April is often associated with spring cleaning and reorganizing, which means you finally made the time go through that overflowing junk drawer or to organize last year’s financial statements for the tax filing deadline. But when it comes to your finances, you can use this time to do more than just file your tax return documents thanks to the resources provided as part of National Financial Literacy Month.
This article originally appeared on Forbes.com
Rohit Arora, Forbes.com Contributor
Small business loan approval rates at big banks continued the upswing with yet another new high last month, according to the Biz2Credit Small Business Lending Index™ (March 2018 figures). Big banks (assets of $10 billion+) are granting more than one-quarter of the small business loan applications they receive. The 25.5% approval percentage, up one-tenth of a percent from February, represents a post-recession high point for big banks.
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.
As you navigate business financing, it may be tempting to use your personal finances to help out when your business needs a boost, but that is not always the best solution in the long run. Separating your personal and business finances can help ensure you treat your business like the independent entity it is, while safeguarding your personal finances.
Online lenders and startups have been mining Yelp and Facebook for several years, checking out how many followers a business has and whether loan applicants are posting photos of extravagant vacations, to discern whether potential borrowers are a good risk. But now, brick-and-mortar banks are stepping into the world of social media monitoring, checking these sites and other nontraditional data sources, such as utility records and Amazon.com payment history, for financial clues in making loan decisions.
Securing a small business loan isn’t easy following the financial crash of 2008 and the subsequent tightening-up of lending criteria. However, assuming your credit is in good standing, there may be a number of lenders – both alternative and conventional – competing for your business. So what are the key questions you should be asking before committing to a particular loan and provider?
Running a small business doesn’t come cheap. Even if you’ve scrimped and saved to bootstrap the operation on your own, or were fortunate enough to get an investment from friends or family, there may come a time when you need a loan to continue operating your business.
Whether it’s working capital to fulfill a large order, a small loan to purchase new equipment, or a large loan to expand to a new location, chances are that at least once in the life of your business you’ll need to approach a bank for a loan.