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Hand With Pen And Calculator On Business Loan Application Form

Understanding the Various Types of Business Loans

February 6th, 2019 by

Do you need a loan to help you take your business to the next level? If you’ve been turned down by your bank, don’t fret. Small-business owners have plenty of options that exist outside of their bank’s walls. Keep reading to learn more about small-business loan options, including working capital business loans.

Invoice Financing

Many small businesses struggle with getting paid. If you have outstanding invoices, you need a loan product that helps you recover these funds. Invoice financing is ideal for business-to-business (B2B) customers. This small-business loan lets you get a cash advance from a lender to cover the invoice amount until your business customer pays you. The lender collects either a flat fee for the service or a weekly fee, usually 1 percent, until the invoice is paid in full.

Equipment Financing

The biggest hurdle many new companies face is paying for the equipment they need to operate their businesses. The equipment you need varies as do the lenders who make these kinds of loans. When you need an equipment loan, find a lender that specializes in your business model to help you get the best deal on one of these loans.

Personal Loans

Do you have good credit? If so, consider taking out a personal loan to cover your expenses temporarily. Many small businesses are start-ups that don’t have an established business reputation, which makes it difficult to get traditional hard money loans from banks and disqualifies you from getting a small-business working capital loan. While a personal loan means you’re borrowing against your good credit, it doesn’t put your business at risk, and you can get what you need to get started quicker. Personal loans work best when you need to make smaller purchases. They aren’t ideal for paying employees.

Banker recommend customer for signing loan contract

Nonprofit Loans

Do you need a large amount of capital, but don’t qualify for a working capital loan? Why not consider a nonprofit loan? A common misconception about these loans is that they’re only for nonprofit organizations. In fact, they’re great for for-profit businesses that need small loan amounts under $50,000. The organizations that fund the loans are nonprofit, which means loan fees are less. Nonprofit loans like to work with local businesses to improve and bring money into the community.

Working Capital Loans

A great option for small-business owners is the working capital loan. With this loan, business owners get the following benefits:

  • Easy application
  • Fast approval
  • Same-day funding
  • No prepayment penalties

Working capital loans for small businesses make it easy to access the money you need quickly for all reasons including marketing, equipment purchases, invoice clearing, paying staff, etc. These loans work best for small-business owners with established businesses. For example, most working capital lenders require the business to have at least $75,000 in annual sales and be in business for at least nine months. These requirements vary per lender.

Are you interested in a working capital loan, personal line of credit, equipment loans, or another type of business loan? Work with a lender who’s interested in developing a long-term relationship with competitive rates and never sells your information to brokers. When you need a business loan up to $500,000, contact GetMoney.com to learn more about the business financing products we offer.

Green upward trend graph shows excellent credit score on wooden surface with black background. Business and financial concept.

Installment Loan and Credit Score: Is There a Correlation?

February 6th, 2019 by

Are you looking for ways to improve your credit this year? You’ve researched the best online personal loans, found one with great rates, and paid it off, but your credit score hasn’t budged. What’s the deal? This is a common struggle among borrowers with installment loans. The problem is people assume all debt is the same, but it’s not, especially when installment loans are in play.

What is an Installment Loan?

It’s important to understand fully what an installment loan is and how it affects your credit score. First, an installment loan is a product that requires the debtor to pay a fixed amount each month for a specific term. For example, you take out a personal loan online for 24 months and pay $100 each month. This is an installment loan, and it can include loan products such as car loans, home loans, boat loans, etc.

These loans get reported to credit bureaus and are used to determine your credit score. However, they matter to your score less than credit card debt because they’re considered a low-risk, stable product. Since these loans often have collateral attached to them, they don’t score as high as riskier credit products such as low-interest personal loans that don’t require collateral. Most people won’t stop making their car or house payments because they don’t want to lose their vehicle or have their home foreclosed on. So, while making these payments on time matters, it doesn’t have a huge impact on your credit report when they’re paid off.

Credit score report with calculator, glasses and pencil on table.

Managing Installment Loans

Many people believe paying off installment loans quickly improves low credit scores. There are many benefits to paying off these loans faster, including paying less interest and working toward living debt-free. However, it’s not the most important aspect of managing installment loans. If you’re concerned about improving your credit score and have installment loans, make it a point to always pay your loan on time. Don’t skip a month here or there and think paying off the loan in full a year early will negate the late payments.

What improves your score, albeit slowly, is paying down your debt steadily, a little at a time. It affects your credit when the loan balance continues to fall below the original loan amount. The debt/loan ratio has a direct impact on your credit score. So, if you’re looking to improve your score over time, keep your installment loans and pay them on time each month. Adding more to your monthly payment is a great way to reduce the number of payments you make over the lifetime of the loan while still slowly improving your credit score. Slow balance reduction works in your favor more than taking out a loan and paying it off three months into a 48-month term.

Best Place to Apply for a Personal Loan

Would you like to find a low-interest lender to help you create a strong installment payment history? Look for online lenders who offer great rates and substantial credit lines. If you want to improve your credit score, consider taking out an installment loan to pay off non-installment lines of credit. You’ll improve your score by paying off non-installment loans and continue to improve as you make your new payments on time. When you need a loan product like this, contact GetMoney.com, the best place to get a personal loan online.