If you’re just beginning your hunt for business financing, you’re likely knee-deep in unfamiliar terms and lending jargon. And it’s enough to make even the most eager entrepreneur feel overwhelmed. Don’t continue your search without reviewing a few of the essential terms you need to know to make an informed decision about financing your business. We’ve broken down eight must-know terms below.
As with almost every aspect of our lives these days, the internet has made it easier, faster, and more convenient than ever for small business owners to gain access to financing, submit business loan applications, and get cash in hand to pursue their goals. Even so, when it comes to something as important as financing your small business, the easy, fast, convenient way won't necessarily give you the best results.
WASHINGTON, D.C. – Administrator Linda McMahon, head of the U.S. Small Business Administration, today announced the roll out of Lender Match, SBA’s online referral tool that connects small business borrowers with participating SBA lenders. The program is an upgrade to LINC (Leveraging Information and Networks to access Capital), which was introduced as a pilot in 2015.
5 places to find the capital you need to get your business back up and running
Business owners who sustained substantial loss from Hurricane Harvey should treat reopening their business like starting up for the first time. Whether the business owner gets funds through the Small Business Administration, a bank loan or their savings, reopening will take planning and capital. Lack of these is the reason behind the majority of small businesses that fail, said Joe Humphreys, University of Houston-Victoria Small Business Development Center executive director. "It's like starting all over again," he said. "They may not have the same employees.
No money, no growth. Without robust small businesses on the South and West sides, joblessness will continue to plague neighborhoods, experts say.
That's the message from a recent report by the U.S. Senate Committee on Small Business & Entrepreneurship, which found that access to capital remains the primary issue affecting growth of minority-owned businesses nationwide. Only 16 percent of small-business loans went to women in 2013, and less than 2 percent of black-owned businesses received loans that year, the report says.
Bank loans are usually the least expensive way to finance a small business. However, it is not easy to get a bank loan, as banks have strict standards for lending. As a general rule of thumb, banks will require a borrower to put up collateral for a loan. The only exception to this rule is for clients who have a long-term relationship with banks and whose business has proven to be profitable over a multi-year period.