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If you are looking to take out a business loan with no collateral, there might be a suitable option that can still provide you with the necessary funding. Take a look at the following options and pick one that best meets your operational needs.

Working Capital Loans

Working capital or cash flow loans are typically meant to assist firms in covering short-term costs like a projected cash flow shortage or an investment in expansion. Some instances are:

• improving a leasehold
• redesigning a website
• upgrading a product
• spending on marketing to boost sales
• recruiting new salespeople
• acquisitions of companies

Banks frequently demand security for this type of loan, commonly in the form of accounts receivable, merchandise, or the business owner’s own assets. If the loan is for a smaller sum, however, some institutions do not require one.

Market Expansion Loans

A working capital loan is comparable to a loan for market expansion. Often, a business can receive one without collateral if it has a good financial position and a proven cash flow. It is designed for companies that require funding to expand. Your market can be expanded, a new product can be introduced, or a new location can be opened with the funding. Usually, the terms are created to specifically address the requirements of expanding businesses. To safeguard the company’s working capital, they might incorporate flexible repayment options, such as structuring payments to increase or decrease depending on your cash flow, a simple re-advance process (a way to re-borrow money that you have already repaid on the loan), and paying off the loan without penalty.

Technology Financing

Similar to working capital loans, technology loans have terms that are especially tailored to businesses wanting money to invest in hardware, software, or IT planning, or technology corporations looking for expansion capital. Typically, these loans have flexible payback plans ideal for IT investments or businesses. This kind of loan may be approved without the business owner putting up any collateral, depending on the company’s financial standing.

Personal Loan

Some personal financing options, including credit cards and personal lines of credit, do not demand any collateral. If the sum is not paid off each month, the high interest rate on credit card debt, however, may make such financing unaffordable.

Family, Friends, and Angel Investors

Even though they could request a share in your company, your family, friends, and angel investors might be prepared to offer you money without requiring any collateral. Wealthy people who invest on their own or through angel investors in high-potential start-ups to offer early-stage capital are known as angel investors. They frequently look for an ownership share that can be sold for a healthy profit as the business develops. They also want to have the chance to advise the company to offer their contacts and knowledge.

Loan with no Collateral

Depending on how much financing you are looking at, and the current financial status of your business, you can still take out some form of funding to channel towards your operations. Pick the best type that you can repay on time each month to avoid falling into a cycle of debt.

In today’s highly competitive financial industry, borrowers are presented with a large array of financing options that can cater to their unique needs. If you are looking for a suitable option to finance your business operations, learn the different benefits of taking a small business loan. Follow our article for more information.

Kickstart Business

If you have decided to start a business but are short on funds, a small business loan can help kick things off. For some cases, you may secure a substantial amount of money which will ensure that you have no issues to cover the initial startup costs. However, it is not advisable to borrow much more than what you truly need, else you risk steering your business into a cycle of debt. The majority of cases, it is recommended to wait until your operations have stabilized over some time before pursuing a business loan.

Expand Operations

One of the key benefits of a business loan is that you can expand your business operations. Through the secured financing, you can stretch your audience reach or service locations to grow your business.

Build Business Credit

Borrowers have a higher chance at securing financing when they have a good business credit score. For startups and new business owners, a small business loan will provide you the chance to build your business credit score. As long as you maintain regular payments each month, you will achieve a strong score.

Buy Equipment

Equipment is an essential component of most businesses. If your operations require certain types of equipment that are costly, a small business loan can cover the associated costs. This enables you to keep other funds intact to develop on other areas of your operations. For those with outdated equipment, a small loan will also finance the cost of replacement.

Buy Inventory

For seasonal businesses, you may need to buy inventory during certain months. For instance, swimwear retailers earn the most revenue during the months of summer. Through a small business loan, you can use the funds to buy inventory during winter, in preparation of the upcoming summer so you can cut down on expenditure.

Save on Taxes

Business taxes can get pretty costly and there is no denying it. However, it is imperative that you make prompt payment to avoid being penalized. This can in turn implicate the financial health of your business as well as your overall business outlook. Through a small business loan, you can save on taxes because the interests are tax-deductible. You may be concerned about the possibility of the interest rate altering during your loan tenure, but this can be countered by choosing a fixed-rate option.

Taking a Small Loan

A small loan is a viable option for business owners who have just started out or looking for a small amount of funds to finance minor aspects of their operations. Small loans have lower interest rates, do not need a collateral, and are faster and straightforward. Depending on your business needs, you can consider a small business loan to enjoy immediate funds disbursement.

Today’s financial industry is getting increasingly competitive, offering a host of options and attributes to cater to the varying consumer needs. Before taking out any type of loans, it is essential for you to do some research on the different types of financing options to secure the most ideal one that best matches your unique needs. Learn more about the different types of small business loans that can help secure your secure your financing.

Business Line of Credit

For business owners looking for premium flexibility in their financing, a business line of credit is a viable option. The amount of loan can range anywhere from $1,000 to $500,000 and the funds can be disbursed typically within a week or two. For the interest rates, they vary and can range from 8 to 24 percent. Take note that business lines of credit are revolving, so borrowers can access the funds as many times as they need, instead of receiving a lump sum.

SBA Loan

The Small Business Administration (SBA) helps small businesses secure the financing they need to support their operations. Small business owners who have sought help elsewhere but failed to get financial assistance, the SBA can render the necessary help and resources. Borrowers can expect to get financing from $50,000 to $5,000,000 with loan repayment terms that range from 10 to 25 years. One downside that the SBA loan is known for is its exhaustive application process that can take an extended period of time and require a lot of paperwork.

Short-Term Loan

Short-term loans are very popular among borrowers who are looking for fast and convenient financing. The paperwork involved is usually much less extensive and funds can be disbursed within as little as only 24 hours. Short-term loans are highly recommended for unexpected expenses that can include hiring new staff, replacement of equipment, expanding operations, improving infrastructure, and others. The interest rates of short-term loans are typically much higher to compensate the non-requirement of a collateral.

Business Term Loan

A business term loan lets borrowers acquire working capital, purchase equipment, expand their business, and hire new staff. This has been a highly favorable option among business owners for decades as they are highly reliable. Fund are disbursed within a couple of days and can range from $5,000 to $2,000,000. A business term loan can be repaid between 1 to 5 years and its interest rates can start as low as just 6 percent.

Merchant Cash Advance

A merchant cash advance lets you borrow from your future earnings. Once you have gotten approved financing, you will only start its repayment through a certain agreed-upon percentage of your daily credit card deposits which will be withheld by the lender. Merchant cash advances are also fast in terms of funds disbursement within 24 hours and the amount can range anywhere from $5,000 to $200,000. Such convenience can be enjoyed at a much premium interest rate that can start from 18 percent. The application process for a merchant cash advance is also surprisingly simple and there is no collateral involved.

After having made a profit, businesses can put back some or all of that profit into their business to support growth. However, businesses may at times need additional financing from a credible lender and for most cases, they turn to banks for the necessary financing. If you are looking for alternatives to bank loan, we have put together a series of options for you to consider according to your business needs.

Alternatives to Bank Loan

Bank loans are highly common for small businesses that are looking for financing. However, some may find that the stricter lending policies make it difficult for them to secure loans which are crucial for their business operations. Thankfully, there are other alternatives to the traditional bank loan which businesses can turn to.

Business Line of Credit

A line of credit is an amount of money that is set which is for use by a business for financing purposes. The line of credit can either be secured or unsecured. Some form of collateral is required for a secured line whereas an unsecured loan does not. Once the line of credit amount has been paid off, the amount can be used again in the future.

Merchant Cash Advances

A business can receive a lump sum of money for financing through a merchant cash advance. This is made possible in exchange for a percentage of their credit card sales in the future. For those who receive regular credit card payments, this alternative is an ideal option.

Working Capital Loan

This loan helps a company to fund its core operations. This is useful when day-to-day operations are causing financial hardship due to factors like seasonal businesses or companies that are subject to cyclical sales. However, it is also not impossible for businesses from various industries to experience working capital shortfalls from time to time. A working capital loan is not a specific type of loan but more of a category of loans. Any type of loan that provide financing support for short-term business operations could be considered a working capital loan.

Equipment Loans

Equipment is an essential component of most businesses, hence if that equipment fails, the business operations can be adversely affected. In such times, many small businesses lack the capital to perform equipment maintenance. As business owners can make use of their equipment as collateral, they can get financing for a large portion of equipment cost.

Professional Practice Loan

This is a specialty loan that is designed to provide financing for accounting, legal, and medical professionals. Most of these loans cater to medical practitioners as they often have greater financial needs due to the hefty cost of medical equipment. The loans could be used to buy initial equipment or acquire other professional practices. Debt consolidation and operational expansions with real estate are also other possible uses for this type of loan. These loans may also include malpractice insurance costs.

Today’s financial industry provides two basic lending options: cash flow based and asset based lending options. These loan types apply substantially dissimilar qualifying formulas, resulting in significantly dissimilar loan sums for the borrower. If you are seeking suitable financing for your business operations, learn more about cash flow lending and how it can benefit your company.

Asset Based Loans vs. Cash Flow Lending

Asset-based loans are based on the balance-sheet liquidation value of assets. If you do not have many assets, the loan amount is very small.

Cash flow-based loans, on the other hand, are based on past and predicted future cash flows. This structure can give a substantial amount of funds if your company has a good cash flow and a low asset intensity. This is frequently utilized by high-growth or acquisition-oriented businesses looking to grow and branch out. While cash flow lending is riskier for the lender and more expensive for the borrower, it usually has a revolutionary effect on business growth, resulting in a step change factor of expansion.

Cash Flow Lending Benefits

• Higher Funds

Instead of an advance rate against assets, cash flow loans are built upon various trailing EBITDA (earnings before interest, taxes, depreciation, and amortization). This frequently indicates that the business is eligible for a loan that is significantly larger; in some situations, up to five times what a bank would offer.

• Extended Flexible Terms

Cash flow loans often have terms of 5 to 7 years and are tailored to the borrower’s needs. A balloon payment is typically used to postpone repayment. This enables the borrower to postpone loan payments and use cash flow to expand their company.

• Less Collateral

Compared to a traditional bank loan, cash flow loans are typically unsecured or second liens. They will extend their lending beyond the company’s equity valuation, providing you with important financing to support expansion. A personal guarantee is not always necessary.

• Scalability

Cash flow loans are based on the enterprise value or equity worth of your company. They are more likely to contribute more finance for future expansion because they believe in the value of your equity.

• Inexpensive Equity

Cash flow loans come with higher interest rates but no company stock. Roping in a cash flow lender is preferable to recruiting an investor. You will get to continue keeping your shares and retain management of the company.

Picking the Right Type of Financing

Depending on the foundation of your company, you can select the right type of financing to ensure you receive the funds you need to expand and diversify your operations. Having the necessary funds will help support business growth which is crucial to sustain your operations in the long run. Whether you are running a startup or an established corporation, borrowing just enough money that is well within your financial means can help ensure steady repayments can be made each month. This will prevent jeopardizing your business finances and support better financial management.

Your ultimate objective as a business owner is to be prosperous and acquire the financial freedom you have long desired. Your goals are not unrealistic, but it is crucial to remember that a business success does not always equate to financial success. Every day, major issues confront businesses, with financial challenges taking center stage. In order to avoid being caught off guard, it is wise to fully prepare. The following are the typical financial issues that you need to overcome:

Insufficient Cash for Operations Maintenance

You have been in business for some time, so you are aware that money is needed to make money. However, the bulk of business owners consistently struggle with controlling cash flow for daily operations. According to a 2019 poll, 33% of small business owners identified a shortage of funding as their worst financial concern. Even if you have yet to encounter this issue, you should be prepared because it is a persistent problem in all businesses.

To pay for ongoing expenses like rent and wages as well as additional expenses like paying business taxes, repaying loans, getting equipment and supplies, and more, your company needs money. When there is not enough money to keep running your business, try to increase cash flow by taking out a working capital loan, for instance. Keep in mind that poor finances might ruin the company you have worked so hard to establish.

Keeping to a Budget

The management of important company activities depends on budgets. Unfortunately, many business owners find it difficult to keep to budgets. This is a problem that you will eventually run across as your firm develops. Discipline is essential when it comes to adhering to your business budget. Make a realistic plan outlining your company’s objectives and potential for profit as a starting point. To make sure you are on the correct track, arrange monthly budget reviews. Constantly creating and revising your budget fosters accountability and aids in financial decision-making.

Unexpected Expenses

It is simple to overlook some charges that you cannot forecast when you manage a variety of recurrent bills. These expenses encompass repairing equipment, replacing goods that have been stolen, leasing equipment, adding extra security measures, repairing damage from accidents and other calamities, and others. Include emergency expenses in your budget to make sure these costs do not negatively impact your company’s operations. To determine the precise amount you must set aside for unexpected expenses, use your historical data. For instance, if your company’s A/C system needed maintenance last year, budget $300 more for that expense this year.

Marketing and Advertising Costs

One of the main difficulties that small business owners confront is marketing and advertising. It is difficult to find resources to compete with expensive marketing efforts launched by well-known businesses in your niche. This problem is not difficult to solve. Invest in efficient SEO methods rather than burning through your cash attempting to compete with major brands. Always produce useful material that raises your search rankings, and distribute it on many platforms. Regularly giving your prospects value will encourage them to seek out your goods and services. At some point, you will increase your leads, conversions, sales, and profits.

As a veterinarian, you should be aware that in addition to ensuring the wellbeing of the animals in your charge, you also need to make sure that the appointment procedure is smooth and simple for the pet owners. It should be noted that even if your practice experiences exceptional success, you might not have enough money left over once all the bills are paid and certain recurrent expenses are covered. The following are a few strategies you can use veterinary loans to improve your practice.

Up-to-Date Tech

The harsh reality of the medical field is that having access to quality equipment means that your patients or animals will receive better care and treatment. You have a duty to maintain your technology up to date and give the animals the attention they require because pet owners are spending so much money to aid in the animals’ recovery. As a result, you can use veterinary loans to lease equipment if you notice that your equipment is old or not functioning as well as it once did. Because they will then be willing to put their trust in your ability to perform medical operations in the site of your business, which can help to ensure the loyalty of the pet owners.

Increasing Headcount

Customers leaving veterinary practices due to lengthy wait times is one of the main issues that business owners deal with. If you are unable to handle the volume of clients and they begin to cancel appointments, it could reflect poorly on your reputation and discourage future clients from using your services. You should use the business loan to recruit more support staff in order to combat this issue so that they can assist the clients and benefit from significantly lower wait times. If the demand is still too great, you can think about using working capital loans to recruit an additional veterinarian.

Marketing Purpose

It is critical that we move our services online in this era of technology. For this reason, investing in digital marketing methods is a good idea when trying to attract new clients. Keep in mind that running a veterinary practice is like running a company. Thus, you must never be content with your current clientele. Always keep an eye out for opportunities to increase your following. While retaining clients is crucial for businesses, acquiring new ones is equally vital if you want to assure the expansion of your practice. You can improve your marketing efforts by updating your website in addition to using print advertising through the funds from the veterinary loan.

Veterinary Loans to Elevate Practice

We hope you have benefited from our sharing on the different ways that veterinary loans can help in elevating the infrastructure of your practice. With correct funding and the right processes, you can take care of the current wellbeing of your clinic while also improving the overall customer experience. Having enough funds to always sustain daily operations is essential to continue practicing as a vet to support the needs of the pet/pet owner community.

We all love our pets. For many people, pets are dearer to them than their children. The Petcare industry is worth billions of dollars in the US and that is not an exaggeration. Close to three-quarters of all households in the US own a pet. These numbers are staggering and they show no signs of abating. That is why pets and pet care have become a very profitable industry.

What is Petcare?

When we think of pet care, we immediately think of veterinary services. It is not like that anymore. Pet care is more than just taking your pet to your nearest vet in need of medical care. Pet care comprises a whole lot of services and activities that people tend to obtain for their furry (and not so furry) friends. Let’s take a look at some of the popular ones below;

Boarding facilities: It can be both for a day or on a long term basis. Pet owners like to lodge their pets in a safe, friendly, and hygienic place while they are away for work, holidays, or other commitments.

Pet Spas: Pet spas have caught on in recent times. They offer a host of services that include regular to luxury baths, manicures, pedicures, trendy haircuts, and whatnot.

Gyms and playlands: Pets can get bored with their daily routines and environment. They need a healthy dose of exercise and playtime daily. So, gyms and play centers have sprung up that cater to them exclusively.

Training centers: These are especially popular for dogs and cats. We all want them to be obedient and behave properly. A training facility with trained staff would help them become just that.

Opening a pet care center:

As you can see there are plenty of options when it comes to pet care. You can be innovative and come up with an entirely new idea when it comes to pet care. If your idea clicks, then you can be rolling in money very soon.

Cost of opening a pet care center:

The cost of opening a pet care facility comprises of a piece of land, located at a suitable place, hiring of trained staff, toys, equipment, and other supplies for the pets, and lastly, you will have to set aside a budget for advertising and marketing. If you do not own land, then you will have to lease a place and pay for its rent. Once you have drawn up a business plan adding up all the expenses you would know how much capital you need to start this business. You would also factor in your expected income and find out your working capital requirements for every month or so. Once you have the financial figures, you can start looking for a source to arrange finances for it.

Going right into the meat and potatoes of working capital made out by investors with terms ranging anywhere from 3-24 months is for the business owner to take advantage of the early prepayment discount that VIP Capital Funding has to offer. Why may you ask? Usually, a merchant cash advance has higher interest rates ranging from 20%-40% on average over the course of the term. That is a bit high but it is also a tax write-off just to add. But the point of this entire blog is to take advantage of the early prepayment discount ranging from 8%-15% if you were to pay the loan off within 30-120 calendar days. This is extremely beneficial for business owners who can invest in material, staffing, advertising, equipment, etc. and make a large gross return between 300%-500%. This way you are accelerating the growth of your business by taking on anywhere from $50k-$500k you can invest in what you need for a certain period of time and turn around and pay the working capital off at a much cheaper rate than if you were to drag out the entire term.

For merchants who cannot pay the merchant cash advance off early, the small business loan also remains beneficial because it can serve as working capital that keeps your own sweat money in your pockets while you are planting the seeds buying time for a more prosperous quarter by forecasting your growth plan. VIP Capital Funding serves 700+ industries but the concept usually remains the same across all businesses, and that is you need working capital to invest, you need to market to your clientele and lastly sell your product or service. There is a lot of planning and expenses involved but when executed correctly a Merchant Cash Advance backed by investor funding can serve of great benefit, as there are no strings attached and the capital is very flexible in what you want to use for your business. You’re not tied down by an investor who is taking a % of your gross or net revenue, it’s just you, a confident business owner with a vision to maintain or help grow your business to its ceiling. VIP Capital Funding’s expert financial consultants can help you right away to solve your financial business problems. Just visit vipcapitalfunding.com and fill out the web form or email [email protected]