Businesses of all kinds are constantly looking for ways to improve their business, provide more value to customers, lower their bottom line, and otherwise become more successful.
How a business defines success is largely up to that business and the team that runs it. But for all businesses that put “sales” or “profit” near the top as one of the important factors for determining success, a company has to be able to consistently maintain a positive net income.
That’s nothing new, however, but there are virtually countless ways for a business to improve their business to increase sales.
And while each business has their own preferred way of increasing sales, many of these initiatives require a significant amount of funding, especially if they want to go through with it with a bang, go longer than ever, and do it in even less time.
This is where big business loans become really important for larger businesses. While small businesses may have a comparatively easy time getting anywhere from a few thousand dollars to a few hundred thousand dollars in funding, big business loans give larger companies the ability to receive much higher amounts of funding. We’re talking $500K to $10M in funding for some businesses, or even more in some situations.
Big business loans are the vessel for shortening the amount of time it takes to capitalize on a new business growth opportunity. So how does a business get big business loans and use it for funding in their own company?
1) Curate Financial Data of Your Business
Before you even consider looking for big business loans, you’ll want to get together all of the financial data related to your business. Typically financiers are going to be looking at your credit score, net worth, personal and business cashflow, time in business, possibly how much collateral you can provide, what your profit (or loss) has been each quarter for the past few years, and so on.
This financial data is what a financier is going to use to assess your overall risk and whether or not they’ll actually give you big business loans.
If you feel like your financial data might be alarming to potential equipment finance companies and banks, don’t necessarily rule out big business loans, as some financiers are willing to work with businesses as long as they have other redeeming financial factors or business qualities.
2) Map out a Proposal of How You’ll Use Your Big Business Loan
Once you’ve pulled together the required financial information to get big business loans in the first place, you’ll want to draft up a document that proposes how you’ll use the funding and why you need to get it from an outside source.
Lenders already know that you don’t have the cash on hand to make a purchase or to fund your next business venture (unless you are taking advantage of certain tax incentives present in certain financing opportunities), so you want to highlight what the funding is going to do for your business.
What are you directly getting out of having a much more significant amount of funding? Are you buying new equipment with your big business loans? Trying to buy a certain product or commodity in bulk in order to lower total cost (even factoring in the loan payments), trying to put on a major marketing initiative to grow your business?
At the end of the day, you want to show the financier that you’re getting big business loans from that you are knowledgeable about your business, industry, and market and that you are capable of paying them back after all is said and done.
3) Decide What Form of Funding You Need
There are a variety of different ways to get funding similar to and including big business loans. While big business loans are a common form of “catch all” type of financing to cover certain type of expenses and ventures, there are other forms of financing available. Make sure to weigh the different options and decide which makes the most sense for you.
One of the “best” options available to businesses, in terms of rates and repayment, but oftentimes the most difficult financing option to nail down. Loans from banks or the Small Business Association typically have much higher requirements and take much longer to secure (without a guarantee that you’ll get funded). If you have the credentials and patience, it’s worth trying, but may not be the best option if you need funding ASAP. Can take a couple of months to complete from start to finish.
Commercial Bank Loans
Getting big business loans from commercial banks is a good choice for some businesses, but depending on where you apply for business funding, your luck may be limited. Most commercial banks are going to have higher requirements before they give you any kind of business funding.
You’ll need a great credit score, many years of time in business (typically over three years), postive net income, revenues over $300,000 and can demonstrate a capability of repayment.
Commercial Equipment Leasing
A great alternative to getting big business loans outright is utilizing equipment leasing and pay it off over a number of years. At the end of the lease you have the option to either purchase the equipment (i.e., for $1 or the remaining market value) or pass on it to choose a new piece of equipment.
Depending on your business and market, you may be able to take advantage of equity crowdfunding. This type of financing allows you to raise up a significant amount of funding in exchange for equity in your business. This is a great alternative to stay out of debt or reduce monthly operational costs while still being able to gain access to the funding you need for your venture.
Big Cash Advance Loan
While it’s not the most cost effective option, a big business cash advance allows your business to gain access to a lot of cash the business needs for marketing, hiring employees or purchasing inventory in bulk. You can tell how much your business will qualify for by averaging three months of your business revenues. Business cash advance lenders will lend 75 - 150% of that three month average.
4) Combining Funding Options
When you’re seeking out big business loans, recognize that you’re not stuck to one form of business financing. You can shop around, find the best deals, and combine different forms of business financing to get what you need. One business lender may not provide the entirety of the funds you need, but may be able to help you with part of the funds and you can seek out another form of funding to match the rest.
When you’re seeking out funding for certain ventures, you want to check to see if there’s a more cost efficient form of business financing specifically tailored for that expense. For example, if you’re trying to purchase heavy equipment for your business, heavy equipment financing is tailored specifically to cover the costs of that equipment.
Contact us today at 866-458-4777 to discuss getting funding for your big business.