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Insights and Expertise

May is Small Lines of credit

Getting a business line of credit is a desirable option
Business Month since it provides flexibility and caps the credit line to an
amount of money a borrower can reasonably handle. Upon
Here's a cheat sheet acceptance, the owner can take as much as needed up to
the maximum allowable amount. There’s no requirement
to pay for more money than used or needed. And unlike
loans, there’s no prepayment penalty.
The borrower can make monthly payments or remit the
full balance whenever it’s convenient. So a line of credit is
more flexible than a small business loan and usually less
expensive than a credit card.

Unfortunately, this option is not ideal for businesses
attempting to get off the ground. While terms and
conditions are determined by the source of funding, they
typically conform to a general set of standards. Business
owners must prove continual years of business operation
(usually at least three), a personal FICO score in good
standing, and the business must have an annual gross
revenue of at least $500,000.
By Chad Otar Grants
Lending Valley Grants are a way for small businesses to acquire capital
o honor the work of small businesses, May has without need for repayment, and these usually come from
been designated in the United States as Small government agencies. They provide assistance to just about
Business Month. Small businesses are the life- any type of business providing a wide range of goods
T blood of the United States, and this is a wonder- and services. There are grants for women, minorities,
ful way to highlight their vital contributions and functions biotechnology, art, self-employment and so much more.
to the neighborhoods and societies they serve.
The guidelines and rules for grants and how to apply for
But what makes any company successful is solid capital. In them vary greatly. Therefore, visiting https://grants.gov is
this article, I’ll discuss how small-business owners can get essential. The website displays a list of all available grants
financing to see their dreams materialize. These include and contests offering free money to a variety of small
loans, lines of credit, grants, crowdfunding, investors and businesses. The drawback is these are highly competitive,
alternative funding options. and nothing is guaranteed. A small-business owner may
apply for dozens of grants and never see one cent from
Loans them.
Loans are a popular go-to for small-business owners. It’s Crowdfunding
great for startups that don’t have enough capital, and it’s
excellent for longtime businesses that can prove their Depending on the goods and services a business offers,
value versus risk factor to a bank. To ensure approval, setting up a crowd-funding page may be an excellent
an applicant should prepare a business plan, five-year way to acquire needed capital that does not need to be
financial projections, expense sheets, revenue versus paid back. This is because contributors to. Contributors
expenditure tabulations, and any other pertinent fiscal to crowdfunding campaigns don’t take part ownership
information that shows the business is in a position of low of the business and will not receive repayment. Instead,
risk. they typically receive some sort of gift or special perk in
gratitude for their donation.
However, even if a bank deems a loan risky, there are
other avenues to explore. For instance, the Small Business This is an excellent option for business owners setting up
Administration (SBA) in the United States offers its own an animal rescue, creating a documentary or engineering
loans or can provide a guarantee backing for someone a a physical product—anything that serves the purpose of
bank finds risky. The pitfall here is that loans can be quite doing good for society at large. However, crowdfunding
stringent in their requirements and tend to take a long time isn’t necessarily ideal for starting a beauty salon, mechanic’s
to process. The smallest tax infraction, past bankruptcy or shop or food truck. The only exception to this would be if
accounts payable delinquencies may cause a bank to reject such a business provided its services for the social good.
the loan altogether. For instance, a mechanic’s shop that specializes in hiring
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