North Dakota Small Business Loans
Do you own a small business? Do you have the desire to grow your business? Growing means becoming more profitable, but it also requires you to take a chance now and then. One of those chances is financial. You must spend money to make money, but what happens when you don’t have the money to spend? You can apply for a small business loan to help you get started, but you might not have the time to wait for that kind of funding. You might also not have the ability to get a small business loan if you don’t meet strict requirements.
A small business loan through a lender requires weeks of waiting, weeks of paperwork, and funding is not available right away. Sometimes, business owners go through the entire application process only to find out they were denied a loan and wasted weeks of valuable time hoping for the funding they need to expand. A North Dakota merchant cash advance is a great way to secure funds when you don’t have the time or you don’t meet the requirements for a business loan.
How Does it Work?
A merchant cash advance is not so much a loan as it is a cash advance. You can have the money you need right now, but you must pay it back over time. The caveat is that you don’t have the same amount of time to pay back the cash advance as you do a loan. You don’t have years. You have months. Most people are able to pay back their cash advance within four to nine months of receiving their funding, which is what makes this process easy.
Additionally, funding is available right away. There is no long application process. The process is simple and streamlined, and you can have your cash on hand in a matter of days. The application process is simple, too. You need only turn in the following documents.
– Business taxes
– Driver’s license
– Bank statement
– Credit card statement
– Credit score
– Voided business check
Once you are approved for the loan, the cash is deposited right into your bank account. This gives you the power to spend right away and not worry about wasting more time.
Once you decide a merchant cash advance is a way to go, you must understand how repayment differs from a traditional loan. A traditional loan requires a monthly payment broken down into a specific number of years and calculated using an interest rate. Lower rates are given to the least risky borrowers in the eyes of the lender.
Rather than using an interest rate to profit from your repayment, a cash advance uses a factor rate. This factor rate is expensive, starting at what’s equivalent to a 15 percent interest rate. When it comes to repaying your cash advance, you never write a check. The company deducts the repayment daily from your bank account using a percentage of your credit card sales and your debit card sales. This is the reason you don’t know how long it will take you to repay your cash advance. It depends on your sales any given day.
Is it For Me?
If you are looking for money to expand your business, a merchant cash advance might be for you. Were you denied a small business loan and cannot raise capital in another manner? If this is the case, you have options. It’s more expensive, but you have access to your money faster. If your investment pays off quickly and efficiently, you’re also looking at paying off the loan much faster, which means you might be able to pay it off for a little less money.
If you need money for your business now, it’s worthwhile to consider a merchant cash advance. You can pay it off faster and more efficiently than a small business loan, but it’s important you only borrow what you need. It’s also important that you are able to grow and expand using this money because that is what makes it possible for you to avoid a financial disaster during the repayment period of this cash advance.
The average person has vague information about their credit score, and they don’t truly understand just how much it affects them financially. Your personal credit score will range from 300 to 850 and is based of five different factors: how much debt you have, the types of credit you have, your payment history, the amount of time you have had credit and recent credit inquiries. Your payment history is the most heavily weighted factor.
If you’re embarking upon the journey of obtaining a small business loan, then it makes sense to ensure you have a strong application. Although some lenders are flexible, it would be in your best interest to either meet or exceed requirements. The criteria for small business loans in Golden Valley typically involves your annual revenue, credit score and the number of years you have been in business. If you’re thinking about getting an SBA loan, then you’ll need to make sure you are not on their ineligible business list, which includes nonprofit, financial, real estate and life insurance companies, to name a few.
As you have probably imagined, the lending process requires you to provide a wealth of financial and legal documents that may include Articles of Incorporation, income tax returns (personal and business), balance sheet, income statement, bank statements (personal and business), your driver’s license, commercial leases, business licenses and your resume. The purpose of providing your resume is to make sure you are equipped with the necessary qualifications, such as management experience.
If you don’t have the time to provide all of these documents and want a more streamlined process, then an online small business loan might be a better option for you. If you have a strong credit history, there’s a chance that you can find a loan product online that’s comparable to bank loans.
Do You Have a Solid Business Plan?
Lenders are eager to confirm your ability to pay back a loan that has been granted, which is why they will typically request your business plan. Contained in the pages of your business plan should be financial projections that indicate how you intend to pay for the loan. Having a great business plan can do the bidding for you and increase your chances of approval.
Some lenders require you to provide collateral, such as real estate, inventory or equipment. If you are unable to provide collateral, then an unsecured business loan might work best for you.