Funding FAQ: REIL Answers Frequently Asked Funding Questions
- February 5, 2020
- By REIL Capital Admin
To grow your idea into a successful business, you need critical thinking, dedication, and skills. However, without adequate funding, it is almost impossible to grow any small business and owners have always failed to cover the required funds through their savings. This compels them to explore their funding options since it becomes essential for their success.
Below, our team has tried to answer some of the most common and frequently asked questions business owners have about loan options.
What types of small business funding sources are out there?
You may find a variety of small business loans that can fit your business needs but there are only two major sources that can offer small business loans- banks and non-banking finance companies.
Should I opt for a bank loan?
Small businesses mostly avoid taking bank loans since they take 30 to 60 days to process. Moreover, they require your business and you to have an excellent credit score so that it can meet banks applications. You should go for a bank loan if you want to establish a good credit history and want to qualify for a larger amount.
Should I opt for a non-banking finance company?
Businesses are full of ups and downs and they may witness credit challenges every now and then. Banks ask for an intricate business plan, along with your tax records, marketing plans, and credit history.
Non-banking finance companies allow you to explore options and get loans as per your business requirement without excessive paperwork or excellent credit history. You get term loans, SBA express loans, equipment financing, invoice financing, asset-based lending, and many more funding options with minimal requirements.
Does my business qualify for funding?
There are some minimum requirements that make you eligible for non-banking funding options. Your business or startup must have 3 to 6 months of bank statement and your business must be at least 12 months old. Furthermore, you should not have any outstanding tax liens or bankruptcies not included on the payment plans. There are certain industries ineligible for small business loans.
How much funding can my business get?
Several factors are taken into account to determine how much loan your business can get such as monthly sales volume, time in business, industry, and more. Mostly, a business qualifying for a Merchant Cash Advance will get an amount on par with monthly debit and credit card sales of that business. For instance, a business with $500,000 of monthly debit or credit transactions will qualify for $500,000 and $700,000 of MCA.
How long does it take to get business funding?
If you can promptly and properly complete the paperwork, you can get funding in less than 2 to 3 business days. Quick funding options also allow businesses to receive additional capital in less than 24 hours.
Can I get business funding with a poor credit history?
Yes. Business funding centralizes more on the strength of a business and less on credit history.
How can I use my business funding?
Sometimes businesses have specific business needs such as assets, equipment, invoices, etc. for which they apply for business loans. To know what you can do with your funds, check out our blog on how to utilize your business financing.