Financing Blog

As you prepare to open the doors for your small business, there are a variety of important decisions to make. Starting your company can be an exciting prospect, but be sure you’ve taken all the necessary steps before beginning. One essential step that takes careful consideration is employee recruitment. Your first employees are going to be the backbone of your company, so use these tips to find the right employees today.

First, determine whether you need full-time employees or part-time, freelance employees. Many businesses are finding success in hiring freelance and contract workers. This employee arrangement can help you avoid providing costly benefits and strict contracts that could otherwise be too expensive for your small business. Depending on your business model and the position you’re looking to fill, you may want to consider offering a remote position. Remote working is on the rise, and it can dramatically increase your hiring pool.

Next, consider the type of credentials you’re looking for. Hiring a trained professional with years of relevant experience can seem like a wise employee recruitment strategy, but an experienced professional will require a far higher salary and more generous benefits than an individual with less experience in the field.

Hiring someone who is just getting started can have some advantages. While you’ll need to put in more time training your new hire, you may see higher rates of employee retention, a lower starting salary, and other benefits. Of course, an inexperienced worker may not be as productive, professional or successful as a more seasoned employee.

Once you’ve determined these basic steps, it’s time to start looking for prospective employees. Now is the time to utilize all your business and personal connections to find the perfect employee. You should rely heavily on industry connections, personal references, and information from previous employers. Don’t hire someone based on their resume alone, but take time to get to know how the potential employee works and how they will fit in with your company’s mission.

Before committing to hiring anyone, a key part of employee recruitment is to analyze the exact amount of employees you need. It may be tempting to build a small army as your small business expands rapidly, but hiring too many employees can drain your savings and cause you to lay off workers during slow seasons. Slow, steady and consistent growth is key to successful recruitment as your small business becomes a larger company.

Even knowing that 75 percent of all startups fail, many people still want to be their own boss and begin a new business. So, why would someone take a loan out for hundreds of thousands of dollars when the chance of failure is so great? Many do it for freedom because it can be rewarding, or for the challenge. There is no right or wrong answer when it comes to having entrepreneurship, but there are ways to begin a business without money or experience.

Ask Friends and Family To Help

The seed round, or initial investment, is often provided to entrepreneurs by their friends and family in exchange for a percentage for the company. Some ask for an advance on their inheritance, some may receive a private loan from a family member, and still, others may ask for donations as they begin their new ventures.

Look Into Small Business Grants

Programs abound to promote entrepreneurship in the business world. Local, federal, and state governments all have loan programs with available low-interest rates, large grants, or venture capital. The grants are free money if your business qualifies, so it is well worth looking into the programs your new business may be eligible for.

Enter the World of Crowdfunding 

New businesses, charities, and entrepreneurs all use the innovative form of raising money called crowdfunding. Interested people donate to one of several possible sites to help fund new companies, promote ideas, or manufactured items. In return for the donation, some participants are offered a reward. Since there is no guarantee for this type of venture, many people shy away from funding through this sort of site.

Ask About Micro-Loans

Most major financial institutions limit the number of small loans they provide and most only lend to businesses they have a long-standing relationship with. That is why the SBA has set up a list of micro-friendly loan companies in each state. Please note that micro-loans are not available during your company’s first year of business due to the high risk of loss, but after that, the loans can be a great way of obtaining low-interest money up to $50,000.

When turning an idea into a business and beginning entrepreneurship, there are ways you can find money to fund your venture. Although it can be difficult to locate business funds, you can use the four ideas above to help your start a business without money or experience.

Are you ready to invest in an excellent property with the potential to make a great income? Fix and flip properties can come with risks, but are giving investors the opportunity to exponentially increase their investment. If you’re ready to take on investment in commercial real estate renovation, find out how you can receive the best financing to quickly purchase, renovate and sell your new property.

Not all flippers have years of experience. If you’re starting out, you don’t need to have a background in construction or investing to successfully purchase and flip a property. However, without a proven track record many lenders may be hesitant to provide you with the funding you need.

First, consider a hard money loan. Unlike a traditional mortgage or commercial loan, a hard money loan is flexible. Because it’s based on the property’s ARV or after-renovation value, you can receive the financing you need to not only purchase property but also make the necessary renovations to earn a profit. These loans don’t require as high of credit scores, down payments or lengthy applications. However, you may not receive the best rates. You’ll want to sell your property quickly to avoid paying the high-interest rates for months or years.

Just like a traditional mortgage, most hard money loans for fix and flip properties will be backed by the property itself. This means that, while you hold the title for your investment property, defaulting on the loan will cause you to lose the property.

Hard money loans are an attractive option because they are typically approved faster than a mortgage. When the perfect real estate is on the market, you need to be fast enough to put in a competitive offer. If you don’t have the financing available to self-finance your investment, a hard money loan is a flexible and responsive way to quickly make the offer you need, the renovations you want and secure the selling price that can make you a profit.

Another, the riskier option is crowdfunding. Crowdfunding allows you to receive small loans from a wide community. All these smaller loans are collected to create a loan large enough to purchase the property and finance your renovations. However, this option can take far longer than a hard money loan. It is also very difficult to receive if you have little or no experience flipping houses. While crowdfunding seems like an exciting and modern way to raise money, the risk makes it less attractive for many fix and flip investors.

When you do not want to start a business from scratch, but you can not find an existing company that appeals to your business sense, there may be a franchise that could entice you. Since there are many well-known brands available for entrepreneurial investment into the world of franchises, the decision comes down to what you know and what you love to do. Once you choose which type of business opportunity is right for you, the next step is getting franchise financing. Here are a few places that may be the right fit.

Small Business Administration Loans

Small business owners and beginning entrepreneurs often turn to the SBA for loans because they are so much easier to qualify for than traditional loans. Many start-up company owners have little or no down payment and can provide no collateral. The SBA guarantees the bank or credit union-backed loans, but the terms of this type of lender provided money often has a low-interest rate and long repayment conditions. This loan can also be processed quite quickly, providing you the ability to get the money within weeks, rather than months.

Traditional Large Bank Loans

Traditional loans through credit unions or large banks have been the standard for many years. Though more difficult to come by than the SBA loan, if the bank is associated with the franchise parent company, loans can more easily be obtained upon approval. Good credit scores and stellar payment history are often essential for this type of franchise financing loan.

Retirement Account Borrowing

Thinking outside the box often brings many people to consider funding the start-up franchise costs with money from friends, family members, or taking on a business partner. Entrepreneurs may also choose to borrow from their workplace retirements accounts such as a 401(k) or IRA. There may be a tax payment on the money, but no interest or penalties.

Franchisor Owner Loan Assistance

If the franchise you wish to purchase is part of a large brand, the franchisor may offer financial assistance. Some companies offer small loans, while others may offer to cover the whole cost. Repayment schedules can seriously impact your income ratio, so make sure to look at the loan details before you sign on the bottom line. Also, check to see if there are incentive programs or discounts if you are a veteran, first-time business owner, or minority.

Opening a business can be an exciting venture if you find the right type of franchise financing. With a little legwork and a whole lot of reading, you can find a lending institution that fits your needs.

Your business needs flexible financing for emergency situations and sudden investment opportunities. Whether you’re just getting started or looking to expand into a new range of products or services, receiving competitive lines of credit can allow you to thrive in a competitive market without draining your working capital or interrupting your cash flow. Find out how to qualify for a line of credit today.

Requirements and Qualifications for Your Business

Your business needs to have a strong financial history to apply for the best credit available. Most lenders require at least two years of operation, but more is even better. Businesses who are less than two years old will have to rely on your personal credit and qualifications to receive a line of credit. Businesses with multiple years under their belt are typically more reliable and have a proven track record in earning an income and handling finances.

Just like a loan, lines of credit typically require collateral. This allows your lender to minimize their risk and provide you with competitive interest rates without worrying about losing their financial investment. Collateral can come in many shapes and sizes, but most businesses back their line of credit with real estate, inventory, accounts receivable or equipment.

Your lender will also look at your business profits. Businesses that are struggling to earn a profit or are unstable in their income will be less likely to receive credit. Credit should be used to shore up low seasons or keep in case of emergencies, not use for daily business needs.

Personal Requirements and Qualifications

Your personal financial history can also impact the lines of credit available to your small business. First, your credit score will be a major factor in influencing your approval. A high credit score shows that you are capable of handling your finances, even if your business is too young to also reflect that capability. One low point may be countered by several high ones. For example, a lower credit score might not cause your application to be rejected outright if you have plenty of personal assets and successful history in your industry.

Any past experience in your field, personal assets, and additional income sources will also help to alleviate any concerns with you that your lender may have. Once you can put together a strong application that details many ways in which you are able to repay your lines of credit, you can enjoy competitive rates, high loan limits and flexible financing for any business need.

Although seeking outside sources may seem like a complicated process, it can be relatively easy if you understand the process and all the rules associated with the goods. It is often beneficial to be connected to innovative and smart processes that may not be available from nearby sources. To take advantage of the foreign processes, products, or personnel, and to help grow your business, you may find that sourcing outside your company is a valuable tool. Here are some tips about how to start outsourcing to ease business processes.

Identify Problems

Take a close look at your company and decide what is lacking. Where could outsourcing benefit your business the most? Seeking to understand how the outside source could help you grow your business can be the first goal.

Set Objectives

If you know the objectives of your business sourcing, your company can stay close to your goals and not stray after the newest and greatest fads. Before you begin, decide if processes, products, or reducing costs is the main goal.

List Areas

List the areas of your business you plan to send outside and the reason that area in your business needs to be outsourced. Ideas can be clarified and focused once they are on paper.

Check Around

Look for outsourcing that matches your company’s needs, then negotiate with them for services or goods. Make sure not to settle on one source because it promises more than it can deliver and try to negotiate a deal with more than one source company before you decide which meets your requirements.

Establish Deadlines

Once you have met with or had discussions with different sources, make sure each understands your company has an established deadline for completion of the discussions and the beginning of the necessary work, provision of products, or essential services.

Seek Counsel

With a contract in hand, contact an attorney to review the agreement and any other associated documents. Make sure all papers include all discussed points and establish any discrepancies before any work commences.

Review Often

To maintain a positive relationship with the other businesses, make sure to review your company’s needs and the products or goods provided from outside sources. At the first sign of a problem or complication, establish an open line of communication about the problem. In this way, trust can develop on both sides, and a long-lasting work relationship can grow.

While sourcing outside the company may not be the solution to every business problem, it can help many businesses grow. When your company needs to ease business processes, use the steps listed above to begin outsourcing.

Start your franchise on the right foot with a complete business plan, detailed financial projections, and a manageable budget. Franchise financing can help you get your franchise off the ground, but you’ll need a solid budget in place to become approved for the financing you need. Here are a few easy ways to develop a compelling budget for a successful franchise location.

Startup Costs

What are the initial costs required to get your franchise off the ground? Much of your financing will go to startup costs, so your financial institution will want to know all the necessary costs associated with getting your doors open. Whether you are operating a restaurant, storefront or service provider, calculate the franchise fees, equipment costs, marketing materials, licenses and real estate costs necessary to begin providing services to your customers.

Don’t forget things that are easily forgotten, like utilities for your storefront, your own salary and any software necessary to operate your business or handle your finances. These hidden costs often cause new franchises to go over budget, so it’s important to include them all in your initial financial estimate.

Budgeting carefully for each of these startup costs gives you an idea of the type of franchise financing you need. Whether you’re shopping for multiple sources of financing or looking to receive all the capital you need from a single loan, it’s essential to have a clearly defined financial goal before asking for a loan or investment.

Borrowing for Operating Costs

Even the most successful small businesses take time to get off the ground. Depending on your location and franchise type, you should plan on taking out a loan to supplement your income during the first few months. Don’t let your location go out of business in the first month when it could have been a successful business just a few weeks later.

From utilities and payroll to inventory and income for expanding your business, these costs should all be taken into account. Use financial projections to determine the length of operating expenses that need to be supplemented before your business is financially sustainable on its own. At that point, you’ll have the working capital necessary to operate your franchise successfully.

A clear budget with accurate financial estimates allows you to start your franchise off on the right foot. Use your budget to establish credibility with your franchise financing provider. It’s a great way to leverage a higher loan amount, better rates or a quicker and smoother application process.

Working at home use to carry a stigma, but times have changed, and working from home has become an often-sought-after benefit of the digital age. If you are worried about your productivity while working from home, check out the following ten tips.

Improve Concentration

You can improve your concentration by limiting interruptions such as phones, emails, and texts. This will allow you to focus on the tasks at hand and get through them quicker.

Establish a Routine

Choose the structure of your day by establishing a routine you enjoy and then watch as your efficiency rises. Look to see what does and doesn’t work and change as needed.

Move Around

Give your mind peace by taking breaks to check emails, texts, and make phone calls. During your breaks, take a short walk, eat a meal, or grab something to drink.

Make a Schedule

If you allow interruptions to rule your day, they will kill your ability to be productive. Help others around you to understand that you are at work and need to focus.

Raise Performance

Most people concentrate for 90 minutes before needing a break to recharge, so plan your day to include the necessary breaks. Divide your day into established 90-minute chunks to boost productivity.

Invest in Yourself

A good chair and an efficient desk can be a worthwhile investment to make sure your body is relaxed while at work at home. If your body is comfortable, your mind can focus.

Define Your Morning

Establish a morning routine and stick to it whenever you can. If you lay out an essential task the night before, you can jump right into your work and begin the day knowing you accomplished something.

Outline Your Evening

End each day by making a list of things that need to be done the next day. Mark the most important item as the first thing you should do the next morning.

Clean the Area

Once a week, take an hour from your routine and purge all unnecessary items from your workspace. This can include anything you no longer need in the area. Purging can lift your spirits.

See the Positive

Look at the area in which you work in a positive light. You have the flexibility to work on the patio, at the table, or even at the park; and you can choose the hours you work. Be positive and let it reflect back into what you do.

Working at home can be a huge advantage in productivity for those that take the time to organize their day and establish personal rules. You can choose to work on your terms, and few people are that fortunate.

You’ve discovered the perfect menu. Whether you’re offering vegan pastries or a gourmet vegetarian restaurant, joining the restaurant industry with an innovative, health-conscious restaurant can be a popular way to start your own business. From first-time restaurant owners to seasoned veterans of the industry, discover how restaurant financing can give you the capital you need to launch a successful restaurant in your location.

Loan Types for Vegan and Vegetarian Restaurants

Depending on the amount of capital you need and your financial history, there are a few loan types to consider. Loans can be used to purchase your restaurant, hire staff, renovate your space and purchase the equipment and inventory you need to open the doors of your new vegan restaurant. Choose between traditional restaurant loans, SBA loans or equipment financing for flexible and affordable restaurant loans.

Traditional Restaurant Loans

A typical bank loan can be used to secure your place in the local restaurant industry. Choose a reliable creditor, either a private institution or a national bank, and look for the lowest rates, flexible terms and high loan amounts.

Most loans will require financial statements, a high credit score and a history of successful operations. For these reasons, securing a conventional loan is typically reserved for restaurants who have already been established for two or more years. Instead of startup costs, these financial offerings are best used to aggressively expand your vegan or vegetarian restaurant that is already successful.

Small Business Loans

SBA loans, on the other hand, are designed to help small business owners overcome some of the initial financial hurdles that are involved with any startup. Although not specialized for the restaurant industry, they are designed to support small business owners who may not have the credit score or operational history required of another source of financing.

Enjoy mid-ranged fees, reasonable funding limits and competitive rates. Of course, these loans may not be available for restaurants that are already successful or have been operating for a number of years.

Leases for Your Equipment

Finally, leasing your equipment is a great way to open the doors immediately. Don’t wait for the capital necessary to purchase major items, like grills, ovens and commercial refrigerators. When you open your doors, you want to have all the top-of-the-line equipment necessary to prepare gourmet vegan and vegetarian food for all your customers. Discover today which financial option is best for your startup and start an application for the financing you need to join the restaurant industry.

Qualifying for an SBA loan can be difficult. From first-time business owners to small businesses looking to expand aggressively, many businesses can utilize the funding available through the Small Business Administration. Whether you need a few thousand dollars to get your company off the ground or you need to purchase a new building for your expanding enterprise, here are some tips to improve your chances of qualifying for SBA loans.

Before you take the time to fill out an application, you need to research lenders in your area carefully. Although the Small Business Administration is responsible for these loan programs, every lender has their own application process and requirements. Choose a lender that is willing to work with you and has an easy application process that is designed to help you understand what’s involved. Some lenders are more willing to help you with your application, while others offer easier application requirements or higher loan limits.

Next, do everything you can to improve your credit score before applying. SBA loans are typically more lenient than traditional bank loans because they understand that new small business owners may not have the excellent credit rating and proven track record they need. However, these loans are still determined in part by your credit score, so a higher personal credit score gives you a better chance of receiving the loan amount and terms you want.

Your business needs an organized, in-depth business plan to prove that you understand the risks involved in starting a small business. Too many business owners jump into a risky situation without understanding the odds. Your SBA loan lender wants you to pay back the loan in full, so they are more willing to lend to individuals who have a firm plan in mind for growing their business and earning a profit. Create financial reports, projections, a company mission statement and a detailed plan of how you plan to grow your company and minimize risk.

Finally, don’t be afraid to reach out for help. Whether you ask your lender, an investor or an expert in your industry, there’s no shame in discussing options with someone you can trust. Lenders and investors are highly motivated to help you succeed, so if you trust their judgement in your field then you can trust them to help you make the right decisions when it comes to choosing the best SBA loans for your small business.