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Most enterprises rely on business loans to scale up their operations, purchase equipment, or consolidate high-interest debts. However, getting a loan is never easy, especially for firms that do not qualify for bank loans.

Most small enterprises have a hard time accessing adequate financing. As the business owner, you must find out the available options to keep your business programs running.

In this article, we will explore small business loans to consider. But let’s begin by looking at the importance of a business loan.

Importance of a Business Loan

Control

A business loan leaves you in control of your business decisions and operations. In some cases, your lender will not scrutinize how you use the funds. They will also not claim a stake in your business since your agreement requires you to repay the loan and all the fees and interest you agree on.

This is unlike when you get funding from investors. Some investors will ask for a percentage of shares in your business in exchange for funding. Some will also follow you to know how you use the funds and want to have a say in your business operations.

Customized Funding Options

Your lender may offer you different funding options aligned to your strategic plans. They may customize the loan for you and streamline the lending process to ensure you secure working capital quickly so that you can focus on reaching your business goals.

Fast Funding

Some business loans take about a day or two to process. If you are applying for an online loan, it may take a few minutes to complete the application and get the money wired to your account. Investor funding may stretch for about 12 months before the application, vetting, and releasing the money to you.

You can also access your lender easily since most of them have offices in most parts of the country. With their dedicated customer service experts, you will have someone to guide you through your application process in any of their offices. In addition, they require minimal documentation.

Transparency

When applying for a business loan, your lender will let you know the cost of your capital. This will help you plan your repayment schedule based on your projected business cash flow.

Excellent Customer Support

Business loan lenders go out of their way to forge a lasting business relationship that enables them to partner with you as you build your business. Besides lending you money, they will typically become valuable consultants that may offer you financial advice to grow your business.

Since they serve customers from different industries, they may customize solutions that give you a competitive edge.

While taking a business loan is an enticing idea, you should not decide without due considerations. Ensure you need the money and that you have a repayment plan. Here are some of the things to consider before taking a small business loan:

How Much Funding Do You Need

Ensure you know the exact amount you want to apply for before submitting your loan application form.  Consider the cost of equipment, transportation cost, or set-up costs to ensure the loan covers it all.

If you want to expand your business, consider the cost of additional stock, display space, and any transport cost you will incur to ship the merchandise. This will help you avoid taking a lower or higher amount than what your business requires.

Timing

Apply for the small business at the appropriate time. If you want to expand the business, the best time to take the loan would be at the peak season of your sales. If the loan is for buying new equipment, apply for it when you anticipate a good discount from the dealer.

Start the preparations early to factor in the time you need to apply, provide what your lender may ask for, and the loan to be processed in good time.

Your Credit Score

Get a copy of your credit report so that you can resolve any disputes on your credit score before applying for your small business loan.  Your credit score may determine the amount you qualify for and the interest rate your lender will charge you.

Shop for Alternatives

Traditionally, businesses rely on banks and credit unions to fund them. Today, you have alternatives such as merchant cash advance, as well as lenders with more flexible loan repayment plans. If you take your time, you may identify an alternative lender like Moby Cap with more business-friendly interest rates and repayment options.

Loan Terms

Read and understand the terms concerning processing fees, repayment period, and if there is a set payment date. Also, find out if there are penalties for early repayment and if the interest rate is on reducing balance. These terms will vary with lenders. Go with the lender with the best terms for you.

Simple Business Loans to Consider

Revenue Based Advance

This is the best loan for a business wanting to increase stock and sales but cannot access bank credit facilities. You agree with your lender on the percentage of your monthly revenue you will be using to pay off your balance.

That tells you there is no definite repayment period since the revenue and repayment installments will fluctuate from month to month. The loan is given based on revenue projection, and you do not require any collateral.

The lender does not need a company valuation to fund you. It also involves minimum paperwork, and the processing may take less than a month.

Pros

• The lender does not ask for collateral, equity, or processing fees. There are no hidden charges.
• Based on business cash flow
• Friendly to your business since you can modify the repayment structure if the cash flow fluctuates
• Fast loan processing with minimum paperwork
• Repayment schedule options including biweekly, weekly, or daily
• There is full disclosure. You will know the full amount you will repay, and there is no penalty for early repayment. This allows you to increase or decrease your installments depending on your sales volume

Term Loans

As the name suggests, term loans are designed to be paid back in fixed amounts over a predetermined amount of time. You will know your repayment period, stretching from 18 months to 5 years.

They are excellent for businesses wanting to increase their capital. Small businesses find these loans attractive since the installments are usually low and spread over a period.

You may choose a repayment plan based on your business projections. In some cases, you may choose to repay in fixed installments or increase the installments are your business grows.

Some lenders may give you a fixed interest rate on your term loan, meaning the interest rate will not fluctuate with the business environment. However, some may offer a floating interest rate that fluctuates with the business environment.

Pros

• They have long repayment periods and low installments
• You get fixed repayment installments, enabling you to plan your finances. You can choose a repayment plan that suits your business
• Fast processing

Invoice Factoring

This is a financing solution where you transact your account receivables like invoices with a financial institution.  If you work for an organization that delays before paying your invoices, you can the invoice factoring institution may pay you up to 90% of the value of the invoice, and you surrender the invoice to them.

Invoice factoring may shield you from delayed business operations like paying salaries and loans or getting merchandise for waiting customers. It may work well for you if you earn a high interest from the invoices to meet the invoice factoring costs.

In some cases, you may receive your invoice factoring cash the same day you present your invoice.  You can decide the amount of the value of the invoice you want the lender to advance you.

Once a lender has verified that your customers are creditworthy, they will release the money to you immediately. You will then wait for the invoice to be paid to receive your balance. Expect the lender to deduct their charges before releasing the money to you.

Pros

• You have uninterrupted cash flow even when your customers delay payments.
• You can get up to 90% of the value of the invoice to meet your financial obligation as you wait for payments from your customers.
• Invoice factoring shields you from bankruptcy.
• The creditworthiness of your customers is assessed.
• Fast processing
• Low interest rate with no hidden charges

To move forward today, contact us by email at info@mobycap.com. As a BBB-accredited business, we have experienced serving all industries and welcome the opportunity to work with your organization.

Get your funding from us in three simple steps where you apply securely, select a funding plan, and receive the funds in as little as one working day. We will assign you a dedicated agent to help you with your application process and to keep you updated about your account and our products.

Get in touch with us to speak to a funding expert and discuss your funding plan. You can get funding up to $5M.

Most small businesses desire to access working capital quickly and easily without having to put something down. Sadly, this is not an option in most cases. Most lenders want collateral to justify the risk. Additionally, lenders want to ensure that you are resolute while turning away fraudsters and jokers.

Unfortunately, not everyone has the money to put down in order to acquire the funds they need. Does that imply that you can’t get a loan without putting money down? No. If you can’t afford a down payment, there are different options to explore. Here are some of the available options:

Start with Business Term Loans

Term loans are the most common loans for small businesses. They permit a business person to borrow vast amounts of money with a longer, fixed repayment period. For term loans, once a lender determines you have a good credit score, healthy revenue, and several years in business, the lender will not require you to put money down.  Interest rates for term loans are lower than other financing options, making then an ideal option for those who qualify.

Explore Business Line of Credit

Business lines of credit are a fantastic choice for business financing, especially when you don’t have money to put down or collateral to offer. It functions similarly to business credit cards. Based on your qualifications, the lender will determine what amount to allocate you. When you need cash, you can then withdraw any amount up to the maximum allowable limit.

After borrowing, you will make weekly or monthly payments for the loaned money plus the interest. When you pay back the money, it accrues back to your credit, and you can use it again after you’ve offset the loan amount. Its interest rates range between six percent and twenty-four percent.

You Always Have Invoice Factoring

In invoice financing, you sell off your unpaid invoices to your lender. The lender will then fund you ninety percent of the total value in the invoices. The lender withholds fifteen percent as a fee and costs for processing your loan.

The invoices are your collateral, and therefore down payment is not required. Business financing is a fantastic option for businesses with long payment cycles and needs cash. Invoice financing is only applicable for enterprises that are already up and running.

Consider Revenue Advance

With revenue advance, your business pays back the received loan product via a percentage of future sales. You will have to set aside a specific percentage of future sales until you clear the advance. Therefore, it is a straightforward way of getting funding with no money down. It is a quick type of financing that typically takes one business day to process.

However, the amount your business can receive from revenue advances will primarily depend on historical and recent cash flow. Other influencing factors include your credit score and time in business. MobyCap, for example, specializes in substantial advance amounts and can go as high as $5 million for all qualified customers. Additionally, MobyCap is among the few lenders that waiver all up-front fees in the name of establishing long-lasting business partnerships.

Let us Support you

If your lender is unwilling to accommodate your needs, then they are not your best fit. MobyCap offers multiple flexible funding options including, merchant cash advances, business lines of credit, term loans, and invoice factoring.

In addition, Moby Capital provides fast, easy business funding up to $5M to help companies in all industries meet their goals. To move forward today, contact us by email at info@mobycap.com. As a BBB-accredited business, we have experience serving all industries and welcome the opportunity to work with your organization.

Securing government aid certainly saves money for an expanding business in the long term. But sometimes the wait time for receiving that funding can damage a business’s growth prospects.

In this case, acquiring a short-term loan that can be repaid with the government assistance allows a business to capitalize on the immediate growth opportunity and to gain the benefits of the government-backed assistance in the longer-term.

Though short-term loans come at a higher cost, your business’s ability to remain agile and adapt quickly to market conditions often can make up for that cost while waiting on longer-term government aid loans to come through.

Short-term vs. long-term loans

Short-term loans are exactly as they sound: loans designed to be paid off over a shorter period of time, like a few months to a year. They can, however, have flexible repayment plans. For example, a merchant cash advance is paid back through a small percentage of a business’s sales.

Long-term loans typically are term loans that are paid off at a fixed monthly payment over a period of three to five years, or longer.

Short-term loans often are smaller loans designed to help a business bridge a cash-flow crunch, but MobyCap has business loans available up to $5 million, much higher than many short-term lenders are willing to handle. Short-term loans of this size can be a vital tool for growth among businesses that can put the funds to work quickly and generate a large profit.

The great advantage of a short-term loan is the speed of the application process. Short-term lenders normally have you fill out an online application, then a representative will discuss the application with you on the phone and a final loan decision is made the same day, so your business typically receives the funds the next business day.

A Small Business Administration loan can take from 30 days to 6 months to process and fund, as you must work first through a local or online lender, who reviews your application then submits it to the SBA for a guarantee review.

Your business could lose out on an opportunity to expand to a new location, purchase much-needed equipment or buy out a competitor if loans are delayed too long. At worst, you could be looking at missing out on 3 to 6 months of profit these expansion plans could provide.

Pandemic-related programs

If your business is working through programs the government has established to help small businesses damaged by the pandemic, short-term loans also could provide a bridge that could help you survive, especially if you are seeking funding through the Economic Injury Disaster Loan programs. Processing for these loans was extremely slow in the beginning because of the high volume of applications. Since the program’s extension through December 31, 2021, the process has been speeding up closer to the SBA’s traditional 21-day processing time then 5 days to make payment once the application is approved. SBA is reaching out to businesses that previously applied but were not funded or were funded at lower levels than currently available.

You should be aware that if you did use Paycheck Protection Program funds to pay off a short-term loan, the interest you paid cannot be part of the qualifying expenses you must meet to have these loans forgiven. Short-term loans are considered unsecured loans, and these interest costs are not a qualifier under the PPP regulations.

If your business is playing the waiting game with a government assistance program, consider spending a few minutes today filling out our online application and discussing your options with our lending experts.

Call (737) 577-1180 or email info@mobycap.com to discuss how we can help you grow your business.

Unless your balance sheet is like that of Apple or Coca-Cola, you will probably need to finance your company through a business loan. In fact, even established corporations regularly get capital infusions to address their short-term obligations.

For small and medium enterprises, identifying a suitable funding model can be crucial. If you acquire funds from the wrong source, you risk losing part of your business or may end up locked into unfavorable repayment terms that could impair your entity’s growth for years.

In this detailed guide, you’ll learn the basics of business financing, common sources of funds for small and medium-sized businesses, and the steps of finding the right business loan.

Different Ways of Funding Your Business

You can finance your business in different ways, and all these are classified into two main approaches: equity and debt.

Debt

This refers to a line of credit or loan offering a stated amount and requires you to pay within a stated duration. To get most loans, you must have asset security. This means that your lender might obtain the assets if you fail to complete the loan repayment. You may also seek an unsecured loan that doesn’t tag a specific asset to secure the loan.

Equity

This involves selling part of the company, sometimes referred to as selling equity stakes.

Regardless of the type of product or its name, all business financing solutions fall under equity, debt, or a hybrid combination of both elements.

Here are the different methods that you can use to finance your business:

• Savings – The most straightforward approach to financing your company is using your own cash. In an ideal setup, most people save for a given duration then inject the money into their business. Despite being the wisest, safest, and most conservative approach, it limits the amount you can raise.
• Credit cards – You can also finance your business and extend the entity’s cash flow by paying suppliers with your credit card and earn certain protections, discounts, and other benefits. Though expensive, you can use cash advances as your last resort. The main setback with credit cards is that they directly link to your credit score.
• SBA Microloan Program – This little-known yet extremely beneficial program offers startups and small businesses up to $50,000 in loans. Most also provide management assistance, and one of the loan conditions can be training.
• Family and friends – You can also source funds by letting your friends and family chip in through equity investments, or you can request a business loan. However, using friends and family can affect your relationship if the business fails. You’ll also be forced into a form of partnership even if you don’t need one.
• Angel investors – These can be small executives’ groups or private individuals who can invest in your company through an equity purchase. They may share expertise, money, and guidance to aid business growth. However, there’s a risk of substantially diluted business ownership, especially when there’s no CPA or specialized lawyer to guide you through the equity sale structure.
• Lines of credit and business loans – This is the usual process where banks finance your business via a specific amount of money as a loan. Lines of credit offer revolving facilities that companies use where necessary and pay back regularly. But qualifying and getting this financing is complex, and the option isn’t viable for small businesses with little experience.
• Factoring – This business financing alternative has been gaining traction in the past few years. It’s a reliable source of funding if your customers pay their invoices slowly, leading the business to experience cash flow problems. However, factoring is only applicable if you work with government and commercial clients with good credit. You’ll only qualify if your organization has substantial assets and a proven track record of revenue generation.

How to Get the Right Business Loan for your Company

There’s no standard procedure for finding the right loan for your business. However, the following steps can help you find the right financing to meet your company’s short- and long-term goals:

Review Multiple Offers

Before you begin the loan acquisition process, you must first understand the available options. There are numerous lenders out there willing to support your business. However, all these offer lots of varying loan approval requirements and terms.

SBA 1 (a) Loans

SBA doesn’t offer loans directly but partners with its lenders’ network to serve small business owners. When looking for working capital, you can consider several loan programs, with 7 (a) being the most popular. You’ll only be required to provide collateral if the loan amount goes beyond $25,000.

For amounts beyond $350,000, lenders must collateralize loans, sometimes up to the loan amount. They may use your personal real estate if your business lacks sufficient assets for security. However, you won’t be barred from 7 (a) loans due to lack of collateral if you meet other thresholds.

SBA Disaster Loans

You can also apply for an SBA disaster relief loan if you experience losses due to an economic crisis or natural disaster. They also don’t require security for loans below $25,000, and you won’t be denied because you don’t provide collateral. If you wish to purchase equipment with the loan, you must provide up to 10 percent of the overall buying price as a down payment.

Alternative Lenders and Online Financiers

Another viable option when looking for business loans with minimal or no collateral requirements is to seek online and alternative lenders who can help you meet the company’s working capital needs. Some of the products that don’t present collateral requirements upfront include:

• Invoice financing or accounts receivable financing
• Term loan
• Line of credit
• Equipment financing
• Inventory financing
• Purchase order financing
• Merchant cash advance

You can also seek financing from peer-to-peer lending platforms that link small entrepreneurs looking for funding to investors who can pool funds and finance the business. This amount will be repaid like other loan forms with interest.

Understand What You Qualify For

Some business loans for small and medium entities are more complicated to qualify than others. For instance, SBA 7(a) loans require you to present an operating history of at least two years, meet the eligibility definition of a small business, and meet the minimum threshold for revenues and credit score. You also need to exhaust every borrowing option before you apply.

For web-based and alternative lenders, you may encounter more fluid requirements. For instance, having a lower credit score may not hinder you from getting invoice financing or merchant cash advance. You can also acquire startup loans easily from these sources, and most require an operation history of only six months.

• Evaluating your company’s overall financial position may involve the following activities:
• Reviewing your business and personal credit scores
• Creating vital financial documents like the cash flow statement or profit and loss accounts.
• Checking your company’s overall cash flow and key expenses
• Creating an updated balanced sheet

There are two primary purposes for reviewing your company financials. The first is determining your creditworthiness, and the second is to check your ability to repay the amount. Failing to pay it back can damage your credit score, limiting you from obtaining financing in the future.

Instead of loan interest rates, you may also encounter loan types that use factor rates to ascertain what you’ll pay as the cost of borrowing. This value can translate into a 2- or 3-digit effective APR (Annual Percentage Rate), and this depends on the loan times and how fast you repay the amount.

Understanding All the Terms

After a successful application and approval of your business loan, the next step is to review the terms and conditions. As you go through the loan agreement, check the APR, interest or factor rate, loan term, and repayment schedule. It’s also essential to ascertain the overall cost of borrowing, factoring in the fees and interest. Also, check out the applicable fees, such as the repayment penalty or origination fee.

You may have the best interests of repaying the borrowed amount, but the different requirements and terms can substantially impact your operations if you fail to fulfill your part of the bargain.

You’re in Safe Hands

Starting and running your company can be daunting, but the process can also be rewarding if you have the right business plan and financing opportunities. But getting sufficient capital for the business can is arguably the biggest challenge.

The most practical way to opt-out of this difficulty is to apply for a business loan. You have lots of options that you can try out, as highlighted above. Your choice of financing avenue depends on your business type, how long you’ve been operational, the company’s performance, position, and marketing opportunities. With the above process, you can easily find the best business loan for you.

Are you looking for a reliable lender to help you meet your business goals? Moby Capital is here for you. You can count on us for simple business funding of up to $5 million. We have decades of combined experience, and an accomplished team of finance experts can help you access the funds you need in as low as a single business day. Reach out for more details.

Getting the financing you need for your business can certainly be a journey. Businesses must gather documents, find the right lender, and get approved for the right amount that will help meet the business’s needs. Add the fact that there are various financing options available, and you can easily feel like you’re swimming in a pool of uncertainty.

If you’re a business owner, you’ve likely considered whether you should go with a traditional business loan or alternative financing. Traditional business loans have long been the staple for many companies in need of funds. But the reality is, traditional loans aren’t the only option and aren’t always the best option either.

Alternative financing is quickly becoming a more favorable financing option for businesses of all kinds. If you’re interested in financing for your business, read on to learn the common problems with traditional business loans, what alternative financing is, and the advantages of choosing alternative financing over traditional business loans.

Common Problems with Traditional Business Loans

While traditional bank financing has been the standard for a while, it isn’t as easy to get approved for a bank loan. Bank loans are difficult to qualify for, especially if you have a smaller business. This is because most banks prefer to finance larger loans since they are able to make more money off of them.

But smaller companies may not need such large financial banking or cannot afford a large loan. However, if the company isn’t able to get their hands on the funds they need, they’ll likely go in a circle trying to get approved by another bank or attempt to self-fund. This can be discouraging and ultimately impact the long-term success of the business.

Another issue with traditional business loans is that it can be difficult to obtain a loan if your business is new. In fact, some banks require that you be in business for at least 2 years. Some banks will additionally require you to have an established credit history.

Traditional banks also come with a lengthy process most of the time. For businesses, this can be a big deal especially if the demands of the business don’t allow you to wait. Along with this, some banks will require collateral or a large down-payment in an amount that is not necessarily feasible for the company, especially in the cases of a new business.

Ultimately, all of these combined issues can be overwhelming for business owners who need to meet the demands of their company. But alternative financing offers a better way for companies to operate more efficiently.

Understanding Alternative Financing

Alternative business financing is a great option when traditional financing doesn’t work. But businesses may also find that they prefer alternative financing due to the vast benefits that help support the needs of business owners.

Alternative financing is a type of lending that occurs outside the conventional lending institution. In general, alternative financing tends to be more flexible than traditional bank loans and has a faster turnaround time. There are many types of alternative financing avenues available. Therefore, businesses can confidently find a financing solution that meets their needs.

What’s an alternative lender?

An alternative lender is an organization that provides alternative loans to businesses. It’s important to note that ‘alternative lender’ is an umbrella term for several types of alternative lending models. These models include:

• Direct private lenders
• Marketplace lenders
• Crowdfunding platforms

What types of alternative lending are available for my business?

If you’re considering an alternative loan for your business, it’s important to explore your financing options to see which loan is the best for you. The good news is, the alternative lending space is innovative, enabling businesses to find the kind of loan they need no matter how small or large their company is. Here are 3 common types of lending available.

Lines of Credit:

This is a fixed amount of money that a lender gives to the borrower. With a line of credit, a business is able to draw from it to make purchases up until they’ve reached their limit and will only need to pay interest.

Short Term Loans:

These types of loans are scheduled to be paid back in a year or less. These loans are generally not offered by a traditional bank but are a common option for alternative lenders.

Installment Loans:

These loans can provide a lump sum of money to businesses, which is repaid to the lender at regular intervals.

4 Advantages of Alternative Financing Over Traditional Business Loans

Alternative loans are an excellent option for businesses no matter what kind of business you have. Compared to a traditional business loan, alternative business financing can provide better financing solutions, offer more flexibility, and give you the money you need in a timely manner.

Here are 4 advantages of choosing alternative financing for your business.

Alternative Loans Process More Quickly

One of the greatest benefits of choosing an alternative loan over a traditional business loan is the amount of time it takes from filling out the application to receiving the money in your account.

Keeping up with business demands is crucial. Unfortunately, businesses don’t have the time to wait to get the money they need to continue running their business.

Businesses should be able to quickly get access to funds the moment they have a need. Long waiting periods don’t just add stress to the situation but can actually negatively impact the business. This is why alternative loans are becoming a more preferred financing solution for companies. With an alternative loan, you can expect to experience a quicker approval period. In fact, here at MobyCap, we are able to get the funds you need in your account as fast as one day in many cases.

Ability to Work with Industries that Some Banks Won’t

When you think of obtaining financing for your business, you’ve probably created a checklist of things you need to increase your approval odds. Things like your business plan, business credit report, and financial statements are usually the first things to come to mind.

But what many businesses don’t realize is that even with all of your documentation in order, a traditional bank will not work with businesses in certain industries. For instance, if you have a cannabis business, a bank will likely avoid working with you due to the Federal Deposit Insurance Corporation (FDIC). Generally, the FDIC will not insure a bank that takes on existential risks.

Choosing alternative financing means you don’t have to worry about whether your business will qualify for a loan. Alternative loan lenders work with a wide variety of business industries — including those who have a cannabis business, making it easier than ever to get the funds you need.

Relationship-Centric Lending Solution

Another reason to choose alternative financing over a traditional business loan is that alternative lenders focus more on creating a relationship with the borrower and gaining an understanding of the business.

This is an important benefit that businesses should take into account. Traditional banks practice plugging in numbers in algorithms to determine a business’s eligibility. But these algorithms are not always in the best interest of the company, and therefore, leads to a higher chance of denial.

Alternative lenders will focus on building relationships with their potential clients in order to understand their needs better and help them get the approval they need.

This relationship-centric approach allows businesses to increase their approval odds with a lender. Not only that but establishing a relationship with your lender is great for business as you may need an additional loan in the future.

Custom Options for Strongest Parts of Customers

Even if you get approved for a traditional bank loan, the loan terms generally aren’t flexible or favorable to the business. This can be an issue for companies that have ever-changing needs.

For instance, all loans will have specific terms and conditions that you must adhere to. However, bank loans tend to have higher interest rates, and you’ll likely be charged a penalty if you want to pay your loan off early. In some cases, you could be paying interest on funds you’re not even using.

At MobyCap, we offer more flexibility through custom options that take into account the strongest parts of the borrower. This way, you know you are getting loan terms that fit your company’s specific needs and situation.

We can even modify payments if your business’s cash flow tends to fluctuate. This allows businesses to have access to cash flow without the worry of whether they will be able to pay the loan back

Ideal Candidates for Alternative Financing

Alternative financing is making it easier for businesses to get the cash they need to operate their company successfully. With that said, any business can take advantage of alternative financing. Here are 3 reasons why a business would want to choose alternative financing for their business needs.

• This financing option is ideal for small businesses that have been denied a conventional loan
• The bank does not offer the type of financing the business needs
• Your business has an immediate need for capital

Obtaining financing is an important step to a successful business. With the right financing, businesses can reinvest in their company and ensure that business operations continue to run smoothly.

Many business owners go down the route of traditional business loans. But qualifying for a bank loan can be difficult, has less favorable loan terms, and takes longer to get the funds in your account.

On the other hand, alternative financing has a quicker approval period and works with all types of businesses. Even more, alternative lenders take a relationship-centric approach to really understand their customers’ needs and goals and can customize the loan to fit their unique situation.

MobyCap provides fast, easy business funding of up to $5M to help companies reach their business goals effortlessly. Call (737) 577-1180 or email info@mobycap.com to discuss how we can help you grow your business.

With the stay-at-home orders stretching, your small business is struggling with cash flow. If you had applied for a PPP loan, but it was denied, you are probably wondering what other financing options are left.

What is a PPP loan?

The Paycheck Protection Program (PPP) is a loan program by the federal government to help businesses that were affected by the coronavirus pandemic. You don’t require any collateral, credit score, or personal guarantee to qualify for the loan. However, there are millions of small businesses and the loan program may not work for every business. It is for this reason you may have a PPP loan denied. If you get a PPP denial, you will need another financial resource for your small business. You must apply for the PPP loans through an SBA-authorized lender.

What are the reasons for your PPP denial?

The PPP loan has broad eligibility requirements. To qualify for the PPP loan, you must be a nonprofit, small business, Tribal concern, self-employed, sole proprietorship, or an independent contractor with 500 or fewer employees. Your business must also have been operational by February 2020. Other situations that can make your PPP loan denied include:

• Your business is engaged in illegal activity under federal, state, or local law.
• You have defaulted on a guaranteed loan from another federal agency within the past seven years.

Choosing the right loan

Getting a business loan may sound simple, but you’ll be overwhelmed by the choices that exist. We understand and that is why we give you this guide on how to find the right business loan.

If you have been denied a PPP loan, then you should look for loan options elsewhere. When choosing a loan offer, you should not go for the first one that comes your way. If you don’t give careful thought to the loan you take, you may end up throttling your business cash flow. There are several factors you should put into consideration when choosing your small business loan. Here are some factors you should consider.

Why you need the money

The first thing is to decide on why you need the loan.  What do you need to use the cash on and how will the loan help grow your small business? For instance, if you need a loan to improve your cash flow, you can decide on a line of credit. If you want the loan to buy a new building, then you have to go for a commercial real estate loan.

Loan amount

You should have an idea of how much money you need for your business. Be realistic and flexible when choosing the loan amount. Most lenders see the range you ask for as a reflection of how you understand your growth potential. It’s not worth taking a loan that is too small. Ask for a loan amount that is too big and it could be an issue. When comparing loan offers, look for the one that is just right for your business needs. You have to think carefully about how you’ll spend the loan amount you’ll be offered. When choosing the loan amount, find a balance between an amount that is enough to stay manageable and large enough to cover the business expenses.

Interest rate

The interest rate is a vital factor to consider when choosing loan options. You should ask for the annual percentage rate (APR) which takes into account the loan processing charges. With the APR, you can have an accurate estimate of the loan’s total cost. It is also advisable to ask whether there is a penalty when you repay the loan.

Loan term

Some loans have a repayment period of 6 months while others have 10 years. A multi-year loan can seem like a long time to be making loan repayments. For shorter-term loans, you’ll make smaller payments, and is the opposite when you have longer loan terms.

How fast do you need the money?

Fast cash is always expensive when you want business financing. The price will be higher when you want quick capital because need to cover any losses. If you can wait for weeks or months, then you’ll get an affordable loan.

Now you know how to choose a loan, the next question is where to get one. MobyCap has loan options that you can choose from depending on your needs. Call (737) 577-1180 or email info@mobycap.com to discuss how we can help you grow your business.

 

PPP loans have been the saving grace for most small business owners during these challenging times. The pandemic caused one of the most rapid standstills in economic activity globally, and these business owners were the worst hit.

The PPP has helped the government uplift as many small businesses as it can by increasing their chances of eligibility. For instance, business owners now don’t have to guarantee their loan personally, nor do they need to put up any loan security.

However, with millions of small businesses spread across the country, it’s understandable that some of them might miss out on a PPP loan despite the government’s efforts. The good news is that there’s more than one way to secure funding in the pandemic era.

We have compiled a list of alternatives to PPP loans to help American citizens keep their businesses afloat before the economic climate perks up.

But first, let’s take a look at why the PPP loan feels so elusive for some businesses.

Why are Some Businesses Still Waiting on Their PPP Loan?

You might be looking for other options because you haven’t heard back from your lender yet you submitted all the required documents.

It’s good to note that the lenders have dealt with millions of applications since the program started, and they are still processing a huge number of submissions. Even the SBA agency slowed down the number of applications they are approving to allow other lenders like credit unions to forward their applications.

Try not to panic if you haven’t gotten a response, and get in touch with your lender. They’ll confirm whether they’re in a position to offer you a PPP loan this time. That way, you’ll be sure if you need to wait or look for another similar program.

Why are Some Eligible Businesses Denied the PPP Loan?

Knowing why your lender denied your loan application is key to securing more financial resources in the future. Lenders usually put all applications under thorough review. They’ll confirm that the loan amount in the request is 2.5 times the business’s average payroll per month.

They also look at whether the documents a business submits prove the payroll costs on the application. If there are errors in the application or information that doesn’t add up, they either request a business owner to re-apply or reject the submission.

Re-applying might throw the application far back in the consideration list, and the lender may fail to get to the submission a second time.

What are PPP Loan Alternatives for Your Small Business?

There are other courses of action that you can take if you didn’t get a PPP loan or feel like the loan doesn’t work well with your business setup.

1. Use Free Opportunities Provided by Large Businesses

We saw a lot of companies step up in support of small businesses when the pandemic hit. Amazon and Google for instance had stepped up to help relieve some of the pressure on the businesses they work with.

One such remaining organization is the Lawyers for Good Government Foundation. They plan on setting up legal clinics that bring together many law firms and non-profits.

The clinics will offer guidance on programs that offer loans, grants, and other types of aid and how small business owners can get those opportunities. They will also have pro bono consultations to assist business owners with legal issues caused by the effects of covid-19.

You’ll also want to keep an eye out for large businesses you interact with. They might just decide to give some major support, or they already have some measures in place to help small businesses.

2. Apply for Employee Retention Credit (ERC)

The Taxpayer Certainty and Disaster Tax Relief Act of 2020 modified and extended the ERC till June 30 2021. It now allows eligible employers to claim a refundable tax credit amounting to 70% of the wages they were to pay to employees after the start of 2021 through June 30.

Employers are eligible if the government suspended their business operations, either fully or partially, to combat Covid-19. They can also apply if their gross receipts for the calendar quarter in 2021 are 80% less than the same quarter’s gross receipts in 2019. Read further on it here since it also accommodates employers that started in 2020.

3. Get Invoice Factoring

Your accounts receivable ledgers might be screaming sales, but the slow collection process immensely slows down your business. Your money will feel like it’s in a holding cell while you’re out there with expenses to cover to sustain the business.

Invoice factoring can allow a third party to purchase your uncollected deals at a discount. It’s perfect for businesses that need quick cash that they don’t want to repay.

Moby Capital has experts who can analyze your business and tell whether your AR is eligible for offers. You can get offers of up to 90% of your outstanding AR, which will allow you to get instant revenue to run your business.

4. Prepare for Future Aid Programs

Most businesses who didn’t get a PPP loan really struggled with having their financial documents ready at the necessary time. You should ensure that you have all documents, including your tax returns, in order so you’ll be ready anytime a relief program pops up.

Monitor your credit score to know where you stand since most lenders will check up on this to determine whether you’re eligible.

5. Get a Business Line of Credit

A business line of credit provides way more flexibility than traditional business loans. It gives small business owners cash up to a specific limit. The agreement is that owners use the funds provided when they need them, and they’ll only have to pay interest on the used amount.

While the rates differ, you can work with funding specialists like ours at MobyCap to get the best rates on your loan. Our team also goes further to provide a virtual line of credit that allows clients to access more funds before the initial debt is repaid.

6. Opt for an Economic Injury Disaster Loan (EIDL)

As good as it is, the PPP loan is not the only relief program out there. The EIDL is unique in that it doesn’t require businesses to prove that they can’t access funding from another source.

These are some of the eligible groups:

• Small businesses and cooperatives having 500 employees and below
• Private non-profit organizations
• Independent contractors
• Sole proprietorships
• ESOPs fewer than 500 employees

One can apply for an EIDL from the SBA’s website, which takes a little over two hours, or they can send the application via mail to their headquarters. The small businesses who want to apply need to qualify in terms of the owner’s personal credit score.

Religious, gambling, agricultural, and charitable organizations, however, don’t qualify for the loan.

7. Apply for SBA Microloans and Express Loans

The SBA has a microloan program that is perfect for very small businesses like freelancers. The loans can go up to $50,000, and they can use the money similar to an EIDL loan.

However, they might be required to get some training done to help upgrade their business with the money they receive.

SBA Express loans, on the other hand, usually give businesses credit decisions in 2-3 days. The loans are usually overwritten and issued by the SBA’s approved lenders, and a business can get an offer of up to $350,000.

Small businesses can also use the money they get from the loan for a wider variety of things like refinancing debt or acquiring real estate.

There are other types of SBA loans like 7(a) loans and 504 loans. All these SBA loans are attractive in that their rates are much like those of non-guaranteed loans. That coupled with flexible eligibility requirements and lower down payments make them a go-to.

For instance, if a business meets the minimum requirements, our team at MobyCap can offer these loans. The requirements are that a business should have been in operation for at least two years, and acquired a minimum annual revenue of $1 million.

The cherry on top is it should be a for-profit with a FICO score of 680+ and have no outstanding tax liens. Lenders, however, can make exceptions for enterprises faced with special circumstances.

8. Look for Term Loans

A term loan is an alternative that offers small business owners clarity on exactly how much they owe and how the repayment schedule is going to work.

Everything is discussed when the agreement is made allowing businesses to properly plan how they’ll spend their money with regard to their future. These loans usually have lower and fixed interest rates since business owners mostly opt to pay them over an extended period of time.

Due to their nature, term loans offer flexibility that is not usually seen in other types of funding, making them a classic favorite for small businesses. They also have a predictable payment schedule which is easy to plan around.

Conclusion

You don’t have to worry that your business will sink because of lack of funding. If you don’t know how to navigate the various alternatives, our team at MobyCap can handle the process for you as we have for thousands of other happy business owners.

Our years of experience allow us to be the best at offering flexible funding options like SBA loans, business lines of credit, invoice factoring, and term loans, just to name a few.

We can provide businesses with up to $5M, which is unmatched by any other company in our industry.

Click Apply Now to start your secure online application. You can also Contact Us electronically or call 737-577-1180 if you wish to talk to a funding expert about your situation. We look forward to hearing from you!

There are many reasons why small businesses take out loans. Borrowed capital can be used to invest in an expansion opportunity, offset inventory costs, improve cash flow, purchase equipment and build credit for the future. When used properly, the right loan will help to keep your business afloat and improve your bottom line. However, considering the numerous funding options available on the market, choosing the right small business loan can be challenging. So what should you focus on when choosing a financial solution for your business?

Read on to learn more.

DECIDE EXACTLY WHY YOU NEED A LOAN

Nailing down what exactly you will use the money on will help you borrow wisely. Before you begin your research, you should assess your current needs and set clear goals. This will enable you to not only identify the type of loan you need but also figure out how much you require. In the end, you will choose a loan that is likely to suit your needs and one that you can afford comfortably.

EVALUATE YOUR BUSINESS

The next step will be to determine whether your business meets certain loan requirements. Most lenders will consider issues like how long you have been in business, your creditworthiness, how much collateral you have to put up for the loan, your cash flow, your debt load and the industry you operate in. These factors will affect your chances for loan approval and influence the kind of loan you can get.

EXPLORE YOUR OPTIONS

You will want to choose a financial solution that will meet your exact needs and help you achieve your goals. When it comes to small business loans, the options available include business cash advance, invoice factoring, short-term business loans, business line of credit, equipment financing, SBA loans and long-term business loans. To choose the best option for your business, you need to understand how each loan works. MobyCap has experienced business funding experts who can help you choose the right loan option for your business.

Part of choosing the best loan product also involves finding the right small business lender. When comparing various lenders, take time to look at their loan offerings, flexibility and customer service.

CONSIDER THE INTEREST RATES

The interest rate on a loan affects the cost of borrowing. High interest rates make loans more expensive. When shopping around for a loan, the interest rate will help you determine how much you will be paying back each month. This will allow you to decide whether you can afford the loan, effectively helping you to reduce your risks. You should compare the interest rates charged by different lenders on their products before choosing the right loan for your needs.

LOOK AT THE REPAYMENT TERMS

Looking at the repayment terms will go a long way in helping you make smart financial decisions. Make sure you find out how long the loan term is and what the payment schedule looks like. You should also ask if you can pay off the loan early or whether you have to wait until loan maturity. A good loan will have flexible payment options, allowing you to choose what works for you depending on your cash flow.

ASK ABOUT APPLICATION FEES

Loan requirements vary widely from one lender to another. Some lenders will require you to pay a fee when submitting your application while others will not. To know the actual cost of borrowing, you should ask whether there are any fees associated with the application. It is also important to find out the types of fees charged if any. This will help you choose the best small business loan. MobyCap will let you know ahead of time if there are any application fees involved, so you can make an informed decision.

At MobyCap, we provide fast, easy business funding of up to $5M to help companies meet their goals. Our experienced and dedicated team will seek to understand your needs and develop customized funding options for you. This will ensure you enjoy competitive rates and terms on the loans. Call (737) 577-1180 or email info@mobycap.com to discuss how we can help you grow your business.

Before 2020, online shopping and processing payments with the use of credit, debit, and other forms of online payment weren’t new. However, as the COVID-19 pandemic spread across the globe, both residents and business owners were forced to make changes due to necessary social distancing regulations and stay-at-home orders. Payment processing provides businesses to operate beyond hand-to-hand cash or check transfers and provides convenience for both consumers and businesses. Whether you’re starting a new business or you simply haven’t ventured into the unfamiliar territory of payment processing, it’s not too late to get started. Online shopping and convenient, secure payment methods aren’t a fad that will pass when things go back to normal or reach a new normal. They’ve become a part of the shopping/payment process and most consumers expect businesses to use them.

What is a Payment Processor?

A payment processor is a company that handles your customer’s transactions. To do this, the company relays information from the customer’s credit and debit card payments between the customer bank and your bank (typically called the merchant bank). The payment processor determines if there are adequate funds in the customer’s account to complete the sale. As long as funds are available and the card is valid, the payment will be completed without any further interaction from you or the customer.

Payment Processing Terms

A payment processor is used so you can seamlessly accept payments from your customers, which means the entire process usually takes place without interruption or further required action on your part. Still, it can be useful to understand certain terms that surround the process so you’ll have a better understanding of how the process works. These terms describe the working parts of payment processing.

• Issuing Bank: This is the bank where the customer obtained the credit or debit card to make the transaction. It can be a credit card company or a bank where the customer holds an account and has been issued a debit card.
• Merchant Bank: This is the bank where you receive your payments. Whether the account is owned under the company name or your name, it’s typically an account used for business purposes.
• Payment Gateway: The software that securely encrypts your customer’s payment and sends it to the processor, is called the payment gateway. While it’s similar to the job of a payment processor, the tasks are not identical. The payment processor could be considered more like a vehicle that allows the payment to complete the circuit from customer to merchant, while the payment gateway is the communicator that informs whether a payment is approved or denied. Your merchant account may include your payment gateway.

What You Can Expect When Using a Payment Processor

If you’re new to the world of processing payments, the entire process can seem like a different language. Still, most of the interaction between your customer’s bank and your bank is completed without any effort from you. Here’s how the process works.

• A customer finds a product on your website, proceeds to your virtual checkout, and pays.
• The information from the transaction (card number and amount of sale) is encrypted to prevent fraud.
• The transaction information reaches the customer’s bank where it is either approved or denied.
• If the transaction is approved, funds are sent from the customer bank to your merchant bank and deposited in your account.

The first part of the process is usually completed in seconds. Still, the process isn’t complete until approval and the insertion of funds into your account. This part can take from 24 to 48 hours, up to several days depending on many factors specific to the transaction.

5 Steps to Getting Started with Payment Processing

Now that you know a little more about how payment processing works, it’s time to learn how you can apply the process to your business. Most customers expect to find your business online and often wish to make an online purchase or buy an online pick-up-in-store purchase immediately upon finding your product. In fact, 79% of consumers take relevant action on their phone before making a purchase. Many mobile phone users (67%) window-shop online for fun, and 77% of these shoppers make impulse buys. Without the use of e-commerce and the ability to process online payments, you could lose these potential sales to your competitors. If you’re ready to take the plunge and provide your customers with the convenience they expect, take these steps to get started using a payment processor.

1. Determine the Costs

As a business owner, you understand the benefits of investing in products and services that will grow your business. Getting started with payment processing can come with a variety of fees depending on your needs and current situation. There will be fees included with setting up a merchant account and securing a payment processor that meets your needs. Additionally, creating a professional website or digital storefront is an additional cost that’s often overlooked.

Don’t let the costs discourage you from expanding your business with a payment processor. MobyCap provides businesses with a variety of fast and flexible funding options to help you expand your business without the hassle of traditional business loans. With an easy application process and an accelerated path to funding, MobyCap can help you get the money you need to invest in the payment processor you need to provide your customers with the experience they expect.

2. Open a Merchant Account

If you haven’t done it already, you’ll need to set up a merchant account that will allow payments to be deposited. A merchant account is an account with a credit card merchant processor qualified to underwrite and settle your transactions. When a customer makes a payment, the funds will be deposited into a merchant account before being moved to your business account.

When applying for a merchant account, you’ll be required to provide information about your business including the type of your business, length of time you’ve been in business, your professional financial history, previous merchant accounts, and personal financial history. For individuals with a new business, it may be easier to obtain a merchant account from the bank where you already hold a personal or business account.

3. Find an Outstanding Payment Processing Company

In the same way that your customers can make payments in a variety of different ways, payment processors don’t all work the same way. Your payment processing company should provide options that meet your needs and allow you to provide your customers with an unbeatable experience.

MobyCap offers a variety of payment processing options that can be customized to fit each customers’ specific needs. While many companies provide one-size-fits-all options, MobyCap offers individualized solutions that cost a fraction of the price of bigger solutions with services you can’t use. With flexible services, the use of analytics, real-time reporting, and a payment gateway that allows users to accept payments into any web or mobile environment, your customized payment processing solution will have all the benefits major companies utilize.

4. Set Up Your Online Store Front

Now that you have a way to accept customer payments, it’s time to set up a place for your customers to buy your products. If you already have a business website, you’ll likely want to set up your digital storefront there. As a new business interested in accepting online payments, setting up a website is a good first step. Whether your business includes a brick-and-mortar store, or you sell all your products online, a website is a valuable sales tool.

Your digital storefront should make the purchase process seamless and as quick as possible for your customers. Setting up online payment forms and embedding a “buy now” button in your store will assist customers through the payment process. Your storefront can also be used to incorporate coupons and discount codes in the payment process.

5. Acquire the Tools You Need

Determining the tools you need to process payments will depend on your needs and the needs of your customers. Many software types allow businesses to accept payment and send out products. However, you may wish to invest in user-friendly software that makes the process easier for your customers. Additionally, you may need a system that accepts recurring payments and phone orders. Some businesses also use tools to accept credit and debit card payments for point-of-sale card processing and mobile payments. For many merchants, finding a suite of products provides the most affordable way to get all the tools you need.

Getting started with payment processing can seem like an overwhelming process, but when you break down the working parts and the steps required to get started, it’s a task that can be completed by any type of business. More importantly, having the process in place can mean a big pay-off for your business. Don’t let limited funds stop you from investing in your business. Use our online form to get in touch with MobyCap or email us at info@mobycap.com to learn more about our funding options and how we can help you prepare your business for the future.

Besides having loyal customers, businesses need the right tools to succeed. However, many medium-sized and small businesses find it challenging to buy the equipment. Luckily, there are alternative means of financing the business equipment other than paying for the tool at once. Equipment leasing is one such option.

What is Equipment Leasing?

Equipment leasing is when the business in question involves a leasing company’s service when acquiring the equipment. The firm then pays monthly dues to the leasing company while using the tool on rental terms. The equipment can be a piece of machinery or furniture.

The business pays the leasing company for the set period, and once done, they can extend the leasing period, end the leasing terms, or buy the leasing company’s equipment.

Advantages of Equipment Leasing

Below are reasons you should consider equipment leasing if you are small to medium-sized business owner.

• No Significant Effect on Cash Flow The most significant advantage of equipment leasing is that you don’t have to spend a lot on the initial expenditure. Leasing companies make it easier for small to medium-sized businesses to rent the tool they need without breaking a sweat.

  Moreover, equipment leases hardly require any down payment. This makes it possible for small to medium business owners to rent the tool they need without affecting their cash flow.

• Saves You MoneyMost small to medium-sized businesses lack adequate cash to buy new equipment. In case the owner buys the equipment, the company is bound to suffer financially before the money is recovered through profits.

  There is always something else that requires money other than buying equipment. For instance, the business can spend the money on hiring new staff,  increasing the stock, or even expanding the business premises.

• Effortless Equipment UpgradeRenting business tools saves you from the inevitable event of the equipment becoming obsolete over time. Tools that tend to become obsolete within a short period include computers and other technical equipment.

  In case the equipment becomes obsolete, you are free to end the leasing agreement and lease other new and advanced equipment. Some leasing companies allow technological upgrades and replacements without having to break the leasing agreement. This is per the terms of the leasing contract.

  Furthermore, renting equipment allows you to use high-end equipment that you would otherwise not be able to afford.

• Easy To AdapLeasing equipment makes it easy for your business to adapt to changes in the industry. For instance, if the company has leased machines that are no longer useful in the business, you can end the leasing contract and get other more suitable devices for your business. Leasing companies make it possible for small to medium-sized companies to remain flexible in terms of the equipment they use.
• No Maintenance and Repair CostsAs long a business has some equipment, they have to think of maintaining and repairing the equipment. Even though some equipment costs more in repairing and maintaining them, a business that rents its equipment does not have to worry about the tool’s maintenance and repair. The leasing company handles the repair and maintenance of the equipment under the lease.
• Effortless Disposal of EquipmentA business that has leased its equipment can entirely focus on its operations since they are not responsible for disposing of the equipment they hire. It is the responsibility of the leasing company to get rid of the outdated machinery.

Conclusion

Equipment leasing is an economical way to get the tools and machinery that your business needs when your budget is low. Thus, instead of stressing over the fact that you cannot afford a particular device, get in touch with MobyCap and let us help you lease the right equipment.

To move forward today, contact us by email at info@mobycap.com. As a BBB-accredited business, we have experience serving all industries and welcome the opportunity to work with your organization.