Understanding Small Business Loans

Aug 2020

Jan 2025

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:

Lines of credit
Peer to peer (P2P) loans
Merchant advances
Investor loans
Term loans
Commercial Bank Loans
Equipment Loans for Startup Businesses
Online Invoice Financing
Traditional Equity Financing
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.

December 11, 2018

January 24, 2025

6 Characteristics of Innovative and Successful Leaders

There are all types of leaders. Some leaders are more hands-on – they teach and pass on lessons in a direct manner. Others like to lead by example, showing others with their actions rather than words. Although top merchant leaders Canada may take different approaches to leadership, there are underlying characteristics that help them to bring the most out of their staff and have continued success. The most successful leaders share the following initiatives below:

Inspire Others

A successful leaders are able to inspire those they work with, getting them to believe in their vision and have confidence in the plan and strategy for the future.

Honest and Transparent

People need to have trust in their leaders. Transparency, honesty and the ability to follow through are excellent qualities for the leader of a department or team.

Don’t Back Down from a Challenge

When you are in charge of a group of people or overseeing a project, a leader should be able to face challenges and solve problems efficiently.

Motivate Their Team

Respected leaders create a vision and are able to motivate others into wanting to achieve the same goals. Teams that are aligned and working together with a true purpose tend to have long-lasting success.

Drive Results

No matter how they choose to get their message across, a leader has to drive results. Great leaders have a high level of perseverance and aren’t satisfied until they have got the job done.

Effectively Communicate

Whether it’s one-on-one meetings, emails, phone calls, or video chats, leaders make the time to communicate with their team. Having a two-way line of communication is vital to keeping everyone on the same page and motivated.Even the world’s best leaders need help making decisions and need to speak to experts for advice on their business. If you have questions about getting funding or about how merchant cash advances can help your small to medium-sized business, we can help.

May 25, 2022

January 24, 2025

2M7 Announces 2022 “Forward Thinkers Scholarship” for Business and Finance Students in Canada

2M7 Financial Solutions is proud to announce its annual Forward Thinkers Scholarship to support Canadian post-secondary students in Business, Finance, or equivalent programs who are forward-thinking individuals dedicated to making a difference in their fields. The selected recipient will have demonstrated excellence in their studies and will receive $2,500.00 CAD towards their continued success.“

Students are the future of our industry and we welcome the new perspectives and fresh ideas they bring to the table,” said Avi Bernstein, CEO of 2M7 Financial Solutions. “We’re proud to support passionate and talented individuals in the pursuit of their education, and we welcome all Business and Finance majors to apply for an opportunity to receive the Forward Thinkers Scholarship in 2022.”

As one of Canada’s leading merchant cash advance providers, 2M7 Financial Solutions helps Canadian small and medium businesses secure the funding they need to accelerate their growth. As a client-centric company, 2M7 values the entrepreneurs who are the backbone of the Canadian SME economy and believes in empowering business owners and enabling them to achieve their full potential. Similarly, 2M7 believes it’s important to give students the opportunity to excel in their fields and bring cutting-edge ideas that will help drive the industry forward.

The selected recipient will encompass 2M7’s values of innovation and demonstrate a genuine desire to make innovative strides within their respective field.

To learn more about the scholarship or to start the application, please visit the Forward Thinkers Scholarship page here.

Applications will be accepted beginning June 1^st, 2022, and the deadline to apply is 11:59 PM on August 31, 2022. Winners will be announced in the Fall of 2022.

About the “forward thinkers scholarship” by 2M7

The ”Forward Thinkers Scholarship” by 2M7 is an annual scholarship program, established in 2022 by 2M7 Financial Solutions. It recognizes outstanding students who are pursuing or entering full-time studies in Business, Finance, or an equivalent program. For those interested in applying for the 2022 scholarship, please make sure to follow 2M7 on Facebook for further announcements.

February 22, 2022

January 24, 2025

2M7 Featured as a Leading Merchant Cash Advance Provider in the 2022 Canada FinTech Lending Study

2M7 Financial Solutions is honoured to be featured as a leading merchant cash advance provider in the 2022 Canada FinTech Lending Study, organized by Smarter Loans, which offers insights into the state of the industry and emerging trends. According to the study, the primary concerns for borrowers were interest rates and loan terms, with 40% ranking these as their top priorities. This indicates that financing needs are rapidly evolving – which is particularly true for Canadian businesses.

However, a shift in the financial landscape has created unique challenges for small and medium businesses in getting approved for loans, and the digital credit score algorithms used by traditional lending sources such as banks have made it increasingly more difficult to secure small business financing. Therefore, 2M7 has been stepping up to support Canadian businesses with a lending alternative – providing faster and easier access to the working capital they need, and offering flexible repayment terms to help maintain a positive cashflow during these challenging times.“

We are directly supporting the economic recovery and are working tirelessly to help Canadian companies prosper during these times,” said Avi Bernstein, CEO of 2M7 Financial Solutions. “Right now, more than ever, small and medium businesses need more accessible funding options to grow their businesses, and 2M7 is eager to be a part of the journey alongside them. We love to see our clients succeed and are committed to supporting their growth, just as any good partner should.”

With a 97% approval rate, 2M7 Financial Solutions is delivering on its mission to fund every Canadian business that needs financing. Using a proprietary algorithm to evaluate risk and determine credit worthiness, 2M7 is able to fund businesses that might not otherwise qualify for a traditional loan. Furthermore, the innovative assessment process gets businesses approved faster, with funds deposited directly into their bank accounts within 24-48 hours – delivering a solution to the simplified application process and rapid access to funds that were rated among the priorities for borrowers in the 2022 FinTech study.

About 2M7 Financial Solutions

‍2M7 strives to provide a unique financing solution that is in line with the demands of today’s emerging industry trends in order to create a seamless funding and repayment experience. As the industry continues to evolve, 2M7 remains at the forefront of the innovative technologies and processes that are transforming the Canadian financial industry, providing solutions that better meet the needs of Canadian businesses.