The general qualifications for small business loans might seem pretty vague to the untrained eye. Growing demand? Got it. Steady cash flow? Got it. Impressive credit score? Come on, this is a piece of cake. True, obtaining additional business funding shouldn’t be as difficult as, say, running a successful small business, but that doesn’t mean it’s easy. Not all businesses were created equal, and revenue isn’t necessarily what sets them apart.
The truth is, all applications for business funding come with fine print, even if they don’t involve extra fees, terms or conditions. If this was not the case, companies like United Capital Source would be divvying out cash left and right since countless businesses hungry for capital meet the minimum requirements for approval.
WHAT WILL YOU DO DIFFERENTLY?
Arguably the most crucial qualification for business funding is steady or increasing demand. In most cases, borrowers have a loyal customer base they are looking to maintain or are faced with projects they cannot afford due to their size or quantity. An auto repair shop might be given enough projects to tie up 75% of their working capital, or a dance studio could be experiencing an influx of memberships too large to be satisfied by a single location.
But the demand isn’t all you need to be approved. You and your employees must also be on top of this demand, and know how what must be done to handle it. This can be tricky because the situation at hand could be completely new for your business, which has never before had to spend so much money to fulfill its obligations. Your business lender will therefore need to know exactly how you plan to use your small business loan, particularly in regards to the additions you will make to your business’s methods of productivity, budgeting, metrics, documentation, and so on.
Traditional business lenders like banks often find their clients defaulting on loans because before approval was granted, the bank did not ask for details about the proposed investment. At United Capital Source, we are legitimately interested in our clients’ work because even if a profit is drawn, we will not be satisfied unless the borrower’s business experiences dramatic growth and is put on track to long-term success.
HAVE YOU THOUGHT ABOUT MAKING OTHER CHANGES?
The next most important qualification is strong cash flow, which is determined through revenue as well as business expenses. You might think that it’s perfectly fine to not give your expenses a second look if revenue is exceeding expectations but your lender will not agree. In fact, some business lenders might even go as far as to say that cash flow is only strongest if the business is 100% certain it is only spending as much as it should be to maintain productivity.
A successful business owner knows that opportunities to cut costs are everywhere if you know where to look. You could negotiate deals with vendors you have formed relationships with, find an alternative, less expensive energy company, and decide whether to out-source certain services or bring them in-house based on how much they cost versus how much revenue they provide. Keeping business expenses reasonably low will also make it much easier to pay off your small business loan. When you are certain you aren’t spending too much money on anything, the less you you will have to worry about loan payments impacting cash flow.
PERMANENT VS TEMPORARY
It’s extremely common for a small business to fail shortly after achieving moderate success. Such businesses might have only achieved this success because, for a brief period, they were brand new, and had supplied a product or service that was popular for a notoriously fickle demographic. But the business doesn’t know it’s on its way out and might very well apply for additional funding when the going gets tough. A review by the business lender, however, will reveal that the potential borrower’s company isn’t capable of retaining a loyal customer base over an extended period of time or expanding into more profitable ventures.
Applicants who earn approval for small business loans are capable of long-term success because they know their audience and/or provide a product or service they can’t get anywhere else. They strive to be the best at what they do and are applying for business funding so they can keep their customers satisfied with quality service. As long as their company is up and running, their customers wouldn’t dream of giving their business to a competitor.
CAN YOU PROVIDE THE SAME QUALITY SERVICE?
By now, it should be abundantly clear that clients of United Capital Source know how to fulfill their obligations, keep costs down, and consistently provide the same quality service that brought them where they are today. Our small business loans are specifically crafted for businesses of this nature.
A business line of credit, for example, is geared towards investments that will directly influence revenue, such as marketing initiatives, financing receivables, or unexpected opportunities, that are even more lucrative than they are expensive, like large projects. Accounts receivable loans can help certain businesses that don’t get paid upfront make payroll or cover other monthly expenses while continuing to serve a steady stream of customers. Working capital loans, which include credit card processing loans a.k.a Merchant Cash Advance, could supply enough funding to keep a business running smoothly for several months while the business purchases new equipment or takes on new hires during the business’s slow season.
The aforementioned requirements are so important to us that we also offer unsecured business loans and bad credit business loans, since staying on top of your business’s demands is infinitely more important than owning property or a flawless credit score. Businesses that possess these qualifications might be on the smaller side or need cash almost immediately but we don’t care! United Capital Source does not discriminate against any business with a proven track record, and in just one phone call, will prove that we know a thing or two about staying competitive in your industry!