Friday, December 12, 2014

Going for loans

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     with examples from small businesses.

     All this week I've talked about business planning. People in small businesses are always planning, but it's usually short-term. The nature of your operation means you are continually thinking about tomorrow, next week and next month--not next year. 

     Long-term planning is frequently put off. It's not an immediate concern. But it should be done from time to time. Get yourself in a quiet place and think about next year and beyond.

     Every business needs funding to expand and grow. Unless you generate excess cash internally, you go outside to find capital. 

     Small banks have traditionally filled this role. They were the go-to place for expansion funding. But that is changing.

     Galloping technology is providing another answer. Other players have moved into the loan market. There are dozens of lenders out there who will loan you money, either personally or for the business. Do a Google search "Business Loans" and a long list of these firms will fly back at you.

     Example: Lending Club does personal loans up to $35,000 and business loans up to $300,000. This is not some questionable upstart--it has a history dating back more than 5 years. Lending Club is a peer-to-peer lender that made its debut on the New York Stock Exchange this week. It is an online marketplace that puts people like you in front of prospective investors. You agree to a fixed rate for 1 to 5 years of monthly repayments. The funding agreed to shows up in your bank account in a few days. You apply online and get approval in as little as 5 minutes. Yes, fees are involved and an interest rate applies, but these can be less than you pay on credit cards and banks. This is not a recommendation; rather, it is a possibility for you to thoroughly check out before taking any plunge. Go to for more.

     Example: Another possibility is Prosper Marketplace. This company offers fixed rate unsecured loans from $2,000 to $35,000 with a 3 to 5 year payback. Rates and choices can vary depending on your situation. There is an online application and turnaround is faster than you might expect from your local bank. Again, this is not a recommendation; rather, it is a possibility for you to thoroughly check out before agreeing to anything. For more information, go go

     Example: OnDeck is another online lender, providing loans to small and medium-sized businesses only. No start-ups, just operations that have been in business at least one year and have $100,000 in revenue. Fast decisions here and fast funding. This company launched operations in 2007 and makes loans in all 50 states. Again, I am not recommending this company; rather, it is a possibility for you to consider and check out yourself. For more information, go to 

     There are many others. If you have funded your business using credit cards, you might be able to consolidate at a lower interest rate than you are now paying. Or, if you need funding to grow and expand your business, check out the online lenders. Whatever you do, make certain that any arrangement you agree to fits into your long-range business plan. 

     Developing your business plan gives lenders confidence that you know what you are doing, that you know your market, and that you'll be able to pay them back. Local banks have been the traditional source for loans to local businesses. Today, more possibilities exist. You deserve to check out whether or not these work in your situation.  


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