5 Ways To Market Your Small Business On A Budget

What is a small business loan?

Generally speaking, a business loan is borrowed by a business owner or a company in order to finance and manage its operations including, but not limited to, purchasing equipment or inventory, investing in expansion, hiring new employees, and more. A business loan has terms and conditions directing how and where the money can be used, what the interest rate is, and what would be the repayment schedule. Every financial institution has its own criteria and requirements for lending and offering the best business cash advance loans; each will assess your credit rating differently in order to estimate how risky it is to lend you money and will offer you several lending options.  A small business loan is fundamentally the same, where the money borrowed for small business needs to be used to purchase equipment or hire employees. For entrepreneurs who are looking to get their venture off the ground, the small business start-up loans are a great alternative. New business owners say that the biggest challenge in starting a business is to get financing. In this case, private lenders and government programs offer financing options to help out new businesses.  At the federal and provincial levels, Canada offers startups various financial aid programs within specific sectors and regions. For instance, the Business Development Bank of Canada (BDC) offers loans to entrepreneurs to set up a new business, build or renovate facilities, buy equipment, develop new products, expand into new markets, improve IT infrastructure, and even sell the business.

Getting approved for your business loan

In order to get approval for small business loans in Canada, the owner has to provide a business plan as well as have all their documents in order. Firstly, you should ask yourself the following questions which will help you with your loan application:

• Why does your business need the money?
• What is the right type of loan for you?
• What type of lender should you approach?
• Do you think you qualify? If unsure, how can you improve your situation?
• Do you have all the documents required by the bank?

Financial institutions are reluctant to provide business loans unless there is sufficient security or collateral to guarantee the loan. Numbers show that less than 25% of small startup business loan applications are approved by major lenders. That is why private lenders have become such a practical financing option in the last decade. Unlike venture capital or angel investors, they do not require you to put up a percentage of your business. Moreover, it is easier to obtain a business loan from private lenders as they are more flexible with the loan terms. The paperwork is not as difficult and loans approvals happen faster than in major financial institutions.  Below are a few types of small business loans and financing options:

1. Lines of credit
2. Peer to peer (P2P) loans
3. Merchant advances
4. Investor loans
5. Term loans
6. Commercial Bank Loans
7. Equipment Loans for Startup Businesses
8. Online Invoice Financing
9. Traditional Equity Financing
10. Personal Loans

Types of startup business loans

Startup needs differ from established and even small business needs. Moreover, the startup most likely generates zero or negative revenue in the beginning. Entrepreneurs who are looking to borrow money for their business are usually asked for personal guarantees and collateral. This means that the business owner may put up his house or any other assets as collateral for the loan. That said, start-up business loans may not be the best option – especially if there are not enough assets available. As mentioned above, small business start-up loans from private lenders are better alternatives. Whether obtained through crowd-funding, private lenders, or the government, small loans can help a business owner pave the way for his business. Currently, equipment loans for startups are very popular. These are relatively small loan amounts, so the equipment that is purchased can be put up as security. Merchant cash advances and peer to peer funding can help small businesses with their cash flow and managing operations. Business lines of credit (LOC), sometimes called corporate credit loans, are like credit cards but for businesses. It is a revolving credit system, where the business owner can withdraw the amount of money they need, up to the credit limit allowed by the lender. The borrower only pays interest on the amount that is borrowed. A business LOC can help a small business owner meet its cash flow requirements and manage their debt effectively.

A merchant cash advance for start-up businesses

Known as a “business cash advance”, merchant cash advances work on different terms compared to traditional loans. Unlike bank loans, a merchant cash advance does not evaluate credit score. Small business owners can typically receive up to $300,000 startup business Cash advance, without having to offer security for the loan!Under a merchant cash advance, the business receives a lump sum of advanced cash with the condition that the lender will receive a percentage of your future sales. Therefore, the merchant cash advance is a simple and fast way of getting capital right away. A merchant cash advance for startup businesses is a great financing option, allowing flexibility in repayment. For instance, if your sales in one month are lower, then the repayment amount will be lower; similarly, if your business performs very well the next month, your loan repayment will be higher. The private lender also takes care of repayments, ensuring there are no delays in payments from your end. Most of them have agreements with major payment processors, so private lenders can set up repayments based on your daily sales received by credit cards, which eliminates any headache of repayments on your end.   For business borrowers who need the money as soon as possible, merchant cash advances are one of the fastest ways of getting cash flow. Once the business loan is approved the cash advance is directly deposited into your account within one or two days. If you think it might be a good solution for you, do not hesitate to get in touch with us.

You have worked hard to start up your business. After perfecting your presentation, you have been able to raise some capital. Congratulations! Now what do you do? Make sure you don’t waste this opportunity to launch your business right. Here are five ways to prepare your business for capital raised.

1) Know your “runway”

Your business’s “runaway” is the amount of time your business has before it runs out of cash. First, you should look at your business’s monthly expenses and your capital raised and then, determine how much time you need in order to gain a steady stream of income. Ideally, you will want your business to have a six-month “runaway.” With six months’ worth of operating capital, you can deal with various disruptions that will come with operating a new business.

2) Use a budget management tool

One of the best ways to manage your business is to use a budget management tool, and with the right budget tool, you will be able to manage your expenses and identify opportunities to save money and run leaner. There are a number of top budget management tools that are designed around start-ups. Some of the top budget management tools include the following: Quicken - Quicken is great for smaller starter-ups with its easy-to-use software and interface. Centage - If you have more complex operations, then Centage is an ideal budget management software system. Lola - Lola is a great budget management tool if you are dealing with a number of expense report.

3) Secure the best prices from vendors

You want to make sure that your capital goes as far as it can possibly go. Therefore, you will want to control your costs. One of the best ways to control cost is to be able to get the best prices from your vendors. Be sure to get multiple quotes from as many vendors as possible. Also, if you are planning to use a vendor for the long term, try to negotiate better prices to help you stretch your capital.

4) Have a business plan

It’s a good idea to have a business plan. In fact, a business plan is like a road map that shows everyone in your company, as well as your investors, what is your plan to grow income and become profitable. If you have no experience writing up a business plan, don’t worry. There are a number of business plan templates that you can use to help you get started. Here are a couple of places where you can find business plan templates:

• LivePlan
• BusinessPlanTemplate
• Formprintr

5) Have an emergency or contingency plan

You want to make sure that your business has a plan for the unexpected. In fact, situations such as natural disasters or disruptions in manufacturing or inventory can spell disaster for your business. The best way to plan for an emergency is to set aside a portion of your capital raised and set it aside for emergency situations. That emergency money can save you in situations where you need money fast and you may not be able to raise further capital.

Getting your capital for your business going

Now that you have the capital that you need for your business, it is time to get going. Be sure to have a plan, set a budget, and watch your spending. Also, spend your business capital the right way and you will be well on your way to start-up success. If you require a merchant cash advance for your business, 2M7 Financial Solutions are here to help you out. Request a quote, we will be happy to assist you.

The great majority of small businesses go under because of cash flow issues. You know the importance of cash flow for that reason. That doesn’t mean you don’t face seasonal cash crunches.Seasonal cash flow struggles are quite common, even among established businesses. You can take the strain off by employing these five effective methods of solving cash flow challenges.

Know Your Problem Seasons

The first step in combating cash flow challenges is know your problem seasons. For seasonal businesses, this may be obvious. If you run a golf course, you might find cash flow tightens up during the winter. If, by contrast, you have a ski club, then winter could be boom season for you.Knowing when you’re most likely to run into trouble can help you plan for those dry spells more effectively.

Shift the Timing of Financial Commitments

Once you know when your cash crunches are most likely to happen, you can work on scheduling around them. Try to shift any major financial commitments to other times of the year.This might include adjusting when you order stock or how you organize your tax year. A golf course may not want to make a major tax payment at the end of April, because funds are already tight.You may not be able to move every financial commitment, and that’s fine. By shifting some earlier or later in the year, though, you can make all your obligations easier to manage.

Offer Incentives for Customers to Pay Early

Another tip for meeting seasonal cash flow challenges is to entice customers to pay early. If you invoice your customers, you could offer them a discount if they pay before the indicated due date.You may encourage prepayment or even down payments. For example, if you run a mattress shop, then you could ask people to put a down payment on their purchase.You can make this a seasonal offer and encourage customers to “buy ahead.” With more money flowing in, you’ll have an easier time managing your cash flow.

Get a Merchant Cash Advance

Sometimes, the answer to cash flow challenges is credit. That’s particularly true of seasonal cash crunches since they’re usually temporary in nature.A merchant cash advance is one of the better choices you have to manage seasonal cash flow. With one, you get the cash you need against expected future sales. As sales take place, you’ll pay back the advance.

Diversify Your Business

One of the best ways to solve seasonal cash flow issues is to diversify the business. If you run a golf course, you might also operate a banquet hall. Acting as a wedding venue can keep cash flowing, even during the winter season.If you face seasonal challenges, think about the ways in which you can diversify and offer more to your clients all year long.

Get a Helping Hand with an MCA

If you’re feeling pinched, it might be time to get a merchant cash advance. Get in touch with the experts and discover what the right financing option can do for your business.