Our focus here at EMCOL is on small businesses. Many lenders put certain reqirements in place to ensure they can better manage their risks from issuing small business loans.
Lenders usually want to answer some questions before they give out loans to small businesses. So to better prepare for most loans, we ask that small business owners start first by seriously considering their readiness and preparedness with regards to the followings:
- Your Business and Personal Credit Scores and Ratings;
- Your Knowledge of the Lender’s Qualifications and Requirements;
- Your Financial and Legal Documents;
- Your Business Plans;
- Your Potential Collaterals; and,
- Your Plans in Place to Pay Back the Loans.
We help connect small business owners to reputed private and institutuonal lenders; and we match you with lenders based on the peculiarity of your situations.
Our Small Business Loan Products
- SBA Loans: An SBA loan is a government-guaranteed, long-term funding made by SBA lenders that allow businesses who may have been turned down by the bank to receive low-interest rate funding that can be used for many business purposes. According to Wikipedia, this is the United States Small Business Administration does not make loans in and of itself,but guarantees loans made by individual lenders. The SBA has a few types of loans, the most popular being SBA 7(a) which includes both standard and express options, microloans for loans up to $50,000 as well the 504 Loan or Certified Development Company program that is designed to provide finance for the purchase of fixed assets, which usually means real estates, buildings, machinery, at below marekt rates.
- Term Loans: The way term loans work is like the traditional bank loans that are setup with certain amounts upfront, which you then pay back along with fees, which is done over a predetermined period of time.
- Equipment Finance: In this case, the lender gives you certain amount of cash upfront to pay for the purchase of your desired equipment for business, or the lender outrightly pays the seller of the equipment directly and you then pay the lender back based on a preset agreement topay back the loan principal plus interests plus admin fees pver a set period of time.
- Business Line of Credit: Here, you get a credit limit from a lender, you begin to draw from your credit life line up to the maximum limit given, as you do in the case of a personal cedit card, you then pay it back monthly plus interest.
- Invoice and/or Purchase Order Finance: This is for those with contract orders from customers that have pre-ordered certain services or products on credit, i.e. with intent to pay at certain dates in the future, but because of your imminent need for cash, you sell the face amount of the purchase order contract or service invoice to lenders which then pays you a percentage of the value, usually like 80%, while they hold the remaining 20% to cover their risks until the invoice is fully paid to them by the customer. The lenders then take their fee from the balance, adn disburse the remainder to you to complete the transaction.
- Personal Loans: Some people with lack of sufficient business financial history may use this to get a headstart for their new business or to grow their existing young businesses. Examples of this are title loans, credit union personal loans, private lender micro-finance, etc.
- Startup Loans: New businesses get this type of loan to start and grow their new businesses. Startup loansd have other versions such as equipment finance, invoice and/or purchase order finance as well as business line of credit as described above.
- Floor Plan Finance: Retail floor plan finance is also referred to as “Retail Floor Planning” or “Inventory Finance” or “Floor Stock Finance” is a type of short term loan used by retailers to purchase high-cost inventory such as automobiles. These loans are often secured by the inventory purchased as collaterals.
Choosing The Best Option
We know that choosing the best option for your needs may not be that easy, especially with so many different loan programs out there.
So with that in mind, we ask that you use this checklist:
- DEFINE your needs
- IDENTIFY the role of your credits: business and personal
- LIST your preselected loan options
- CONTACT US for more information and insights
- APPLY for shortlisted loan programs
As our headliner suggests, small business is not for the faint-hearted, its for the brave, the patient, the persistent, and the overcomers; so in light of this, we cannot over-emphasize your need as a business owner to carefully weigh your options well before you choose, be patient but be persistent, Do not wait until you are in dire need before you process your needs otherwise your actions will be too “desperate” to be seen as proper clear thinking.
Helpful Documents for Loan Applications
- Personal Background Information
- The Owners’ Resumes
- Personal Credit Report
- Business Credit Report
- Income Tax Returns for at least 2 years
- Your Business Plan
- Financial Statements
- Bank Statements
- Your Business Legal Documents, e.g. Business Licenses, Articles of Incorporation, Franchise Agreements, Agreements with Third Parties like Memorandum of Understanding (MOUs) and Joint Venture Agreements, Commercial Leases, Service or Purchase Orders, Employer Identification Number (EIN), etc.
With all these said, also noteworthy is your ability to answer your potential lenders’ questions such as the followings:
- Why are you requesting for a loan?
- How will you handle the loan?
- Who are your suppliers?
- What equipments need to be purchased? – make, model, year, specs, etc.
- What business debts do you have thus far?
- How do you plan to pay back?
- What is your exit strategy IF everything fails?
- Who are your management team members and what are their profiles?
- What assets do you have available?
So your preparation is key to seizing oportunities.
Be thoughtful. Be Intentional. Be prepared.
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