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Advantages of Small Business Loans for Start-up Companies

By Jesse Baars Subscribe to RSS | May 18th 2012 | Views:
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Capital is one of the primary considerations of most businesses. Without it, an otherwise brilliant business plan cannot be executed on time. This is the reason most companies resort to loans as sources of funds for short and long-term use.

In the United States, banks and government organizations are the typical sources of small business loans. With these institutions, however, you need to file lots of paperwork that can take a long time to process, and you need a good credit history. If you are a start-up business with an unproven financial track record, you may find it more difficult to obtain these types of loans. This is where cash advances can help you.

In a cash advance, you can get money sufficient to start your business or meet emergency expenses immediately. In exchange, you gradually pay off your loan with your revenues, according to your agreement with your creditor. For instance, suppose you immediately get $500,000. If your monthly revenues are $25,000, and you agree to pay 20% of your monthly revenues to pay off the $500,000, you pay $5,000 every month, plus interest in exchange for the loan.

Because the periodic payment is based on an agreed percentage, rather than an absolute amount, you can give a smaller payment in slower times. For instance, using the same example above, suppose you only earn $15,000 in a month. This means your periodic payment is reduced to a minimum of $3,000.

The application process for small business loans for women is fast and easy. If you are starting your business when customers are more receptive to products like yours, you cannot afford to waste time. There isn’t much paperwork involved with these loans, and you can focus your energy and resources to managing everyday operations, instead of waiting in line as you do with most financial institutions. Additionally, these loans are usually on a short-term basis.

As you can infer from their name, you can get bad credit business loans even if you have a poor credit score. All you need to do is prove that you can generate enough cash to pay off the loan gradually. This also gives you the chance to improve your credit score over the long run, thereby increasing your chances of getting future loans when you need them.

Small business loans make your desire to earn high profits and meet customer needs a reality. They can give you cash on hand when you need it the most. For more information on these loans, you may read thedailymba.com/2011/02/14/the-advantages-of-a-business-loan.

Jesse Baars - About Author:
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