Dear Canadian business owners, the Synergy Merchants team knows you’re concerned about the state of your business. Thanks to the pandemic, your sales have likely dipped over the past year. If you’re in need of some extra working capital to help buy new inventory or equipment, advertise your brand or even renovate your work space, you’re not alone. Business owners from all over the country are also thinking of ways to pick things up.
What are the steps necessary to apply for a bank loan?
Applying for a business loan from a bank requires many steps. But first, let’s discuss exactly what a bank loan is. A bank agrees to give a business owner an amount of capital up front. In return, the business owner must pay that amount back over a period of time with interest. What this means is that the borrower will have to pay a minimum amount of that loan, with some interest on top, each month.
If the business is doing well, the business owner can make larger payments. This will shorten the length of the loan and lower the amount of interest that is paid in total. However, it’s important to note that if the business isn’t doing so well, those minimum payments are still required. Any payments that are late or unpaid will run the business owner the risk of late fees and a potentially higher interest rate going forward.
What do banks require to approve business loans?
You’ll need a strong credit score. Banks are not at all likely to approve business owners who have demonstrated difficulty in making payments on time in the past. It will also be important to have some collateral. A piece of property such as your home or vehicle or even equipment used for your business must be put on the line. Banks need to ensure that if you’re unable to repay your loan, they are not on the hook for the missing money.
Of course, this does mean you may lose the collateral you put up. To avoid this, it’s vital you make your payments on time. Having a good business plan prepared is also important. A bank’s loan officer will want to know exactly what you plan on doing with the bank’s money. Your plan should outline how you intend on making the money back. This will give the bank greater confidence its loan will be repaid.
What are the steps necessary to apply for a merchant cash advance?
A merchant cash advance involves the business owner receiving a certain amount of money up front. He/she agrees to repay the advance in addition to a flat fee over time. However, there are no minimum monthly payments required. Instead, a small percentage of the company’s credit and debit card sales are automatically put towards payments.
Therefore, if a business is doing well, it pays back the advance quicker. If business is slow – as it may have been throughout the pandemic – repayments are slower. There is no accruing interest, no late fees and no penalties! In addition, your approval for a merchant cash advance is guaranteed!
For more information about Synergy Merchants’ unique merchant cash advance program, please don’t hesitate to call us at 1-877-718-2026 or email us at firstname.lastname@example.org. You can also apply online for a free, no obligation quote!