Basics about Business Loans for Construction Companies
Do you own your own small construction company? Then you know what it’s like to come into a large contract and need new equipment to complete it – but not to have the cash on hand to finish the job. When you’re in the construction business, you get paid at various stages of the job, but a lot of the time those payments come in a little bit late. The problem is that you have to buy the equipment up front, so if there is a gap in your payments, you can run into real difficulties.
Financing for construction companies often involves taking out some short-term loans to pay for equipment and finish a job – to bring in the money that will pay back the loan and give the owner his profit. There are several ways to find business loans for construction, so let’s take a look at some of the most attractive options available to you.
Bank loans for construction companies
Do you have a solid personal credit score? Is your business also sound with its credit? Then you might want to consider pursuing a loan with the bank you already patronize. If you approach a different bank, you will likely get a huge stack of paperwork to fill out, requests for all sorts of documentation, and then – even if your ducks are all in a row – you’ll still have to wait for the bank to sort through the whole application, which can take weeks. In the meantime, your job is sitting there unfinished. That’s no way to run a business, right?
Equipment leasing and financing
This is one way to up your chances with a traditional lender. If you’re taking out a loan to cover payroll when you start a new job, banks will look at that a lot more cautiously. After all, let’s say you get the loan funded and then you write paychecks to your employees. The job goes south, you default on the loan. What collateral does the bank have? Zilch. They will sell your loan out to a collector for pennies on the dollar. A loan for heavy equipment involves some collateral, and if you default, at least the bank can recoup more of its losses by repossessing and selling the equipment. This gives you more likelihood of approval – and of lower interest rates. You can also use equipment that you already own free and clear as collateral for a new loan (such as that one you might need to take care of your payroll going into this new big job).
Using Real Estate Equity to Finance Business Expenses
A creative way to take out business loans for construction companies is to use equity that you have in a real estate property. This could be your primary residence, your vacation home or a rental property that you own. Obviously, you want to feel confident that your client will pay you for your work in a reasonable time frame, but if you need to take out a loan to cover payroll or other unsecured items, then this sort of loan also offers lower interest rates than unsecured loans, and as long as you stay within the LTV (loan-to-value) ratio guidelines, your approval should come quickly.
Long-term Business Loans for Construction Companies
If your credit is average or better, if you bring in six figures in annual sales, and you don’t have any bankruptcies or tax liens filed against you, another option is a long-term business loan. The terms can run as long as three to five years, and interest rates can start as low as 6%. If you have credit that slides down to the poor range, these loans are still often available, but you can expect to pay higher interest rates.
Whether you are looking for working capital loans for construction companies or other types of business loans in this industry, bear in mind that you usually need to 12-months history to qualify with a non-bank financer, and 2-3 years depending on the industry. The clear majority of lenders are not looking for start-ups that are newer than that as customers. If you are looking for alternative financing to support your construction company’s operations, contact us today.
Looking for Coffee Shop Loans? Here’s an Overview
It’s hard now to imagine a time when that signature green-and-white Starbucks logo did not loom at many major intersections. Coffee, once a freebie in many offices, became a high-end ticket item as consumers flocked to pay between $4 and $7 for that caffeine fix done just right. Many other competitors sprang up, and small business loans for coffee shops became a popular topic among financial professionals. If you are looking to expand your mom-and-pop coffee shop operation or are looking for loans for coffee shop locations elsewhere in your city, take a look at how the process would work, so that you can decide whether it would work for you.
Operating a small business successfully requires a careful balance. You have to pay attention to detail on both the service and marketing levels, and you have to work long hours – likely much longer than what you were working before you decided to go into business for yourself. When you hit a point where you can grow – where you need to grow to keep the momentum going – but you don’t quite have the liquidity that you need, then that’s where coffee shop business loans come in.
A lot of banks make getting that financing a real hassle. They take your application, but then they wait weeks or even months before they review it completely and render a decision for you. In the meantime, you’re waiting for your chance to grow. If the loan is for renovations or relocation, you’re stuck in a less than ideal location while the lending committee spins its wheels and makes you wait. Loans for coffee shops and other types of businesses are available from non-traditional sources – an area in which Best Bridge Capital (Amansad Financial) is gaining traction.
Small business loans for café owners are another way to go. If you have some collateral to put down (such as the building in which the coffee shop operates, equipment that you own and use to run the shop, or even another real estate property that is not part of what the business uses) then you have a higher chance of having your café business loans approved, and approved at a lower rate of interest. What about an unsecured business loan for a café? There are some lenders who will make this kind of loan, even some among the traditional banks.
Another alternative that has become very attractive to business owners is the unsecured merchant cash advance. This is a time of business loan for cyber café or other coffee shop owners that requires minimal documentation in the way of personal credit but needs a relatively high amount of sales via debit or credit card. You get the lump sum up front that is based on a factor rate, and then each day that you are open, a set percentage of your daily (or weekly) debit and credit income card receipts go to the funder. It is a bit more expensive that a traditional loan, however it provides the perfect bridge solution to get a business from point A to B.
What will you need when you apply for a Merchant Cash Advance or a Business Cash Loan Advance?
Plan to provide the following with the completed application:
- Copy government issued ID for all principal owners
- Business Articles of Incorporation
- Business License
- 3 to 6-month Merchant Statement History
- A void cheque with your company name
- Copy of Business Property Lease (if you rent) OR Most Recent Mortgage Statement & Copy of Land Title/Deed (if you own the property)
Note: Business Financials and Profit Loss Statements are required for advances over $75,000.
Taking out cash advance for cafes and other small enterprises does not have to be stressful. Let us guide you through the process, finding you the resources you need to be successful.
The Basics of Bakery Business Loans
When a business sells products or services that you can make in huge quantity, then a massive chain can outperform a mom-and-pop enterprise. However, when it comes to a business that suffers with mass production, as with a bakery, then even in today’s Internet-driven marketplace you can do quite well opening a muffin shop or a full-service bakery on a corner in your neighborhood. Taking out small business capital loans or merchant cash advances for bakery type businesses does not have to cause you a lot of stress.
So how can you apply for small business loans for bakery needs? There are some basic requirements that all lenders will have – whether you use the Amansad Financial lending network or not. You should have been open for business at least 12 months in most cases in Canada or the United States.
Why do you need to have been open for at least a year to apply for a business loan for a bakery? To be frank, lenders want to see that you have already put together some success before they will extend you that sort of credit, particularly without any collateral. When you have been open for at least a year, that tells the lender that you have not only put together a solid business plan, but you’ve had some success putting that plan into action. So many people put together business plans and then see those plans go up in smoke, because they don’t have the business sense to put matters into practice. If lenders gave unsecured business loans for bakery type businesses right at their opening, they would see a lot more of those notes go into default, simply because so many businesses go under that quickly. It might be a function of poor location, of a mistake identifying the degree of market saturation, or it might even be an illness that causes the owner to stop running the business. When you have 12 months of operation under your belt, even if the first few months were choppy and unprofitable, a lender will see that you have been able to right your own ship and that the loan is not simply good money going after bad.
If you take out small business loans for a bakery, you can use it for just about anything that will benefit your operation. So, if you want to buy new bakery equipment, if you want to buy a new computer system to manage your inventory, if you want to buy a property and use it as your location, you can do all those things.
If you look at some websites to read about small business loans for a bakery, you might read about a product called the merchant cash advance (MCA). These advances are usually available very quickly, which can come in handy if you are looking for quick money that can quickly benefit your business, and don’t want to jump through the hoops that some funders require you to jump through. Ideally, it’s suggested you explore your traditional options with your bank first. If your bank is unable to assist, get in touch with us for fast funding.
Below is a short list of general items required with a completed application to secure you the right MCA for your business:
- Copy government issued ID for all principal owners
- Business Articles of Incorporation
- Business License
- 3 to 6-month Merchant Statement History
- A void cheque with your company name
- Copy of Business Property Lease (if you rent) OR Most Recent Mortgage Statement & Copy of Land Title/Deed (if you own the property)
Note: Business Financials and Profit Loss Statements are required for advances over $75,000.
Beauty Salon Finance Basics
If you’re looking to get help financing a beauty salon, you’re far from alone. If you have put in the sweat and tears to get your small business up and running, and now you have reached a point where you can invest in some growth but don’t have the liquidity to expand immediately, then there are lenders out there that want to help you.
Of course, if you’ve just gone to a bank to get some credit, you may have found that beauty salon business loans are not always easy to get. Amansad Financial has relationships with lenders/funders that offer more flexibility than the big banks, but even with our lenders, there are some steps that you can take to make getting that loan easier.
- Show a steady cash flow for your business.
If you want to get finance for beauty salon operation, you have to show that you can make money? Why? Lenders want to profit off their investment, and they won’t bet on a startup that has not opened yet. However, if you show a year’s worth of growth and at least several months of steady cash flow, then you have a lot greater chance of gaining approval.
You show this by bringing in your tax returns, bank statements and other financials for the business. The lender will understand how your business has grown and how you have successfully maintained and increased liquidity. If cash flow dropped for a particular reason (you had three beauticians quit suddenly, renovations to the building where you lease your shop cut traffic by 75% for a couple of weeks), be prepared to explain it. Lenders understand that business cycles ebb and flow for a variety of reasons.
- Make sure your existing debts are within reason.
If you max out all of your business credit as part of your daily operations, you will have a hard time finding a loan. Lenders who offer business loans for hair salons are more likely to help you if you ask for help before you start running up big debt loads on business credit cards. When you ask for the loan, be prepared to explain why you need the money. Expenses like beauty salon equipment finance make sense, and lenders will understand why you need it, but you should still have the numbers supporting your expansion.
- Pay your existing obligations on time.
You can have the best business plan and the best expansion plan in the world, but if you have a poor record of paying your obligations, lenders will not want to deal with you. Why? Because they might talk about wanting to be helpful and to get your business off the ground, but the bottom line is that they are in the lending business to make money. If your business pays its obligations on time, whether it’s ongoing expenses or initial debts on which you are making payments now, then you’re much more likely to get what you want from a lender. Build a list of trading partners and vendors with whom you have built a relationship and to whom you have made payments on time. Having this list can help you gain traction with a lender who is asking the hard questions about other elements of your business.
- Show that you have solid business judgment.
How can you prove this in a lending interview? Even if you have been open for a couple of years now, many lenders will want to see your business plan. This shouldn’t be the plan that you wrote when you started the business; it should also have updates to your short-, medium- and long-term goals for your beauty salon. Your goals should be specific, including growth targets for your business. If a lender can see that you’ve put in the time to plan this far ahead for your beauty salon, then he is a lot more likely to grant you a loan.
- Take your request to several different lenders.
The loan business is just that – a business. Banks and other lenders need money, and if they reject all of their applicants, they won’t make any. But on your end, don’t necessarily take the first approval that you get. We always suggest that if time is in your favor to check your options with your bank or other like lenders. If you are unable to secure the financing you are looking for, get in touch with us for a Business Loan/MCA. Our focus is to provide bridge financing to help businesses from point A to B.
When applying with, you should have the following ready to provide with our completed application:
- Copy government issued ID for all principal owners
- Business Articles of Incorporation
- Business License
- 3 to 6-month Merchant Statement History
- A void cheque with your company name
- Copy of Business Property Lease (if you rent) OR Most Recent Mortgage Statement & Copy of Land Title/Deed (if you own the property)
Note: Business Financials and Profit Loss Statements are required for advances over $75,000.
Working Capital Loans Doctors Can Use
When you’re opening up your medical practice, you have in mind a future of financial freedom – combined with the satisfaction of being your own boss. However, in the early months and years of your practice’s operation, you may find times when you want to expand your business but don’t have the cash on hand to do so. Even later down the road, when you’ve built your single location into a success but then want to open a couple of other satellite locations, you may find that your liquidity is not sufficient to bring about the expansion you want at the quality that you know your patients deserve. That is where working capital loans for doctors come in, giving you the chance to expand now and keep growing your business.
One type of working capital loans for doctors is a working capital advance, or WCA. You get a lump sum of cash upon approval, and you pay it back from your future revenues, whether from credit and debit card statements or from ACH deposits through checks or other third party payors. The approval process is quick, because all the lender looks for is your payment history through those methods.
The downside of the WCA is the expense involved. You don’t have a monthly payment to make – instead, a set percentage of each day’s receipts goes to the lender, meaning that if you have a big day you pay more, but if you have a slow day you don’t pay as much – but the APR of this type of advance can run over 50 or 60%, or even higher. So you avoid a credit check, and you don’t have to personally guarantee the loan, but it costs a lot. It can be worthwhile, but those high costs are worth knowing.
Banks and other lenders also provide traditional small business loans for doctors, with regular monthly payments and set interest rates. Approvals can take up to a week in some cases, and while you do have that new monthly obligation to budget for, in the clear majority of cases your cost of the loan will be significantly less.
When you’re looking at traditional business loans for doctors, of course, you’re looking at a slightly more rigorous approval process. Instead of just looking at your credit and debit card receipts, lenders will want to look at your medical practice’s bank statements, and your revenue reports to see that you have the money to add payments on this new loan to your existing budget.
What can you use the funds from these loans for?
- Adding new equipment and inventory
- Expanding your advertising and marketing presence
- Acquiring real estate for multiple locations
- Taking care of outstanding obligations
- Business growth and expansion
- Additional working capital needs
Now, if you just opened your practice, you’re going to have a hard time qualifying for a business loan. Why? Even if you’re the best pediatrician in the city, you haven’t shown that you can manage a practice yet. Your manner with patients is definitely important – as are your skills in the area of diagnosis and treatment. However, running a business requires a different skill set.
Even if you think that running your family’s budget effectively is the same, running a business profitably is different; therefore, most lenders will want to see that you have operated your practice for at least a year before they issue a working capital loan to you. They don’t expect profitability for the whole time, but they do want to see that your revenues are building and that you’re working out the kinks of owning and operating your own business. Once you hit the one-year mark, that’s a good sign that your practice is here to stay. Even with some rough months in that year, if you show that you have a plan for expansion and that this plan has started to work, it is much easier to gain approval.
If you have other questions about taking out a business loan for your medical practice, contact us today. We look forward to helping you serve your community as a medical professional, and our network of lenders stands ready to help your practice go to the next level.