Atlanta Small Business Loans

Most people who’ve started a small business or are considering starting one have asked themselves this question. Most likely, you’ve saved up a decent amount of money to start your business. This begs the question as to whether or not the cost of a small business loan is really worth the benefit. The answer is almost always, yes. Even if you have a significant amount of assets and resources, unexpected events are typical in the beginning stages of any new business. Having an Atlanta small business loan could potentially save a business from closing. The cushion they provide also helps new business owners stay current with trends and technology. Being competitive is critical in the small business arena. Those who fall behind are often required to sell personal assets or make unwise financial moves. There are many safeguards and types of loans that can alleviate the stress of financing your dreams. This article will cover the necessary steps to obtain financing and cover some of the options that are currently available.

How do you apply for an Atlanta small business loan?

There are a variety of methods for securing financing. Most people typically consider getting an Atlanta small business loan through their local bank. This is a good choice for those who are nearly ready to open their doors and are financially secure. The bank will typically provide a loan that’s backed by the Small Business Administration. The risk for the bank is minimized by providing this type of loan. The underwriting process is rather standardized. You’ll have to present a business plan that’s coherent and viable. You may be asked to provide some form of collateral to secure the loan or a significant down payment. While these loans offer good terms and interest rates, they are among the most difficult to obtain. Occasionally, grants from the SBA may be available for certain businesses and demographics that would benefit the industry and society.

For those who have a great idea but aren’t the “cookie cutter” customer, other options are available. Private equity firms and venture capital companies offer to fund the business for partial ownership and control. The terms of these loans vary greatly. It’s important to seek the advice of legal counsel prior to entering into this type of agreement. While these loans are a great opportunity for many people, there have been companies that have taken advantage of inexperienced borrowers. One must remember that with partial ownership comes some level of compromise. The investor will have some rights as far as making decisions for or on behalf of the business. It’s important to make sure that the investor is someone that you’d feel comfortable working with. This option is good for the unconventional borrower who has a great idea and doesn’t mind sharing control.

A business line of credit is for businesses that are already financially established. While the business’s credit is the preferred method of qualification, personal credit may be considered as well. The owner is provided with a credit account that can be drawn upon whenever they’d like. The benefit is that the underwriting is done upfront and the owner doesn’t have to use the entire amount. The terms vary, however, it’s typical to have to repay the entire loan plus interest regardless of how much has been used. The business owner will most likely have to furnish the company’s accounting reports. Profit and loss statements, tax returns, personal finances, cash flow reports, and more are often required to qualify. This is a good option for established businesses that occasionally experience fluctuations in cash flow. The rates are typically slightly higher than conventional Atlanta small business loans.

Merchant credit advances are also a newer option available to established businesses. With these advances, cash is given for sales that have been processed but not yet paid out. Similar to personal credit card advances, there’s typically a premium that must be repaid. While the rates are higher, this is a good option for businesses that must cover an unexpected expense or a temporary shortage in cash flow. The underwriting and processing times are among the fastest, also making this option more attractive.

Invoice funding and factoring are also relatively new concepts. This allows a business owner to take out a loan on outstanding invoiced revenue. The owner typically has to provide documentation of a receivables history and possibly other financial statements. While this is considered one of the faster methods of financing, it’s also one of the most expensive. The risk the lender assumes is greater than with credit advances, so chances are there will be a significant premium attached. All things considered, these loans provide cash to businesses with less than perfect credit with a quick funding process.

What can be done to improve my credit?

If you struggle with credit problems, you’re not alone. It’s best to obtain your credit report and try to repair as much as you can on your own. You may want to sign up for a service that will monitor your credit activity and FICO score. Some of these services are free of charge. You’re also entitled to view your credit report for free each year. Simply contact the credit bureaus for the report. You can also dispute items on your credit report directly with the credit bureaus. If you’re inexperienced or don’t have the time, you can hire a credit repair service for a fee. These services are often able to remove derogatory items from your credit report. The services take a little time to work; however, it may be worth the wait.

Now that you’re ready to be approved:

Once you’ve been approved you’ll want to make sure that the loan is processed efficiently. Delaying the lender by not providing information can often irritate them to the point of denial. Also, make sure everything is disclosed. Lenders don’t want surprises to come up at a later date. Being honest and upfront will get you the Atlanta small business loan you’ve been wanting, quickly. Just be certain to establish a strong payment history and before you know it, you’ll be getting approved by everyone.