You have probably heard a lot lately about venture capital loans and how they can be so beneficial to entrepreneurs. But what exactly is a venture capital loan and what are its advantages over conventional loans? Well, you may already know that venture capital loans are a type of private loan given to an entrepreneur based on the success of their previous business venture. This means that they were able to successfully repay the loan in a shorter period. And this is the main advantage of venture capital loans – the fast turnaround time.
But then what are the disadvantages of venture capital loans? And why should you consider them instead of conventional loans? First of all, there is a very high risk involved with these kinds of loans. Since the venture capital funds will be coming from private sources, you have to take that much risk just to get it. And you are also required to give up part of your private equity when applying for a venture capital loan.
So how do you manage this risk? One thing you can do is to take out a loan at a lower interest rate than the usual market interest. You can also get a co-signer to back your venture capital loans. This way, even if you don’t pay the full amount of your venture capital loans, you don’t lose everything.
However, risks aside, you still have other disadvantages when it comes to venture capital investment. One of these is that … READ MORE ...
A commercial real estate loan can help you get your business started or kickstart some growth. Here are three types of commercial real estate loans.
1. SBA 7(a)
A Small Business Administration (SBA) 7(a) loan is a good option if you have trouble getting approved for a traditional commercial real estate loan. These loans are provided by SBA approved private lenders and you must have been rejected for a standard bank loan to qualify. The down payment typically won’t exceed 15%, while the interest rate could reach 8.5%. However, the repayment term is fairly flexible and the loan can cover as much as 90% of the property’s market value.
2. CDC/SBA 504
This type of loan is also federally backed. One of the qualifications for approval is to meet the local community development corporation’s (CDC) job creation goals because the CDC provides 40% of the loan. These loans have fixed interest rates that typically don’t exceed 5.07% and the standard down payment is 10%. However, since the goal of the lenders is community and job growth, the loan and down payment amounts are relatively flexible. Additionally, the loan itself is suitable for a broad range of business prospects and there is no cap on how much you can borrow.
3. Traditional Commercial Mortgage
Traditional loans, by contrast, are private loans not managed by the federal government. For example, if you’re looking for commercial real estate loans Birmingham, your first stop will probably be a bank or private loan company. … READ MORE ...
New research in the Finance & Leasing Association has revealed that asset finance companies are cautiously optimistic about business lending over the next 12 months despite the troubles many firms have experienced in recent months.
Its most recent quarterly Asset Finance Confidence Survey, which questioned senior executives with the FLA’s Asset Finance Division earlier this month, found that 74% are expecting a rise in small business lending within the next three months. This is 6% higher than the corresponding study was undertaken three months ago.
An even higher proportion expect a rise in lending over the next 12 months (77%) within the hope UK businesses discover it easier to access the funding they need to have to grow and therefore boost the economic recovery.
The figures follow other recent news in the FLA that its members advanced 2.9 billion of new finance to SMEs within the final quarter of 2011 for investment in equipment and machinery. This, coupled with the latest figures in the Asset Based Finance Association revealing 16 billion was released to its members’ clients in Q3 2011, demonstrates just how effective asset-based finance has been at plugging the funding gap that Project Merlin has failed to fill, according to Bank of England statistics.
As a result, 72% of those surveyed expect a slight improvement in domestic economic conditions over the next 12 months, which is up 2% on the previous survey, which was conducted.
Geraldine Kilkelly, Head of Study and Chief Economist at the Finance & Leasing … READ MORE ...
When applying for business finance loans, the money you receive can be made use of on a variety of choices. One particular item may be the property for which the business will likely be positioned. In the event the construction you are going to be leasing demands improvement, you can make use of the funds for that. The funds can also be employed for any renovation or building that must be performed. The business will want supplies that you can use the loan towards. As an illustration, the buy of furniture, electronics, machinery you may need, and fixtures.
Finding Approval for Business Finance
Before applying for business finance, you may like to verify your business credit score. Ask the lending institution what is the minimum business credit score is necessary to be approved. You’ll want to know these details, so you don’t apply in the lending institution that your score doesn’t meet the specifications.
If 3 lenders do the check of your score and you aren’t approved, then the chances another lender will approve it are slim. Diverse lenders could demand diverse criteria to met, before you apply, ask for this information and facts. You may also search on the web at diverse lenders to view what they call for.
Distinctive Sorts of Business Loans Out there
There is certainly a lot more than one particular business loan that you may apply for. You can want to research each of them to create positive you try the single that finest … READ MORE ...
Now, numerous men and women are facing critical monetary troubles. A job loss – or maybe a much less than sufficient part-time job – a divorce, a foreclosure, or possibly a smaller-than-expected retirement fund can make it hard for many to produce ends meet.
How would you react if a family member asked you for dollars? Ahead of you make a selection, take into consideration this: an estimated 40% of Americans are usually not repaid in full for the largest loan they ever created to close friends or relatives, and more than 25% never obtain any funds back from their largest loan.
The National Foundation for Credit Counseling presents some ideas to think about when deciding no matter whether to lend or not to lend your retirement income to a loved one particular:
The influence on relationships among loved one’s members. What would take place in the event the borrower failed to repay you? If you’re a parent, will your other youngsters resent it? Keep in mind, it is important to help keep all loan requests confidential. Are there other choices? Could the borrower qualify to get a bank loan? When not ideal, could the loved ones member cash in their 401(k)? In the event the borrower cannot qualify as a result of bad credit, you are going to wish to take that into account just before choosing to lend.
Don’t be an enabler. Is this an unforeseen circumstance like a job loss or will be the borrower habitually in … READ MORE ...