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Epic Contributor
Posts: 29,337
Registered: ‎10-23-2007
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Business Loans

What are currently the cheapest/fastest loans available:

 

We already have Bluevine with another business so not sure they let an owner take on another one even if different business.

We already have Kabbage also and that rate is terrible... Was hoping for something little more long term but don't think we are quite there for better stuff with traditional banks.

Contributor
Posts: 125
Registered: ‎07-27-2016
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nyh Re: Business Loans

What do you need the loan for?  Is your business profitable?  Are there any alternative ways you can raise the money other than taking a high-interest loan?  Those are the most important questions to ask yourself before anything else in this situation, IMHO.  Small business loans are typically very high APR (when I had Kabbage, it worked out to be about a 50% interest rate; CashCall gave me a 96% APR for a $13,000 loan ...a total ripoff in both cases)

 

Back in 2013-2014 I had a fast growing small business that was very capital intensive and always had cash flow issues.  I wasted way too much time trying to find what I now call the "unicorn loan" (it doesn't exist) rather than focusing on WHY the business had cash flow issues and fixing that. 

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New Contributor
Posts: 122
Registered: ‎02-28-2015
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Re: Business Loans


Creditaddict wrote:

What are currently the cheapest/fastest loans available:

 

We already have Bluevine with another business so not sure they let an owner take on another one even if different business.

We already have Kabbage also and that rate is terrible... Was hoping for something little more long term but don't think we are quite there for better stuff with traditional banks.


If you have a business that need cash, you could try pitching out to investors before pitching to banks, only assuming if your business is profitable. If you dont want to have investors, you probably want to go to the bank your business been doing business with and see what they can do. Maybe set up a line of credit. If its a store, you could try a merchant cash advance, but be warn, you will end up paying alot in interest. 

Valued Contributor
Posts: 1,591
Registered: ‎08-02-2016
0

Re: Business Loans

Darius - That's odd when I went into WF (I've banked with them for 8 years) they offered me a Business Line of Credit for 6.99-8.99% given the line was only 20k but still it's insane to pay 96% APR.

Personal FICO's are 725-745 maybe that makes a difference?
Contributor
Posts: 91
Registered: ‎03-11-2017
0

Re: Business Loans

I work in staffing company which is also cash intensive business. We started with Fundbox, non-notification invoice factoring finance. Then we tried with bluevine and now we got loan from on deck capital for 27%APR. since we did not complete two years in business, we could not approach banks. We are planning to go for CL with our business banker after May.

Alternate lenders will always pinch for more money. As Darius suggested, try to raise money from friends, family or investors and banks before approaching alternate lenders. Also, you should really focus on your cash flow issues.
Frequent Contributor
Posts: 404
Registered: ‎01-15-2017

Re: Business Loans

Try going to a factoring co.  I once had a start up that used a lot of cash but made a profit from day 1.  We had major clients.  We got a million dollar line.  Rate was not cheap around 15% but we got a rebate to 10% if clients paid timely.  After 6 months I went to the Private Banking Group of my bank and got a floating line of credit tide to A/R at a much better rate.   

Contributor
Posts: 91
Registered: ‎03-11-2017
0

Re: Business Loans

@backwoods, quick question.. did you go for notification or non-notification factoring?
2. Are banks not checking if you own business for two years before approving line of credit?
Frequent Contributor
Posts: 404
Registered: ‎01-15-2017

Re: Business Loans

Any invoices we factored used the remit address of the factoring co. That was part of the agreement. The buyers never were sent any kind of notice.  We got a weekly update from the factoring co on open balances and monthly summary with our rebate.  We watched invoices at 3 weeks and made a quick call.  At 5 weeks we had to buy back invoices.  Our magins were large enough this was not a problem.  

Frequent Contributor
Posts: 404
Registered: ‎01-15-2017

Re: Business Loans

For factoring age is not as important but still comes into play.  For the first 2 years you will get more no than yes.  BUT personal relationships with the bank do come into play.  Make friends with the lender. Always be upbeat.  I had a huge advantage, my grandparents(fathers side)  owned and operated for 50 years one of the first Ford Dealerships. My mother's family owned a chain of about 10 speciality upscale stores that was very well known and was started shortly after the civil war.  My mother's family owned a very small percentage of the bank and my great great grandfather was one of the founders.  Both bank's private banking knew me from being with my parents and grandparents going to call on them.  One of them when I told them what I wanted to do gave me a contact and called the factor for me.  He also said after 6 months to a year bring the business financial and we can talk.  Again relationships do matter. Good Luck.

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Contributor
Posts: 91
Registered: ‎03-11-2017
0

Re: Business Loans

Thank you for the detailed explanation. Yes. I do agree that banker relationships will make all the difference.

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