By: Emily Klaus | Marketing Associate
Between Google, social media and word-of-mouth, there is a lot of information out there about small business loans. Finding the most accurate, up-to-date information and weeding through financial jargon can be tough, and it can be even more difficult to distinguish myth from fact. We understand that many small business owners wear many different hats in their day-to-day lives: cashier, accountant, CEO, COO, customer service and janitor, just to name a few. These owners don’t always have time to do the research to find the best funding option for their small business, so that’s why we’ve compiled a few tips all in one place. Here are some important facts regarding funding for small businesses.
The SBA does not issue loans
Contrary to popular belief, the Small Business Administration does not actually issue loans or give money to small businesses. Simply put, the SBA is a government program that offers loans to small businesses that are least partially guaranteed by the government. However, the actual money for the loan will come from a bank, credit union or similar institution that participates in the SBA program.
The 7(a) Loan Program is the primary loan program for small businesses. This program has guaranteed financing for many small businesses and you can use the loan for a multitude of purposes. For more information on this type of small business loan, click HERE.
You don’t need perfect credit to get funding
Technically, a perfect credit score would be 850. That’s the absolute max score you can achieve on the main metric banks and other lenders use to evaluate loan applications. However, most traditional lenders know that not every application will have a perfect or even near-perfect credit score. SBA loan applicants usually have an average credit score of 680 but many traditional and non-traditional lenders will work with small business owners with credit scores as low as 500.
Many institutions that offer alternatives to small business loans, like Jet Capital, will look at your overall, unique business situation and revenues, rather than just your credit score.
SBA loans can be a perfect solution to a small business’s financial situation. However, sometimes the process can be complicated and it could be days or weeks before you see a dime in your account. That time frame might not work for many small businesses. A contractor might need an advance to start a new project because he’s still waiting to be paid for his last one. Or a pizzeria’s oven may have gone out and the owner needs a new one quickly to keep his doors open. Or perhaps the space next door to a salon is up for lease and the salon owner has been wanting to expand.
That’s why a merchant cash advance from Jet Capital could be the solution to many small business cash flow issues. You sell a small portion of your future sales to Jet at a discount and we give you the funds! Daily remittances based on a percent of your daily revenue are automatically debited from your account each banking day, so you don’t have to worry about writing and check or making sure any payments were made! Whatever the reason for your advance, Jet Capital can get funding in your small business bank account as soon as the next business day!
There is no finite set of rules
Unfortunately, requirements for credit scores, time in business, revenues, and industries vary greatly across the board. Every bank, traditional lender and alternative institutions will have their own sets of rules and requirements for the different products they offer, so be sure to read all of the information you are given and all of the information available on finding the best financial product for your small business.
Jet Capital makes applying for a merchant cash advance quick and easy. With only three pages, you can fill out and submit your application for small business funding in about 10 minutes. Apply today or give us a call at 866-845-9674 to get the funding you need to keep your small business booming!
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