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The majority of small businesses get their financing through personal funds coming from their savings or loans from family members. While this may be sufficient to get things started, more often than not, additional funding is required to move things forward.
Small businesses take out commercial bank loans for a variety of reasons. Banks are likely to loan money to existing firms that want to purchase real estate in order to expand their operations or own their own office. Bank loans for real estate are usually in the form of a secured mortgage and in many ways act like a traditional home mortgage.
While it may sound straightforward, securing business financing can be challenging. Especially for smaller establishments and new start-up companies, banks and lending institutions can be rigorous in their business lending qualification review practices. By contacting LOANLYNX we can provide the expert support and knowledge that you need to get the best loan possible. As such, small business owners need to exhibit the Three (3) C’s in order to increase their likelihood of successfully securing an approval for their business loan application.
The 3 C’s
Showing capital may be the most difficult part of getting a loan for a new business, because new businesses ofter do not have equipment and facilities yet. However, if a business has been in operation for a considerable period of time, it helps to bring a list of all assets that will strongly serve as security for the loan. This is most applicable to small business owners seeking capital for expansion purposes.
Credibility is paramount. The most important thing to know about small business bank loans is that you are often judged based on your personal credit. As such, it is important to provide seasoned credit history. More so, an ideal candidate is expected to showcase that he or she has financial reserves and solid cash flows to endure business fluctuations and still pay off his or her loan.
Since debt financing introduces another level of risk to a small business, lenders also require some form of protection. As such, it is mandatory ofr business owner to declare personal funds or business funds that the lender can seize in the event that a borrower will be unable to pay the loan. If a buinsess owner does not have any assets, the bank may require you to hae a co-signer, that is, another legal entity who has cash to pledge against the loan.
Business owners can apply for different loan types with varying interest rates and subsequent terms. As such, it is important for business owners to evaluate the different business lending sources available in the market and their implications towards the financial performance of their companies. It often helps to consult experts that will guide you through every step of the process.
For more information about securing a business loan, contact LOANLYNX at –888-501-5969 or Click Here to schedule a consultation to speak with one of our business funding specialists. We will properly assess your position, pro form, and projected performance.