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Every industry has its own set of challenges. So it probably seems odd that we’re writing an article that speaks to both construction and healthcare business owners. But it’s not odd at all. Obtaining a small business loan is a universal need. Your details may vary. But whether you’re managing a fleet of equipment or a busy patient load, it takes money. Especially if you want your business to grow.

These 10 tips will help you land the small business loan you need.

Tip #1: Be prepared

No matter what type of financing you pursue, your chances of success will be much higher if you’re well-prepared.

  • How much money do you need?
  • For what?
  • When?
  • Projected timeframe for repayment

Your business “vital statistics”:

  • Length of time in business
  • General financial condition
  • Collateral available, if any

A formal business plan is good, but at least be able to clearly explain how the money will benefit your business. If your credit is poor, be prepared to explain how you’re working to correct that. (The right small business loan products can help with that.)

Tip #2: Don’t assume you do not qualify for a small business loan

One of the biggest myths in the lending industry is that small businesses don’t qualify to borrow money. That’s just wrong. Giving up before you learn the truth about your options is giving up on your business. So talk to a small business lending expert instead. Get the information you need. Then you can get the financing you need.

Bad credit does not automatically disqualify you from getting business financing. Let’s face it. Bad credit happens, even to good small businesses. Your options may be fewer, but you do have options. United Capital Source (UCS) lending experts know exactly who to call to find you a deal you can afford. That way you can get the money you need now, with a program that will help improve your credit rating for the future. There are even programs for contractors with a discharged bankruptcy. Or tax liens. Be aware that bad credit will likely earn you a higher interest rate.

Tip #3: Learn what banks can do for you

You might qualify for a small business loan from a bank. Contractors often look to banks to finance heavy equipment, because it is so expensive. Medical practices and clinics sometimes need to purchase high-dollar equipment, too. Or you may be looking to purchase your building or buy into a larger clinic.

Banks like to loan large sums of money. In fact, big institutions actively compete for business from health care professionals. Wells Fargo’s Dave Kaneda says, “Everybody wants to earn doctors’ business, not just the loan, but the ancillary business.” He hopes you’ll transfer your deposits and other accounts to his bank, too.

That being said, many small businesses cannot qualify for a bank loan. Banks want you to have a solid, well-established track record when it comes to time in business, credit score and revenue generation. And even if you get that loan, a bank may not be your best bet when it comes to other financial needs. You need flexible options to manage and grow your business.

One of the biggest concerns small businesses have with traditional business loans is repayment terms. Monthly payments can be hefty for small business budgets. Especially if your cash flow is seasonal or unpredictable. Here at United Capital Source, we offer five different repayment options:

  • Daily
  • Weekly
  • Bi-weekly
  • Monthly
  • Percentage of credit card transactions

It usually takes weeks or even months to navigate the bank loan application process. For most small businesses, this just doesn’t work.

Tip #4: Learn what the SBA can do for you

You may qualify for an SBA-backed equipment loan even if banks have turned you down. You’ll still have to show sufficient ongoing revenue to repay. And of course you’ll have to put up collateral. That could be the equipment or property you’re purchasing.

The approval process and timeframe for an SBA loan is the same as for any other business bank loan. However, there may be a faster option for you. If your construction company or medical practice meets certain criteria, United Capital Source can link you with an SBA Marketplace loan. You’ll get your funds quickly, and you’ll get an attractive interest rate, too.

The SBA’s CAPlines program can be a good option for contractors or health care businesses. These small business loans are actually a type of revolving line of credit. That gives you plenty of flexibility regarding how you use the money.

Tip #5: Learn what small business loan alternatives exist

You wouldn’t use a grader to dig a ditch. You wouldn’t use a scalpel to set a broken arm. You use the right tool for each job. The same holds true in business lending. Today, there are many different types of financing vehicles for small businesses. Your job as a savvy entrepreneur is to match your business funding need with the most effective option. This can be confusing, to say the least. And terribly time-consuming. But we’re here to help. The first thing your UCS business lending partner will ask is, why do you need money? Among other things, you can borrow to:

  • Purchase commercial real estate
  • Purchase equipment and supplies
  • Hire more staff
  • Upgrade or expand office space
  • Fund up-front job costs
  • Acquire another practice or buy into a larger one
  • Consolidate debts
  • Increase day-to-day working capital

One of the things contractors and health care providers have in common is delayed income. Often seriously delayed. Contractors have to wait until the job – or at least key segments – are finished to see any money. In health care, reimbursements from insurance companies can take weeks or even months, and self-pay patients often take months to pay, too. Meanwhile, expenses march on.

Certain small business loan alternatives are ideal for smoothing monthly cash flow. That lifts a huge worry weight from your shoulders. And regular, predictable infusion of cash enables you to deliberately grow your business. That’s a lot better than spending time on frustrating collections efforts. Some of these alternatives include:

  • Accounts receivable financing – a third party buys your receivables at a discounted price. You get the cash right now. And you don’t have to worry about making payments, because this is not a small business loan.
  • Inventory financing – as an asset, inventory can sometimes be used as collateral. This works to purchase new inventory or secure a merchant loan for some other purpose.
  • Short-term business loans. Sometimes the unexpected happens. It could be something bad – a flood, a fire, a drop in revenue. It could be an opportunity – a bigger than usual construction job, for instance. Without ready capital, you can’t recover or take advantage.
  • Unsecured business loans, such as a business line of credit. Money is there when you need it, which helps you plan and budget.

Aside from improving your cash flow, these alternatives can give you the cash you need to purchase more equipment or supplies, hire more people, remodel your office or boost your marketing. Perhaps the greatest thing about these alternatives is that they are fast. That makes your small business more agile and competitive.

Equipment Leasing is another alternative for contractors and health care practices looking to upgrade major equipment. When the lease ends, you may want to purchase the equipment. Our UCS lending team can help you find the best option for that.

Tip #6: Team up with a small business financing expert

Your passion is medicine. Or building things. Not admin work. But the ability to wisely manage cash and debt are critical if you expect to grow your business. Getting professional help lets you focus on the profession you love. Including a financing pro among your team of business consultants is as important as having a CPA and an attorney.

When you team up with UCS, you get a true partner. Someone who knows the small business lending industry inside-out. Someone who cares about what happens to your practice or construction firm after the deal is signed. We invest time in getting to know your business. Your history. Your challenges. Your dreams. And your current financial need. Then we set to work matching you with the right financing tool for that need. We’re in it for the long haul, too. We’ll be there to help you plan proactively for future borrowing needs.

Tip #7: Shop around

Don’t assume the first prospective business lender you talk to is offering you the best deal. Interest rates, repayment or lease terms, extras such as loan-related fees, amount and type of collateral required and other details all matter. So does experience. If you’re shopping for a traditional business loan, insist on a bank with experience in your industry. If you’re looking for an SBA loan, insist on a bank with extensive SBA experience.

And then there all the other funding options out there. With a single call to United Capital Source, you can stop shopping. We’ve already done that. And we stay up-to-date on industry trends and individual lender changes daily. We’re ready right now to put you in the program that’s right for you. You can get back to business.

Tip #8: Beware of scams

Of course you want the best small business loan possible. But you know the saying: if it seems too good to be true, it probably is.As the economy picks up and businesses look to expand, other businesses want to cash in. You need financing, but you need the right financing, from the right lender. This is perhaps the best argument of all to work with an independent firm such as UCS. Our primary interest is your long-term success. That means protecting you from shady lenders or less-than-ideal deals.

Tip #9: Monitor your business health on an ongoing basis.

Think of it as preventive maintenance – busy small business owners can let details slide. But you have to have a clear picture of your financial position in order to make sound decisions. Frequent review uncovers problems when they’re small and more easily fixed. The American Academy of Family Physicians suggests you “check the vital signs” of your practice’s financial health on a regular basis. That’s good advice for contractors, too.

Just because you want it doesn’t mean it’s a good investment. Ender requirements aside, you should prove to yourself first that borrowing will benefit your business. A really great investment doesn’t merely pay for itself. It allows you to grow, by taking on more jobs or treating more patients. Or to grow your bottom line, by generating more income or working more productively.

Tip #10: Get a life

Seriously. Why do you want to grow your medical practice, or your construction business? To build more roads or treat more patients? No, you want to provide yourself and your family a desirable lifestyle. You can’t enjoy that lifestyle if all you do is work. Balancing work and life refreshes you. It gives you new perspective. And that makes you a better doctor, or dentist or veterinarian. A better landscaper, or home builder. Investing in yourself as well as your business shows prospective lenders you’re focused on the future. They like that.

When you let UCS do the heavy lifting for your small business loan needs, you can make better decisions. You’ll also regain precious time to pursue life-balancing activities.

Regardless what industry you work in, knowledge and preparation are key to small business loan success. At United Capital Source, we like Tip #6 best – contact us first. With one of our dedicated account reps by your side, you can get the right financing. You’ll get it faster. And you probably get a better deal. Best of all, you’ll have a long-term lending partner you can count on down the road.

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