When you are a contractor or small business owner, it is in your best interest to compare business loans before deciding on a single one. There are numerous forms of financing available, and certain ones will work better for your business. All loans are different, so make sure to consider what we can offer compared with more traditional lenders to see which route you need to take.
How to Get Started
If you were to pursue a traditional loan, then you need to start building up your company’s reputation before you even need the money. First, you need to be certain your company’s credit rating is as high as can be. Many businesses struggle with this first part because they have not set up a working capital loan. You should obtain a company credit card for your business before opening and make timely payments.
This credit card will typically need to be acquired from the lender you hope to work with in the future. Building a working relationship with a lender is vital because a firm foundation of trust is required to obtain financing. If a lender does not have any previous knowledge of your company, then you are going to face an uphill battle trying to secure funding.
How We are Different
It requires a lot of time and concerted effort to get working capital loans for small business from other lenders. With Express Capital, you do not have to worry about building any kind of previous working relationship. The application process is fast, and you will know whether you were approved or not in minutes. With other lenders, you may have to wait weeks only to hear you were denied. We do not leave you in the dark like that.
The Application Process
You need to make sure you dot your i’s and cross your t’s when you are filling out the paperwork for a traditional loan. In addition to the short half-page application itself, there are numerous other documents you need to provide, including:
- Personal resume
- Tax returns
- Copy of lease agreement
- Business certificates
- Bank statements from up to a year ago
- Franchise agreements
- Ownership structure
There may be many other documents you need to provide based on the type of loan you are trying to acquire. If anything is left out or if something is incomplete, then your business can get inconvenienced even further. It can take weeks to hear that you need to submit something else. Therefore, it takes even longer for your loan to get approved or denied.
Before applying, ensure you are going to the right lender by being knowledgeable regarding the following.
- Are there hidden fees?
- Always ask about prepayment penalties. Being a contractor, it helps if you can pay your loan off early. Ask if there are any penalties or discounts for early pay off.
- Know your business credit score before wasting your time on different lenders. Not all lenders will take bad credit. This will help you narrow your search. If you find yourself with bad credit, might want to search other lenders who can help you.
How Express Capital Funding Compares
Our goal is never to confuse you as you are applying. You can check out the application form, which is only one half page long. The only documents you will need to send are bank statements from the previous three months.
Small businesses require loans for a variety of reasons. No matter what it is going to be used for, you need to be certain you pay it back in a timely fashion. You can set up a payment plan with other vendors, but a problem a lot of business owners contend with is paying it back quickly.
The longer it takes the pay back a loan, the more interest rate will need to be paid. Unfortunately, many banks and other traditional lenders require business owners to pay back the loan between one and five years. This may sound nice, but it can be difficult if you want to avoid long-term monthly payments.
A lot of online lenders have a similar process, but even with them, business owners have to pay it back over a period ranging between six and 18 months. In fact, many traditional lenders take this practice a step further and enforce a prepayment penalty. That means if you try to pay back your loan too soon, then you have a fee to pay off in addition to the loan and interest rate.
We understand that sometimes a business needs a quick infusion of cash. This quick boost should not inconvenience you for years to come, which is why you can choose a 1 to 8 month term. We are dedicated to working however you need us.
That means if you need more money to make payroll and can make us back in a few weeks, we are willing to work with you. However, if you have a long-term project on the horizon and will need a lot of financing for the near future, then we will work with you there, too. This is like your working capital line of credit you can use any way you wish. Express Capital's program is a true loan to be used for your working capital solutions.
Generally, there are two types of loans most lenders offer. These are secured and unsecured. For a secured loan, the business needs to put up something of value. Therefore, if the person defaults on the payment plan, then the lender acquires the property put up as collateral. This typically needs to be a vehicle, equipment or building.
Unsecured loans do not require any collateral. As a result, the lender faces a significant amount more risk. As a result, many lenders tend to avoid unsecured loans when possible.
Unsecured Loan of Choice
Since secured loans are much safer for lenders, they are more common. For businesses lacking sufficient collateral to put up, it can be tough to find financing. Luckily, Express Capital only deals with unsecured funding, which means you will not have to put up items as collateral when you secure financing with us.
How to Use Your Loan
Some traditional lenders will want to know, in detail, what you will be using your business loan for. Some lenders are more lenient than others. Other lenders will have strict restrictions on what it can be used for. In many cases, your loan needs to be for a sound business purpose as defined by the Small Business Administration. This can get fairly objective, making it more difficult to qualify for the funds you need.
How to Use a Working Capital Loan
You can use your loan to help grow and sustain your business. A few of the items our previous clients have used their loans for in the past include:
- Covering payroll when there is a cash flow gap
- Purchasing materials and supplies when funds run short
- Using funds as a bridge loan
- Boosting revenue through additional advertising
This list is only a small sampling of what you can use your financing. With other lenders, you need to read the agreement carefully to ensure you are not spending the funding on something you are not supposed to.
Building Relationships with Business Owners
Express Capital is dedicated to building real relationships with contractors and small business owners, and we want to help you. You can start the application process today. As long as your company has been around for at least a year, makes a minimum of $7,500 in revenue monthly and has good credit, we should be able to provide you with the financing you are looking for.
You can also call us at 800-301-9149 if you would like an immediate response to whether your business would qualify.