Flexible Small Business Loans 2019 to Give Wings to Your Entrepreneurship Dreams

Most of the people nowadays especially literate youngsters do not like to work under someone and want to run their own businesses. The only obstacle they face is lack of funds to start their entrepreneurship career but the U.S. government has made it possible to support the startups via small business loans for the betterment of the youth and retired citizens. These loans are available to newbies to start a business, purchase inventory, equipment, purchase business land or boost an existing business.  According to a report from the National Small Business Association, about three-quarters of small businesses succeeded to acquire sufficient funds near the end of 2017, and small business loans contributed largely to it.

Best Small Business Loans of 2019

Below is the list of the lenders who are reliable for most businesses to begin in 2019.

• LendingClub: Best Lender for Fixed-Rate Term Loans
• OnDeck: Best lender for small business loans of up to $500,000
• BlueVine: Best Lender for Fast Funding
• Funding Circle: Best Lender for Small Business Loans With No Minimum Annual Revenue
• StreetShares: Best Lender with Prequalification Available

What Benefits  Could be Derived from Small Business Loans ?

• Lower Interest Rate
• Fast Loan Processing
• Better Repayment Terms than Bank Loans
• Flexible and Higher Capital Amount
• Improves your credit score

What is the Qualification Criteria for Small Business Loans ?

The basic qualification criterion may differ according to bank standards and policies. A Solid Business Plan  must be always there, which states the legacy and size of the business because only those loan applications are taken into consideration which sounds profitable. Rest, here are few common requirements which are necessary to qualify for small business loans:

• A business plan above all(including projected income)
• Required loan amount
• Statement of Purpose
• Personal Credit score
• Business Credit score
• Business Duration (if apply a loan for existing business)
• Target Industry
• Entity type
• Business licenses and permits
• Proof of collateral
• Annual business revenue and profit (if apply a loan for existing business)
• Bank statements (if apply a loan for existing business)
• Balance sheet (if apply a loan for existing business)
• Personal and business tax returns
• Copy of your commercial lease
• Disclosure of other debt
• Ownership and affiliations
• Legal contracts and agreements

What are the 5 C’s in Small Business Loans ?

Here are 5 C’s: five factors that banks analyze to determine whether to approve small business loan application. They are as follows:

Capital

No bank will grant 100 percent funds required by your business. So, If are planning for a start up, the bank will require you to contribute 30% of the total funds and if you have applied for the loan for an existing business, then the bank expects 20% contribution from the business owner.

Credit

Credit comprises of applicant’s personal credit score, credit history and an analysis of credit utilization so it is advisable to do homework on up front basis. You can receive one free credit report per year from each of the big three credit agencies – TransUnion, Equifax and Experian. Check their accuracy and consistency and try to resolve if there are any issues to avoid the disapproval from the bank.

Capacity

Capacity represents borrower’s ability to generate income to pay off the debts. If an applicant is starting a new business, the bank assesses the global cash flow of the borrower which includes current personal income as well as projected income from the business. If an applicant has applied for a loan to fund his existing venture, the lender ask for the last three years tax returns of business which must reflect positive cash flow and profit. If, from all the records, the bank finds out that the borrower does nat have sufficient capacity to pay back, then one can bring a cash flow partner into the deal to get the guaranteed approval.

Character

Character does not ask for one’s personal charm here rather it states applicant’s business character that the bank needs to access. What is your experience in business, and in the industry in which you are going to operate your new venture? Were you skillful enough to manage profits and losses successfully in your previous business or for an employer? Did you work your way up in an industry and gained  required experience in multiple aspects of the past and projected business operations?

Collateral

If an applicant owns a home with a value of >20% equity, the bank will take a lien against your home as security for the business loan. However if you do not own a home and meet all other loan criteria, there is probability of receiving loan approval as unsecured.

The 5 C’s are not the barriers to arrange funds for your dream rather they are the path to get closer and surety of the financial aid. When they are aligned, there are bright chances of getting approval and bring success to your business goals.