According to the national Association of the Self-Employed, (NASE), a little under 80% of all small businesses are begun by self-employed people. According to Wells Fargo, those same individuals will try to use their personal savings account as their start-up money and risk losing everything to realize their dream of owning and operating their own small business. The unfortunate reality is that over 60% of small businesses will fail within the first four years without the proper marketing and business plans. That is why it is so important to consult with professionals in the area of financing, like Moneybanker, in order to ensure you are not only risking our personal wealth, but that you are beginning the journey of a small business owner with the right amount of capital to grow your business on a slow and steady course. Consider some of the following advantages and disadvantages to taking out a small business loan.
Lower interest rates: If you choose to consider a small business loan, you will usually be able to secure one at a much lower interest rate as opposed relying on using credit cards or cash advances.
Multiple Loan options: Ask your lender what types of loans are available for a small business owner. There will often be certain types of incentives that are offered for this type of loan that could offer you a much lower interest rate than a just a personal loan. These are entrepreneur incentives that entice potential business owners to take advantage of lending perks.
Tax incentives: The potential for small business owners who take out a small business loan to receive some tax break at the end of the year is very good. This is usually because the government will allow for a small business to retain a profit margin to pay forward to the running of the small business for the coming year. Make sure that you ask your lender questions about loans that may offer the best tax incentives.
Convenience: The convenience of payment over extended periods of time – Sometimes with the option of credit card borrowing, the more you borrow the larger the minimum payment each month. This can, unfortunately, lead to a greater amount of interest being paid as well without much room to extend the amount of time to pay the debt off. Lenders, on the other hand, can offer 10, 15, and even 25-year loans that will not balloon over time that gives a new small business owner time to increase their cash flow.
Larger loans: In 2005, the United States Small Business Association allowed for an increased amount that new small business owners were allowed to apply to a lender for from $1 million to as much as $1.5 million. This includes potential small business owners who may not have collateral to offer.
Application Process-Depending on what lender you deal with, the application process for securing a small business loan can be very detailed, full of paperwork to fill out, and a long process of verifying dozens of pieces of information. So, you want to make sure that you have as much of the necessary information on hand BEFORE you meet with a lender and discuss the possibility of a small business loan.
Collateral: Depending on the lender and how much a potential small business owner needs, there may be assets that have to be put up as collateral in order to be considered for a loan. This is a common practice, and it is usually personal property like a house or other real estate. If a loan is not paid on time on a consistent basis, then you can run the risk of losing that property.
Amount of Loan: There is always the possibility that a lender may look at your business plan, which is usually part of your application, and see some potential for a successful small business but decide that they cannot fully finance your start-up. They may choose to give you half or up to 80% of what you need. You may have to have a backup plan to secure the rest of the capital you need. So, find multiple lenders in case you need them.
Prerequisites: Know what you are up against before you go into a small business loan with the idea that no matter what, they will look at your business plan and love it. Many lenders have their own list of conditions that a potential small business owner may need to satisfy before they are even considered for a loan. This will probably include your credit history. It may also include the potential profitability of the type of business you are thinking of opening. So, make sure you have some statistics on hand to show your lender that show a positive market for the product or service that you are thinking of offering.
So, there are many advantages as well as disadvantages to take into consideration when you make a decision to pursue a small business loan.
Learn more about your best options through Moneybanker.
Your Business Needs These 13 Digital Security Solutions – Here’s How To Get The Most Out Of Each
How would you characterize your organization’s digital security posture? If you’re not sure how to answer this question, or perhaps would prefer not to answer it at all, you’re not alone. Countless decision-makers, from uber-competent CTOs and CISOs to CEOs and COOs who couldn’t code…
Louisiana And Oklahoma Introduce Digital Identification To Prevent Fake ID Use
Digital ID in Louisiana Utilizing digital IDs has been a commonly broached topic for a while now. Although most states are only either deliberating their helpfulness or in the utmost initial stages, Louisiana has moved forward. The primary introduction of this technology was done back…
ScanGuard Review – Here is What You Should Know
Doesn’t it sound good and satisfying to have a goop-performing antivirus that is reliable enough? Yes, it is. For that reason, you need to be extra careful when you are in search of a good antivirus. Put all the necessary factors into consideration so that…
The Emerging Need for Social Media Security
By the time you’ve finished reading this sentence, nearly 700 passwords have been stolen from social media accounts across the world. Social media security breaches have the potential to cause up to $6 trillion in cybercrime damages by 2021, up from $3 billion in costs…
Which New Lorex Security Camera Is Right for Your Home?
Keeping your family and your possessions safe requires a proactive approach, and one way to protect what you care about is with a security camera system. Lorex Technology is well known for their security camera solutions, and their two newest products will change the way…
- 3D Printing
- App Dev
- Artificial Intelligence
- Arts and Entertainment
- Big Data
- Blockchain Tech
- Business Technology
- Car Technology
- Cloud Computing
- Cloud Storage
- Computer and Technology
- Conference Calling
- Coupons and Deals
- Cyber Security
- Dark Left 1
- Data Center
- Data Recovery
- Digital Arena
- Digital Marketing
- Edu Tech
- Email Marketing
- Google Glass
- Guides and Tutorials
- Health and Fitness
- Home Improvement
- Home Security
- Internet and Businesses Online
- Internet Marketing
- IT Careers
- Mobile Apps
- Mobile Security
- New Tech
- Online Shopping
- Project Management
- Reference and Education
- Reputation Management
- Sales & Marketing
- Shopping and Product reviews
- Small Business
- Social Media
- Tech Trends
- Technical Support
- Technology in Education
- Tips & Tricks
- Tips And Tricks
- Video Conferencing
- Virtual Reality
- Wearable Technology
- Web Design
- Web Development
- Web Hosting
These 4 Homegrown Industries Are Benefiting From Trade Policy Today
Trade policy is complex — and controversial. No matter where you locate yourself on the left-right divide, you can probably think of at least one friend or family member who vehemently disagrees with you on this particular issue. If you’ve taken the time to ask,…
Mathieu Chantelois, VP At The Canada Media Fund, Discusses Leadership Communications, Proudest Accomplishments
Mathieu Chantelois is something of a Renaissance man. At various points in his career, he’s worked as a magazine editor, a professor, a television presenter, a highly regarded journalist, and as a communications and marketing executive. Chantelois’ engagement in various social causes led him to…
How To Become A Cyber Security Analyst
What is Cyber Security? Cyber security is the practice of protecting a system or network from digital attacks. These attacks are generally aimed to retrieve or destroy sensitive information and it is a serious threat to all the organizations. Who is A Cyber Security Analyst…
Internet Security Tips For The Modern Age
The internet is no longer new. It’s been in most peoples homes for twenty years or more now, and we’ve all come to accept it as part and parcel of modern life. When it first began, it was something that we only had on our…
How to Immediately Improve Your Online Security
While the internet might seem paradisiacal, danger lurks in the obscurity of it. Apart from outsourcing your IT needs to specialists like IT support companies in London, there are immediate measures you can take to ensure your online world is as secure as the home…
Everything You Need To Know About Cybersecurity In 2019
With long workdays and jam-packed weekends, it’s a godsend that we can do most of our shopping, social interaction, and many other day-to-day tasks from the convenience of our computers and mobile devices. The internet has been making our lives so much easier for the…