Can You Use Instant Loans to Fund Your Small Business?
Yes, you can use instant loans to fund your small business as many entrepreneurs have been doing in recent years. There are, however, quite a few things to take into account and be wary of, plus you should also ensure that you understand the nature of instant loans before applying – you might come to realise there are other options available to you that would be more advantageous than applying for an instant loan.
What is an instant loan?
Instant loans are essentially loans with fast approval rates, as fast as an hour in the case of some lenders. There are a variety of instant loans on the market, including payday loans, so you really need to understand the nature of the loans you choose to apply for, what their pros and cons are and what alternate borrowing options are available to you.
Tips for applying for instant loans
Applying for an instant loan to fund your small business venture involves a certain degree of risk, most notably the toll that your inability to meet your repayment commitments could take on your credit rating, as well as applying to a lender whose interest rates could have been improved upon with the result that you repay more in interest than is necessary.
Here are three tips when applying for an instant loan to fund your business venture.
1. Don’t quit your day job just yet
The likelihood of being approved for an instant loan increases significantly if you have a steady income coming in from an employer. Lenders aren’t interested in what your business can ‘achieve’ with the funds you procure from the loan – they want to see solid evidence of your ability to meet your loan repayment commitments.
If you’re considering quitting your day job to focus on your small business venture fulltime, apply for an instant loan before you quit – you’ll find that your chances of being approved increase significantly as a result.
2. Keep thorough business records
If you’re no longer employed and you’re working on your small business venture on a fulltime basis you’ll need to provide the lender you apply for cash loans to with solid evidence of your ability to meet your repayment obligations.
Consequently, you’ll need to keep meticulous business records so as to show lenders your incoming revenue, your outgoing expenditure and preferably, cash flow forecasts that further prove your ability to make loan repayments.
3. Know your credit rating
Whether you’re applying for an instant loan, a credit card or a mortgage with which to invest in a home for your family, it’s imperative that you know your credit rating so as to comprehensively understand the borrowing options available to you.
Depending on the country in which you live, credit rating agencies like Equifax and Experian are required to provide you with your credit rating once a year, after which you’ll have to pay a fee to access your credit rating.
Moreover, websites like CreditKarma.com can provide you with your credit rating for free – websites like these often, however, try to sell you something whilst you’re accessing your credit rating – plus there are also free credit score calculators that ‘estimate’ your credit rating.
Why apply for an instant loan to fund your business venture?
Entrepreneurs commonly cite one or more of a number of reasons for applying for instant loans to fund their business ventures, including:
1. Enhance cash flow
‘Cash is King’. Enjoying healthy cash flow is essential for all businesses because it enables them to buy, sell and provide products and services to their target markets.
2. Expand their business operations
Businesses often require funding to expand their business operations which can prove impossible without access to finance in the form of loans.
3. Step up their marketing efforts
Successful marketing campaigns require adequate funding. Applying for instant loans is a popular means of procuring the funding required to step up a business’s marketing efforts.
The decision to apply for an instant loan isn’t one to take lightly, though with an understanding of the nature of instant loans and your small business borrowing options, applying for an instant loan with which to fund your small business venture could prove highly advantageous.
About the Author:
Morgan Finance is a company that consistently trains their employees to better service customers. They are based in New Zealand and are reliable providers of cash loans for personal or business use.