Should You Get a MicroLoan for Your Home Business Start Up?
As a Small Business owner, you must keep a close eye on your operating capital. If your Home Business Start Up doesn’t have enough money, you may have to decline a large order from a customer or other opportunities that require cash up front. One way you can protect the financial health of your start up is to get additional financing from a MicroLoan. This type of loan is popular with many Small Business owners because it is a faster and more flexible solution if you cannot get funded using traditional lenders. However, how can you tell if Microloans are right for your Home Business? Here are some questions you should ask yourself beforehand to see if it makes sense.
Do you have a plan for how you will use the money?
Before you apply for a MicroLoan, think about what you will use it for. Do you need to buy more equipment or hire employees to keep up with growing demand? Did you just receive a large order and you don’t have enough capital to produce the items? It is important to have a plan for how your Home Business Start Up will use the money. Once you have decided, ask the MicroLender if there are any restrictions on how you may use the money.
Do you need access to capital right now?
It can take months to get approved for a traditional bank loan or a Small Business Association (SBA) loan. Many Small Business owners do not have the extra time and need it as quickly as possible. If you need access to capital for your Home Business Start Up right now, a MicroLender may be a good option. Depending on the MicroLender you choose, you could receive your funds in a couple of days or a few weeks.
Typically, banks have very stringent lending requirements. They may also ask for your company’s assets, inventory, or accounts receivable as collateral before they decide to close the deal. MicroLenders usually have a more flexible application process that is more forgiving than a traditional lender. They may also consider additional factors, like your personal references, when they review your Home Business loan.
Does your company have an established credit history?
Banks prefer lending money to established businesses with a proven financial history. If you have a start up or you have been in business less than a year, your company probably does not have the credit history required to get a loan approved by a bank. Also, if you have personally had problems with your credit in the past, that may be an issue for a bank. MicroLoans can be a great solution to this problem, since paying off the loan can help improve your company’s credit. A positive payment history with a MicroLender may help you qualify for other loans in the future with a lower interest rate.
We understand how important it is to attain funding so your Home Business is a success. Sit down with an experienced accountant to discuss your company’s financial health. Once you decide to apply for additional capital, make a plan for how it is to be spent. Depending on your company’s circumstances, MicroLoans may be a better alternative than a bank loan or revolving line of credit. Talk to different MicroLenders and choose one that has the best application process, interest rate, and turn-around time that fits your company’s needs. One organization that OmniTech Enterprises, LLC supports, which provides small MicroLoans to Small Business entrepreneurs worldwide, is https://www.kiva.org .
Information, education & training about how to start and grow your own Home Business, including info about MicroLoans, is available at our Blog site: http://OnlineMarketingHomeBusiness.com . OmniTech Enterprises, LLC is proud to help Home Business Start Up founders achieve their dreams. We will assist you in becoming a successful Digital Entrepreneur to grow a profitable online business.