Wednesday, January 20, 2016

Searching for loans

          Free daily tips, information, advice and ideas
          to help you better manage your small business

     Every business needs funding to expand and grow. Some businesses generate excess cash internally and use it to gradually get bigger. Others go outside for a loan.

     Small banks have traditionally been there when you needed them. They were the go-to place for expansion funding. That's changed. New and onerous regulations have put many community banks out of business, and those that survive are reluctant and wary--because of the regulations imposed by the federal government. 

     Technology is galloping to the rescue. Players other than small banks have moved into the loan market. There are today dozens of lenders who are anxious to lend money--either to you personally or to your business.

     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 back in December, 2014. 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 a few minutes. Yes, fees are involved and an interest rate applies, but these can be less than you pay on credit cards. 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 to

     Example: There are is another online lender providing loans to small and medium-sized businesses only. For others, do a search "Business Loans" and check them out. All of them will check you out.

     Whatever you decide, make certain that the path forward fits into your long-range business plan. Using credit cards to fund your business, for example, is a bad idea. 

     Any lender will want confidence in you and your plan for the future. So, do your business plan--showing that you will be able to repay the loan.      

No comments:

Post a Comment