Archive for December, 2018

5 Questions That DetermineWhether You Geta Business Loan

Unlike personal loans, business loans are somewhat difficult to get hands on. Because they entail larger amounts of money compared to personal financing products, banks have to work extra hard to make sure that lending you money is an appropriate risk.

Whether you’re looking for a collateralized loan (secured by assets) or hope to get a line of financing with no risk, the paperwork you submit will determine your fate. Your personal and business credit histories also matter but beyond that, how well can you respond to these simple questions lenders often ask business owners seeking loans?

1. How long have you been in business?

The SBA (Small Business Administration) offers loans that require as little as 2-3 years in business, but larger, unsecured loans require up to five years of business success to obtain.

Be ready with your business incorporation, DBA, plus other documents showing when you started and that you’ve been in business till today.

For startups, the best catch is to apply for startup loanslike business startup loan no credit check, or microloans meant explicitly for new businesses.

2. How much do you make?

For established companies, over 5 years old, profit is perhaps the best indicator of business health. Declining profits are a sign you’ve been suffering from major cash flow crises, or a downhill trend in your business and may reduce your chances of qualifying.

 Also, note that “profit” is different from “revenue.” While Both are essential, revenue doesn’t cover all business needs and may not be sufficient proof you can pay back a loan. You can review tax documents to differentiate between these two concepts.

3. What do want to do with the loan?

Unlike many personal loans and lines of credit, banks want to know what purpose their funds will serve. Be specific about the action whether it is buying a new van to cover transport needs or weathering cash flow storms. Make sure you’ve drafted a plan of action to show you have a serious plan for the funds.

By giving details, you are proving to the bank you understand the happenings in your company and showing them your potential to pay back the loan.

4. What are your assets vs your debts?

Banks prefer lending to healthy businesses with assets that they can sell – if the borrower defaults. Even if they don’t demand collateral, they want to know the value of your business— and to ensure they aren’t taking the wrong risk. If you have debts worth much more the value of your company, then your loan request may be a hard sell. Be ready with a list of your debts and assets— not forgetting outstanding invoices that could be viewed as “assets” by lenders who look at cash flow.

5. Why Us?

Know your lender. Even before you start the application process, ask yourself why you have you picked that particular lending company? Are their terms favorable? Do they specialize with businesses in your niche? Are they known for a specific loan product? Providing the right answer to this question will portray you as a savvy borrower who knows what they want.

Final Words

Providing the right answers to these questions will complement you good paperwork and increase your chances of getting whatever loan you want.

Author Bio: As the FAM account executive, Michael Hollis has funded millions by using business startup loan no credit check solutions. His experience and extensive knowledge of the industry has made him finance expert at First American Merchant.

U.S. Midterm Elections Impact on Canadian Businesses

Canadian citizens who thought the political and economic mayhem in the US had hit a climax may be in for a shock after the midterm elections.

No one can predict the outcome until the last vote is counted, but there’s mounting evidence that President Trump’s Republican Party may lose control of the House to Democrats.

While anti-Trump Canadians may be pleased by this outlook, a bunch of Canadian policy experts warns that a Democratic-ruled House of Representatives may not necessarily improve conditions for Canadian merchant account holders and their economy as a whole.

And even if somehow Republicans retain control of both the Senate and the House, the increasing conflict of ideas stirred up by the harsh campaigns could lead to lasting differences that will continue to trouble U.S-Canada economic relations.

Conflict of ideologies

A clash of ideas may arise if Democrats take control of the arm that passes laws — the House of Reps — because they will be directly opposing the Republican executive arm which rules the country and ensures law enforcement.

According to Michael Hart, a former trade negotiator for Canada, there would be little, or no chance of compromise between the two divisions in the event that outcome materializes, and the Democratic Party runs the House of Reps, and Trump’s Republican Party controls the Senate.

There are no centrist legislators

Hart says Canadians should prepare for another budget stalemate, and with the huge deficit, and the idea of cutting down spending on social services to balance the accounts, there won’t be enough room to wheedle centrist Democrats aboard with new bank-breaking initiatives, like the debatable middle-class tax cuts.

“There may be a few centrist legislators, but none is willing to admit it,” says Hart, who feels Democrats are out for a battle.

“If Congress goes Democratic and they choose Nancy Pelosi once more, we have someone who,” Hart sighs, “lacks wisdom.”

Canadian Oil and Gas projects at risk

Environmental matters may also affect Canadian business, according to Bessma Momani, a Financial and Foreign Policy Specialist.

A Democratic House and the environmentally conscious body of voters may lead a fight against ongoing Canadian gas and oil projects, like the oilsands and pipelines, e.g. Keystone necessary to supply Canadian oil to markets.

Momani warns that there could be a risk here too. While many Canadians advocate for environmentalism and would support climate change strategies, most of them wouldn’t want to see an essential part of the economy tampered with without a proper plan.

Conclusion

It seems like the only positive outcome Canada would enjoy from a Democratic majority is that might it help smooth out the growing US-China trade conflict which is one of the main threats to Canada’s economy according to Stephen Poloz, the governor for Bank of Canada governor.