Get a Loan To Boost Your Business
When you run a small business, there may be times when you need a little extra cash. There are several different loans your company might get. Three options you might consider are commercial real estate loans, asset-based lending, and purchase order financing.
Commercial Real Estate Loan
A commercial real estate loan uses your commercial property as collateral for the loan. A lender might supply you with 60% of the value of your property so you can expand your building or buy a new property.
To get one of these loans, you have to show lenders that your business is a good investment. This means that your business has to have a good credit score. Many lenders prefer to work with companies that have a higher credit score because they have already proved that they are responsible with money. If the credit score is not as high as you would like, this doesn’t mean you can’t get a commercial real estate loan. Many lenders also look at your business’s cash flow. The cash flow shows lenders whether your company will be able to afford the monthly loan payments.
You can also use some of your company’s assets as collateral for a loan. You might use some of your inventory or your company equipment. You may also choose to use your accounts receivable as collateral.
Your company will likely need to show financial statements to lenders so they know you will use their money responsibly. Many lenders may also want to see what kind of inventory you sell, as well as your financial reporting system. All this information demonstrates that you know how to manage your business and will able to make loan payments in a timely manner.
Purchase Order Financing
If your business frequently takes large orders, purchase order financing may be a good option. This is a short-term loan that covers the expenses of a large order. The lender gives you the money so you can pay for the order. This can be especially helpful if your clients don’t pay for large orders until they receive them.
Unlike traditional loans, you usually do not need to provide any type of collateral or information about your business’s finances. Instead, you generally have to demonstrate that your business is capable of managing these large orders and has experience filling orders.
There are many ways to get extra money for your company. Once you have the necessary capital, you can fulfill your plans to make your business a success.