How to Get Business Leads
When establishing a company, discovering ways on how to get business leads require choosing the best financing option. It’s one of the most convenient choices for any startup and businesses with poor credit.
Finding the best business leads comes with a cost, and not everyone can qualify for traditional loans. Often, alternative financing is the best way to stay afloat and grow in the saturated market. There are many instances wherein a business loan can help you as an owner or proprietor. You only need to choose the best option out of the many loan products that are available in the market today.
MasterMCA is a premier financing agency that can assist you with your needs. Our firm has various loan offers that are perfect for small businesses regardless of niche or nature. We have packages that can cover various purposes. You can learn more about our lending options that meet your needs, especially when finding how to get business leads.
What are small-sized businesses?
The definition of small businesses may vary as per the financing agency, but they follow several criteria that identify such enterprises. For instance, micro-businesses are those run by a sole proprietor and with an annual revenue lower than $1 million. They typically avail themselves of up to $250,000 loans. They operate on a small scale and often have a staff count lower than six employees.
Small businesses are retail operations or services that require less capital investment and less workforce. They operate with little to no machinery. They typically generate an estimated annual revenue of $20 million or less.
Small businesses are the US economy’s lifeblood by creating new jobs and driving innovation and competition in the market. They account for almost half of the country’s economic activity. It is said in a report that every dollar a person spends at a small enterprise funnels 68% of the amount back into the community.
How to get business leads
Finding loyal customers doesn’t happen overnight. You need to have a solid business plan that reels in your potential clients. Your product or service must also meet or exceed their expectations. To do so, you should allocate a hefty budget to develop, design, and build your customer-centric company.
Seeking assistance from lending agencies opens you up to business growth opportunities. Loans allow you to explore ways on how to get business leads. You can try learning more about different types of financing and what they can do for you.
Defining small business lending
Small business financing refers to loans designed to accommodate the credentials of startups and businesses with little to no credit history. These financing products generally have a faster application process and easier qualifications.
According to the US Small Business Administration or SBA, there are approximately 32.5 million small businesses in the country. These enterprises are actively seeking business leads, which calls for significant investment. As a result, many of these companies need financing that is quick, easy to qualify for and hassle-free.
Small business lending gives the entrepreneur the freedom to choose different loan types that lets them find ways on how to get business leads. This alternative funding allows you to build, maintain, improve, or expand your company. It can also help you navigate unexpected crises that disturb your cash flow.
Overall, small business loans are a streamlined and typically automated process that works best for companies that require financial support to stay grounded or grow.
How does small business lending work?
When your company starts scouting for business leads, the first thing to inspect is whether you have enough funds to do so. Small business loans provide an excellent option in this case since they are financing products made specifically for the needs of small-scale enterprises. These loans give access to working capital to help you invest more in your business. You can use them for a variety of purposes. You can acquire means on how to get business leads via renovations, staffing, technology, real estate, and other business acquisitions.
The typical loan structure involves the lender giving money to the business owner after successfully qualifying for the program. The owner is then expected to pay back the principal loan with interest over a set amount of time.
The small business lending market is constantly evolving in terms of regulations, technologies, and preferences, making the process unique for every lender. Some lending agencies charge fees upfront while others deduct them from the loan amount. Repayment terms and rates may also vary significantly from one lender to another.
Small business loans can either be secured or unsecured. Secured loans actually require you to put up something of value or collateral to minimize the risk for the lender. You can pledge cash, investments, real estate, or equipment for this type of loan.
On the other hand, unsecured loans do not require you to put collateral. You can start financing your plans to attract business leads as soon as you receive the money. However, you may have to provide a personal guarantee, which holds you personally accountable when your business fails to repay the loan as promised.
Why are small business loans important?
Keeping your business going entails having fast access to funding. The problem is that not all businesses have enough money in their account to make quick financial decisions. Small business lending ensures that you can pursue your plans on how to get business leads while also sustaining your daily operations.
Here are the benefits you can enjoy when acquiring a small business loan
If you seek funding via venture capitalists or investors, you can take as much as a year to raise the money you need. You can try seeking traditional bank loans, which are generally faster than the former option. However, banks may also have lengthy application and approval processes.
Small business lending is much faster when securing through an online lender or credit union. Lending agencies like MasterMCA offer a much quicker process. You can get approved for a loan in a matter of minutes, which works excellently for when you need immediate access to funds.
Maintain control of your enterprise
If you want to discover how to get business leads, you must readily offer your product or service to them. You should have business funds to provide your customers’ needs. However, financing through investors and venture capitalists takes away some of your control. That means they will have a say in how you will run your business, including how you approach your business leads.
Alternative lenders deliver more choices for small business owners. You can get the funding you need without giving up a piece of your ownership in return. Although these loans come with fees and interest, you can maintain control over how you want to run your company.
Flexible rates and fees
There is a wide array of loan products in small business lending. Some lenders are even amenable to customized packages that match your specific needs and requirements. In terms of cost to borrow, some loan types can win out against credit cards. They are worth considering especially if you are met with an unexpected crisis that potentially disturbs your cash flow.
Lower credit requirements
Businesses with little to no credit history can turn to alternative lenders for a loan. Traditional banks often require businesses to have a credit score from 600 to 650. If you don’t have such numbers, you can almost certainly expect your loan application to be declined. This enables you to apply the best tactic on how to get business leads without worrying if you can afford to do so.
Easier qualification and faster approval
Traditional loans often require a lot of paperwork and other requirements. In some cases, you might have to keep submitting supporting documents several times until the loan officer is satisfied with your credentials. But small business lending options only require fewer qualifying documents. Once you provide such papers, you can expect a quick turnaround and response from the lender.
Here are some documentary requirements that a lending agency may ask from you:
- Profit and loss (P&L) statement
- Cash flow statement
- Balance sheet
- Business plan
- Tax profile (business and personal)
Questions to ask before seeking small business loans
You need to ensure that you have funds to attract and convert business leads. If you need quick financing, you need to iron out the details of the loan to make sure that you’re signing the best deal for your business. Here are a few initial questions you can ask yourself before searching for the most appropriate funding type:
- How much money does my business need?
- What is the purpose of the loan?
- What loan term can I afford to say yes to?
- What is the current financial status of my business?
- Do I have collateral to offer?
- Do I have any existing loans?
- Should I opt for a short-term or long-term business loan?
Once you know the answers to these questions, you will have an idea of the best approach on how to get business leads.
Common types of small business loans
The US Small Business Administration is a government agency that aids small companies in the country. While it does not hand out loans directly, the bureau partners with qualified lending institutions to offer small business loans with less equity and attractive terms for owners.
The SBA 7(a) loan is the most common small business lending from the administration that can be used for a variety of purposes. It is flexible and allows you to borrow as much as $5 million with a maturity of ten years.
If you need to purchase major assets such as real estate or equipment, you can avail yourself of the SBA 504 loan. The program structure involves 40% funding from the agency and 50% from the participating lender. The remaining 10% will come from your own pocket. The 504 loans can have a maximum amount of $5.5 million with a maturity of 10-20 years.
Traditional term loans
The typical assumption for loans falls under traditional term loans, which are offered as a lump sum to the borrower. You can expect concrete repayment terms and floating or fixed interest rates for this type of loan. Lenders usually give you free rein over how you want to spend the money so long as they are designed to explore ways on how to get business leads.
Lines of credit
Business lines of credit work similarly to credit cards in that they have a revolving limit you can borrow at any time. You can spend a portion of the amount and repay it to replenish your credit. The only time you pay for interest is when you draw money from your account. Therefore, you will only incur interest charges every time you borrow money.
Another type of small business lending works specifically for equipment purchases. These loans are designed to help finance large equipment and machinery, which may include vehicles, furniture, and computers. The purchased asset typically serves as collateral to offset the risk for the lender. In case you default on the loan, the lending agency can take back the equipment to recoup their losses.
If your business is struggling to maintain a healthy cash flow because of unpaid invoices, you can seek invoice financing to sort out the issue. This type of loan allows you to “sell” a portion of the unpaid invoice to the lender and get an advance of the value upfront. You can then collect the unpaid amount from your clients and repay what you owe.
Merchant cash advances
MCAs or merchant cash advances let you borrow money against future sales. You can receive a lump sum in exchange for a cut of your daily debit or credit card sales. You can also repay the loan by making weekly automated transfers from your business bank account.
Frequently Asked Questions
What is the easiest loan to apply for?
Online lenders like MasterMCA are some of the fastest and easiest options when it comes to loan products. You can get approval in just a few minutes and receive the money in a matter of days. Even if you have a poor credit history, you can still try to find a suitable loan from online lending agencies.
What do lenders look for in borrowing businesses?
The most common requirements for borrowers include their time in business and monthly revenue. Lenders want to make sure that you can afford to pay your monthly, weekly, or daily dues satisfactorily. Some financing institutions may also inspect your credit score, although they do not prioritize it over the other requirements mentioned.
What will it cost me to apply for a loan?
Fees and charges vary depending on the lender and the type of loan you want to get. To make sure that you can afford the loan product, you should discuss with your chosen lender the associated fees and rates. For instance, the funding agency may charge an appraisal fee or processing fee for your application.
Will I be personally liable for the loan?
Unsecured small business loans may require a personal guarantee, which states that you are personally responsible in case your company fails to repay the debt. This legal document minimizes the risk for the lender but can limit the protection your business structure can offer for you as an owner.
Do I need perfect credit?
Don’t get discouraged to find means on how to get business leads even if you have a poor credit score. Many alternative lenders offer flexible solutions that match your creditworthiness. It’s still possible to secure a loan despite little to no credit history.
How long will it take to repay the loan?
The repayment term varies according to what you agreed with the lender. That said, you should discuss in detail what your repayment terms are and whether they come with fees. Knowing this information can help you determine if the loan is right for you.
Small business lending provides a vast array of options on how to get business leads, which can become overwhelming, especially for new business owners. It’s crucial to evaluate your needs first to help you narrow down your options. You can approach experts from MasterMCA to help you find the most suitable loan program. We are a team of professionals who can guide you towards making the best financing decision for your business!