Any entrepreneur who runs a successful business will tell you that they had a period of time in which money was tight or not available even to pay the basics. These businesses had to find a way to persevere to continue to service their clients. These moments are to be expected during the first few years of business, especially as the clientele is still being built.
Successful businesses often utilize loans or lines of credit to aid their ability to run the business during these hard times. However, new business owners are often confused as to what loans and lines of credit are about and how they affect the business’s bottom line.
Loans for Business
Most loans are resources developed to help businesses for an immediate need, such as adding an additional service, building a new division, or creating a marketing push that extends into a new market, to name a few examples. These loans come as a lump sum payout. They must be repaid within a specified amount of time.
Many business owners have steered away from this process due to the idea that bad credit will cause a future merchant loan to go unapproved. This is not always the case. Many companies will help businesses no matter their credit.
Business Line of Credit
A line of credit loan is another form of financing available to businesses. With this type of loan, the business owner maintains control over how the funds are distributed throughout the life of the loan. It is equivalent to a credit card. It acts like cash as opposed to credit.
A business line of credit is slowly distributed to the business owner at the business owner’s discretion and is repaid as it is used. As it is repaid, the line of credit is reestablished, and that money is once again available to the business owner to be borrowed. This is perfect to provide working capital or equity to the business to continue to function during difficult times. For instance, if a client has not paid a bill for a time, the line of credit can be utilized to help with daily operating costs until the client makes his or her payment. At that point, the business owner will repay the full amount or remaining amount of the line of credit and have the money available for the next time the business is in need.
Restaurants and Loans
Restaurants and loans are often like oil and water. It appears that many restaurants have a much more difficult time obtaining loans than any other industry. This is because of the high rate of failure for many restaurants combined with the high overhead of working within the food industry. However, certain providers offer loans that are affordable and work with the needs of restaurant owners.
ARF Financial helps businesses obtain these types of business financing and more. Some of the products include mezzanine loans, merchant loans, bridge loans, working capital loans, flex pay loans, and lines of credit. It may seem a bit overwhelming. However, the best way to actually choose the best loan for your business is to speak with a licensed professional about your business, its needs, and the loan products that best fit those needs. However, here is a bit more information about each of these options to get you started.
Flex pay loans are the perfect small business loan for the business that is looking to expand but is afraid to take the step due to repayment fears. Flex pay loans are loans in which allow you to receive a lump sum amount of money while offering a low, weekly repayment plan that is appropriate for the small business owner. In addition, 25% of the loan amount can be deferred for future use, keeping the payments truly affordable.
Working Capital loans are another option for businesses that need a quick injection of money but do not want to have high payments or utilize cash advance options. With working capital loans, a business can receive a loan of under $725,000 without any collateral. Unlike cash advances, these loans offer fixed payments, no matter how much revenue you may have. Another option for this type of loan is the mezzanine loan, in which companies can take advantage of growth opportunities without waiting several months for the banks to approve the funding.
Bridge loans are the alternative to equity partners. These loans “bridge the gap” between the time you apply for conventional financing and the time it is actually approved and distributed. It is essentially a loan that can allow for the purchase of equipment or more cash flow into your business.
Finally, ARF Financial offers lines of credit. This is a wonderful option for businesses that require flexible financing and who want to be prepared for the “what ifs” of running a business. Having that money in the bank at all times helps when the worst happens. It is flexible in the way in which it can be accessed and the way in which it is repaid.
Most importantly, ARF Financial works to provide unique benefits to its loan holders. Unlike most institutions, they do not require collateral for most loans under $725,000, and they help those with bad credit as well as businesses with great credit. Finally, they work with your bank to provide the financing in a quick manner, making it easier for you to borrow money and repay it. To learn more, contact the experts at ARF Financial at 866.702.4430.