but you have had no luck, then it’s time to consider the alternatives:
- Online Crowdfunding
- Credit Cards
- Family Member Assistance
- Consider an Investing Partner
Do whatever you can to get your startup off the ground and on the path of success.
If you haven’t listened to the recent Decrypted podcast about startup funding, we recommend you do. If you haven’t listen to any Decrypted podcast, then we highly recommend you listen to their catalogue. The climate for online business loans and investments is changing, and the recent episode “Why It’s So Hard to Build a Startup Outside the Big Tech Hubs” discusses that perfectly.
This episode of the Decrypted podcast follows Jase Wilson, who launched a startup called Neighborly in Kansas City. Wilson chose to pursue investments rather than an online business loan. At first, this may have seemed like a wise decision, but Wilson found out just how difficult it is to secure an investment.
His company, Neighborly, has the ambitious idea of allowing people to invent in their local communities by purchasing government bonds that will fund local projects. For example, you could invest in a project to build a local park by purchasing a bond for that project.
Though his idea was well thought out and the mission was meaningful, Wilson could not get any venture capitalists in Kansas City to invest in his company. Most venture capitalists will only invest in a company that has secured investments. This is a catch-22 of epic proportions.
And he’s not alone. As the Decrypted podcast hosts point out, it’s more difficult for companies to secure investment outside of tech hubs. Online business loans are becoming the only option for most companies outside of California, Boston, and New York. Those cities fund 75% of all startups. The Decrypted podcast is created by Bloomberg, and each episode takes a detailed look at entrepreneurship, which Fast and Easy Funds recommends for business owners.
Technology is going to have a major impact on the way businesses operate in 2017, but this is no secret. Access to online business loans has changed the financial industry, and experts say it is going to get easier to obtain loans this year.
At Fast and Easy Funds, we believe that the way small business owners use technology to develop great business habits may make a big difference in their overall business health. Here are some good business habits to adopt in 2017:
There has never really been a line between business and personal life for entrepreneurs, which can be tough for some. However, it should not be. Although technology has made it more difficult to separate your personal and professional life, it may have now made it bearable. Apps like Mint connect all your finances in one place. These apps make it easier to keep track of your business and personal finances.
This year, automate your life. Sign up for automatic pay to ensure that you are paying back your online business loans; no more worrying or forgetting. Use this time to focus on your company.
We are all overexposed to information. Tim Ferris, business guru and writer of the 4 Hour Work Week, suggests turning off the notifications and taking a step away from the constant bombardment of information. Do not read the newspaper anymore; instead, get your information through interaction.
Use this year to take a few calculated risks. Consider online business loans, and take the next step in expanding your influence and your business.
Fast and Easy Funds reports that the rates of entrepreneurship are at a steady increase, with promising numbers for 2017. Studies conducted by the Kauffman Foundation found .34 percent of Americans start a new business each month.
With low capital intensity, low entry barriers, and high profit margins, the following are the top industries ripe with opportunity for startups in 2017:
- Corporate Wellness Services – Providing a low-cost alternative to healthcare.
- Human Resources – To cut costs, many companies are outsourcing human resources to private companies.
- Scientific and Economic Consulting – These companies are specializing in providing their clients with technological developments for their niche, and increasing market competition.
- Street Vendors – The increased demand for unique, gourmet, easily accessible meals are bringing a projected revenue growth of 3.7 percent in the street vendor industry over the next five years.
- Ethnic Supermarkets – In consideration to the growing Asian and Hispanic population in the United States, ethnic supermarkets are popping up everywhere to meet the demand for specialty foods.
- Adult Beverages – The wine and craft beer industries have rapid growth projection in the coming years.
- Tech – Over the past decade, the tech industry has seen the biggest and most successful startups with billions in revenue. Fast and Easy Funds reports projected success for the social network game development specifically.
- Online Survey Software – More companies are starting to use online survey software to engage with their clients, receive feedback, and reach out to potential, future clients.
Contact Fast and Easy Funds today to find out how much capital we can provide for your startups in 2017.
Running your own business successfully is the most rewarding career path, giving you the ability to set your own hours and work towards something truly meaningful to you. The path to a running a successful business is paved with time, effort, and dedication. There are a lot of difficulties to owning a business, regardless of where it is located. However, some states create a better environment for entrepreneurship and innovation. These are some of the factors that contribute to the best states for small businesses.
Forbes released a ranking of the best states for small businesses, which were rated due to the following factors:
- Business costs
- Labor supply
- Regulatory environment
- Economic climate
- Growth prospect
- Quality of Life
The top five states showing potential for future success for small businesses in 2017 are:
- North Carolina
With all 50 states taken into consideration, Florida ranked #12 of the best states for small businesses. The lenders at Fast and Easy Funds have helped a countless number of business owners get their ideas off the ground and running.
If you are considering opening your own business, here is what you need to do:
- Consider factors such as population, job growth rate, and unemployment in the area you hope to establish your service in.
- Obtain a business license from your county tax collector.
- Register your business with the Department of Revenue and the IRS.
- Contact the professionals at Fast and Easy Funds for the secure loan you need to get started in one of the best states for small businesses.
Throughout his long campaign, businessman and future president Donald Trump made big promises to small businesses in America. He wooed entrepreneurs with his plans, in which he outlined the major setbacks small businesses face, and how he plans to “Make America Great Again”.
The following are the 3 ways in which small businesses will be affected by a President Trump:
- Repeal the Affordable Care Act – In Trump’s words, this has “crushed” small business owners who have been mandated to provide health insurance benefits to companies of 50 or more employees. Under President Trump, small businesses can expect to see amendments made to the current healthcare act in order to make it easier on households and businesses who have to supply it.
- Tax Cuts – under Trump, Fast and Easy funds reports that small business owners should expect to see a significant decrease in tax rates, dropping from 35 to 15 percent. As of right now, some small business owners who combine business income with personal income could be paying up to a 40 percent tax rate. Trump hopes to create set rates and eliminate major corporate loopholes.
- Lighter regulation – Trump favors lighter regulation across industries, which ultimately will make it easier to obtain a small business loan. Fast and Easy Funds know that a majority of small business owners see the government’s regulations as a barrier to their company’s success and expansion. When more entrepreneurs can acquire loans, more businesses can grow and expand more efficiently.
Fast and Easy Funds knows that there is quite a way to go before Trump’s presidency positively affects small businesses; but in the meantime, entrepreneurs can get the boost they need for their business from our loan experts.
Fast and Easy Funds knows that entrepreneurs take a serious leap of faith when starting their own company. It requires hard work, proper funding, and endless optimism. Over time, it is critical that small business owners have a solid grasp on reality to determine when things are not going well for their company, and when they need an online business loan to save their company.
How to Tell If Your Company is Going Under
Low Sales – this is an obvious sign that your company is not doing as well as it should be. Fast and Easy Funds says a businesses cannot expect to succeed without a steady income and positive sales.
No Brand Awareness – When a company is doing well, people are calling, communicating, reviewing, and mentioning it. If you are noticing that no one is talking about your company, then it is not doing well or perhaps not well enough. Fast and Easy Funds recommends getting on social media and doing local advertising and promotions to get your brand name out there and in the mouths of consumers. An online business loan can give you the funds required for hiring digital marketers and for advertising costs.
Your business doesn’t offer anything unique – A consumer wants to know what your company offers that is different from the next company. If you cannot confidently explain what sets your company apart from others, chances are your company is going under. These days, it is all about the company that offers the very best services or the very best customer experience. If your product is not unique, make sure that your service is unique or better than the competition.
High employee turnover rate – A business owner should beware if his or her company has a high employee turnover rate. This implies that something is not working, something needs to be adjusted, and employees have no faith in your company. If management is the problem, you may need to rehire them in order to not only keep employees happy, but also improve the moral of your business and storefront location.
Financial struggles – A successful business must bring in enough money to manage all expenses, and extra for profit. If your business is struggling for money, Fast and Easy Funds can help get you back on track.