In The News

 

04 17 2015

04 17 2015

How to Know Which Loan is Right for Your Situation

Having the finances to run business operations is something that never really leaves an owner’s mind. But even having reserves of cash on hand or access to capital might not be enough in certain circumstances.

Consider this situation: A business has substantial cash flow for the interim but plans to inject new investments to fuel expansion. It will see a considerable squeeze on finances when it makes those moves. In that case, even having money saved up could fall short.

Securing financing is something that business owners know, but it’s essential that you receive funds tailored to your situation.

Short-term loans work better in some scenarios, long-term loans in others and there’s no single litmus test to tell you which one you need, but rather, an overall consideration of your entire set of needs.

  1. Define your scope of needs

Short-term loans work best when dealing with immediate needs like taxes and inventory, whereas a long-term loan would be suited for paying off a long-term asset like equipment and office fixtures. When borrowing this way, you avoid being saddled with a long-term loan that pays off a short-term budget item.

In most ideal cases, short-term loans serve the business owner best when he or she has an immediate need for financing. That need for as-soon-as-possible financing can come in many forms that businesses may otherwise try to plug with long-term fixes.

  1. Evaluate your repayment budget

Before taking on a long-term loan, business owners need to have a plan for repayment budgets. Longer-period loans carry extended repayment lengths, so you need to know that you’re using the financing right and will be able to contend with payments.

Often, businesses use long-term loans to finance real estate for expansion or entry into new markets or products and services. In doing this, they know the return they generate can pay for the initial investment. You’ll most likely be asked to put up collateral to secure a long-term loan, meaning property and other assets are put on the line.

  1. Develop a timeline

While you may have figured out whether or not you need a loan, when working with a traditional lender, weeks may pass and immediate needs can become festering problems. Paperwork that logjams short-term needs, and banks that are still lukewarm to commit to long-term lending to small businesses, make it difficult to get a loan in any respect. In that case, alternative lending solutions can be an owner’s best option. Merchant cash advances are one type of lending that cuts down on paperwork and processing to get business owners funds they need when they need them.

Upon examining your situation, it may come to light that short-term loans will provide you immediacy, and long-term may be more repayable — or neither type of loan structure may be right for you. In the end, it takes careful consideration of your entire scope of needs, repayment abilities and feasible timeframes in deciding any form of financing to pursue.

Find Out How Much Funding You Qualify For

Fields marked with an * are required
By clicking this button I agree to all terms and conditions.

Terms & Conditions

General Acceptance

Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.

 

US Patriot Act:

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan. What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number. We will also ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

 

For Loan/Merchant Services:

The Merchant and Owner(s)/Officer(s) identified in the application (individually, an “Applicant”) each represents, acknowledges and agrees that (1) all information and documents provided to National Funding, Inc. (“NF”) including credit card processor statements are true, accurate and complete, (2) Applicant will immediately notify NF of any change in such information or financial condition, (3) Applicant authorizes NF to disclose all information and documents that NF may obtain including credit reports to other persons or entities (collectively, “Assignees”) that may be involved with or acquire commercial loans having daily repayment features and/or Merchant Cash Advance transactions, including without limitation the application therefor (collectively, “Transactions”) and each Assignee is authorized to use such information and documents, and share such information and documents with other Assignees, in connection with potential Transactions, (4) each Assignee will rely upon the accuracy and completeness of such information and documents, (5) NF, Assignees, and each of their representatives, successors, assigns and designees (collectively, “Recipients”) are authorized to request and receive any investigative reports, credit reports, statements from creditors or financial institutions, verification of information, or any other information that a Recipient deems necessary, (6) Applicant waives and releases any claims against Recipients and any information-providers arising from any act or omission relating to the requesting, receiving or release of information, and (7) each Owner/Officer represents that he or she is authorized to sign this form on behalf of Merchant.(8) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (9) this request is for business and not for consumer purposes.

 

For Equipment Services:

I hereby certify: (1) the information provided is true and correct, (2) you are hereby authorized to investigate all bank, credit, and trade references, and said references are hereby authorized to release any requested information to you or your nominee, (3) such authorization shall extend to obtaining personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account, (4) this information may be transmitted by us to you and by you to underwriter(s) for the purpose of granting me credit, either electronically or manually, and that by submitting this application, I take full responsibility for transmission thereof, (5) I am over 18 years of age, (6) I acknowledge my rights under the Fair Credit Reporting Act, (7) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (8) this request is for business and not for consumer purposes.

 

Text Messaging:

By providing my wireless phone number to National Funding, Inc., I agree and acknowledge that National Funding, Inc. may send text and multimedia messages to my wireless phone number for any purpose. I agree that these text or multimedia messages may be regarding the products and/or services that I have previously purchased and products and/or services that National Funding, Inc. may market to me. I acknowledge that this consent may be removed at my request but that until such consent is revoked, I may receive text or multimedia messages from National Funding, Inc to my wireless phone number.

  
The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status or age (provided the applicant has the capacity to enter into the binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. If for any reason your application for business credit is denied, you have the right to a written statement of the specific reasons for the denial. To obtain the statement, please write to National Funding Inc., 9820 Towne Centre Drive, San Diego, California 92121. Funding amount and credit approval is subject to a full credit profile review.