Everyone starts small in the business world, but ideally, companies grow and expand with time. In many cases, businesses require extra funding to support expansion, and there are many situations when taking a loan is the cheapest option. The low revenue generation capabilities of small businesses, the lack of many years of historical data and experience may seem like a strong barrier, which scares many owners away from loans. That is why we created this comprehensive guide on the topic of how you can get a small business loan. Is your business considered small at all? What is the best loan you could get and how does it work? All questions will be answered today.
What is a Small Business Loan?
It is not always easy to understand how small business loans work, especially for founders who are inexperienced in banking and financials. Small business loans are available to organizations that have fewer than 100 employees. (During the pandemic, this limit was raised to 500 employees in the US, while other countries increased the maximum loan amount or made the requesting procedure faster). This type of financial assistance can be used for various purposes as long as it serves the growth of your business.
There are different types of business loans: some of the loans work in the same way as credit cards, while other types of loans support the equipment of the business or provide funds for rent, debt payments, and payroll.
How to get a Business Loan?
Although applying for a small business loan may not seem difficult, there are key factors you need to consider if you want a successful payout. Let’s see the list of the most common small business loan requirements:
– You must be registered as a for-profit business owner.
– Of course, only legal activities are considered.
– If you are on probation, you cannot file a business loan application.
– Small loans (usually between $25,000 and $500,000) are available to businesses that have fewer than 500 employees and have earned an average of less than $7.5 million over the past three years (while your net income is less than $5 million).
– You must prove that you are investing your own money and time in your business.
– The business needs to be physically located in the US, not just on paper, and you need to make sure you are providing services to people from the US.
– You will need a detailed plan that lists what you will use the loan for once you receive it.
If you are unsure about how to apply for a business loan do not hesitate to contact us at IOOGO, as we can guide you from the very first steps to the day you receive the money.
Business Loans for Small Businesses
Once you believe that you qualify for the loan, make sure you collect all the paperwork that might be useful. It is also useful if you gather as much information as possible so that you have accurate plans about what loan you want to apply for.
There are numerous types of loans you can choose from: some are designed to help you with your credit or with your monthly payments, while others are ideal for a short period. Loans for business owners are mostly available through direct providers, most of which operate online. Banks, whether commercial or municipal, also have different offers for small business startup loans.
If you’re not sure which loan would be best for you, our team at IOOGO is always here to help you figure out what’s most ideal for you and your business.
CFO Services for Small Business
While many small businesses do not have the budget to hire full-time Chief Financial Officers, applying for a loan is definitely a situation in which even a virtual CFO can minimize the risks and identify the way to success. The professional expert will review your accounts to ensure that all balances are correct. Not only can this help with the general management of your business, but it is also a good basis if you are applying for a company loan.
Nowadays, as our world shifts more and more towards becoming digital, it is not necessary to hire a full-time financial specialist to control your accounts. You have the option to hire a virtual CFO instead. If you decide to use this method, you need to make sure that the finance officer has access to all of your confidential information regarding payments, payroll, and any information that your business is based on.
The CFO’s duties include not only the general review and correction of the financial information you keep and maintain about your company, but also ensuring that you are using the most up-to-date software available. Using accurate solutions enables your company to operate more transparently and enhances efficiency, resulting in an easier job; easier not only for your employees but also for you and the CFO.
Here at IOOGO, we can help you build a business that will survive not just the next few years, but an entire century. Our CFO Program combines technology and personal support to ensure your business grows the way you envisioned. Our CFO’s responsibilities include running payroll weekly, bi-weekly or monthly and making sure all taxes are paid accordingly. Even inventory can be managed and a major clean-up is also possible if you feel your books are not accurate. It is not easy to file business-related taxes even if your company is small. We make sure your business information is logged and stored securely so no one can access it, just you.
In a company with so many responsibilities, you might wonder what the CFO’s salary is. Our different packages will allow you to pick what’s best for you. In addition to the software subscription, our base price includes monthly accountant support. Even if you have multiple bank accounts, a dedicated accountant can take care of your financial concerns if you select the more comprehensive service.
Having a business, no matter how big or small, is always a challenge. That’s why we created IOOGO, so we can help you if you don’t know how to start your journey into the business world. Small business loans are available to fund your growth, but it’s up to you if you want to take advantage of them.