Business Loan Basics for First Time Borrowers
Businesses today have many options for financing. Some are trying crowdfunding. There’s alternative financing. And then there are loans. Business loans aren’t always a negative thing. In fact, business loans have many advantages over crowdfunding and alternative lending. Don’t discount the value of taking out a loan to grow your business.
When you go to your lender for a loan, you know what to expect. Crowdfunding a working capital campaign can take hours of your time, marketing efforts and a huge budget to reach out to your target demographics.
Plan & Budget Accordingly
Crowdfunding as a working capital option isn’t a guarantee. When you go after traditional loans and alternative financing, you know you can plan and budget based on what you receive. With crowdfunding, you may or may not be funded within your time frame. Loans and alternative funding are often better choices when you need guaranteed financing.
Fees, Terms and Conditions
Almost every type of funding will have fees added. Crowdfunding can take up to 12 percent of the money you’ve raised. You may be better off taking out a loan with a higher interest rate than you would spending your time running a crowdfunding campaign.
Consider Your Time Frame
Although getting a traditional loan can be a slow process, crowdfunding can also be tedious and time-consuming. If you’re looking for quicker funding option, alternative financing, such as merchant cash advance or accounts receivable financing, can often make a different to your business.
Every business should consider their specific goals, industry, market and economy before taking on any type of financing. Choose the method that helps you achieve your goals.
Diamond Commercial Group has financing options that will help you grow your business. Talk to one of our financial specialists to find out what fits into your business plan and goals.