For small and medium business enterprises, there is always a need for funding. Right from the initial idea of kickstarting the business till all the management purposes, there is a need for capital. Large enterprises are able to gather finances easily but the case is not the same for small and medium business. Given the contribution they have towards economic development, it is mandatory for financial institutions to fund them. They encourage both self-employment and overall employment opportunities for the country.
The funding companies
All over the country, there are a number of companies that provide financial aid to the small and medium enterprises to get them going. One of the companies is the business backer. Located in The United States, the company provides a lot of financial options to the companies like –
- SBA Loans (small business administration)
- The business line of credit
- Long-term and short-term loans
- Equipment financing
- Merchant cash advances
- Commercial real estate financing
- Invoice factoring
- Start-up loans to fit a variety of business needs
The loans are tailor-made to suit the requirements of SME provided all the necessary documentation is ready.
How to choose the lender
There are a variety of loans offered to the businesses by the lenders but before getting into that, it is essential to realize the main agenda behind taking up the funding. There are a few questions which need to be answered –
- How much money is required?
- What is the reason for the fund requirement?
- Time needed to pay back the loan
- How old is the business?
- Current financial status of the business
- Collateral used for the fund
- The current credit score of the business
- Other outstanding loans, if any
- The loan requirement is short-term or long-term
After all these questions are answered, there are a variety of loans which will come in sight. The goal is to choose the one which best suits the demands of the enterprise.
Kind of lenders
There are a variety of lenders available, all having their own pros and cons list. There is a need to scrutinize all and then see what kind is the best.
- Small business administration loans – It offers a variety of loan programs for different kind of businesses. Here, the government will not lend the loan directly. Rather, the guidelines are set by the partners (banks, community development organizations, and microlending institutions).
- Conventional bank loans – Loans from conventional banks is an easier option because of the lower interest rate and faster approval process but the repayment time period is short and may include balloon payments at times.
- Alternative lenders – They attract most of the SME as they offer online applications and the loan is approved in a few hours only. It provides a variety of loan options from different lenders.