Online Business Loan Options

2 business people making a dealIf you need to fund your small business, then you are in luck because brick and mortar financial establishments are not your only option.  The choices for business loans are many – in fact, there are so many options, the process can be a bit overwhelming.

In 1995, small business loans made up almost 50% of all bank loans and according to a Harvard Business School study, that figure dropped by a third within 15 years.

With the benefit of today’s technology, online lenders can analyze such data as credit score and business cash flow, and in turn provide easier and quicker access to capital for your business as compared to traditional banks.  It is important to keep in mind, that getting a loan online has it benefits – like convenience and speed, it also has its downfalls as you will be paying for that convenience and speed by spending more on closing costs, etc. Learning about loans and all available options is important. Everyone will not qualify for loans from online lenders, as start-up businesses will not likely qualify. However, if your business is up and running for at least 12 months, online loan may be an option for you.

Let’s begin by taking a closer look at some loan options for your business

small business loan applicationTerm loans

This is when a determined amount of money is deposited into your bank account, and you will repay the loan (plus interest) over a fixed period of time.  This is a great choice for larger loans, as they can be paid off over a longer period of time.

Credit lines

A line of credit offers more flexibility than other types of loan options because you use only the monies you need at any given time and only pay interest on the monies borrowed.  Similar to a credit card – borrowers have access to monies that can be used to improve their business only when it is needed.  Repayment or accrued interest will not begin until the line of credit is tapped into.  The benefit to this type of loan is that you will not have to reapply, because if the loan is repaid in full (plus interest), the line of credit resets to the original value.  This is a great option for small businesses that want to have a little padding on their cash flow.

Invoice factoring

If you need cash immediately, borrowing against unpaid customer invoices may be the right option for you.  This will aid in providing immediate cash flow while you wait for customer to pay their bills.  This option is only available for businesses that sell services and goods to other business – therefore, they have invoice.  Usually, 85% of the invoice value is advanced and the financing company will hold back 15%.  Once your customer pays their bills, the 15% will be given back to you (minus fees – which are usually 3% for processing and 1% for each week that it takes for customers to pay the original invoice). In comparison to other types of business loans, this type is one of the most costly ways to fund your business, as you may end up losing a portion of the original invoice toward fees and interest rates.

Equipment Financing (Asset based loan)

Purchasing equipment is a large expense for any small business and many new companies don’t have cash in hand to make these large purchases.  In this case, lenders care more about a particular piece of equipment than the number on your credit score.  The benefit of this financial choice is that it will only last for the expected life of the equipment, which means that you will not be paying for something that is out-of-date.  The downside to this loan choice is that you will be paying more for a particular piece of equipment.

Merchant Cash Advances

If you need cash quickly, this may be the option for you and your business as this loan approval can happen in as little as 24 hours.  The advantage is that a business owner will not be punished for experiencing slow revenue periods, as the lender only takes a percentage of the credit card sales; however, this also means that on lucrative months, the lender will be taking more from your account.

Read More

Why You Need To Outsource IT Services For Business Growth

An in-house IT department plays an extremely vital role in an organization; however, it often requires a significant investment. Therefore, if having an in-house IT department is well outside of your company’s financial capabilities, then hiring outside professional IT services can be a wise and cost-effective move. However, if your company is considering to outsource IT services, there are factors that you must consider.

After all, when your company’s core values and culture do not match those of the IT firm, the results can be catastrophic. So, how should you go about hiring an outside IT service team?

Independent Contractor vs. IT Firm

Businessman typing on a laptopYou can choose to create an IT team that comprises of independent contractors. An independent contractor is an individual who is adept at IT services and is similar to a part-time employee. A contractor will often make use of company resources to provide the services required. However, they do not receive the same benefits as full-time employees.

On the other hand, you can choose to have an IT team from an IT firm. Often, IT consulting companies specialize in outside IT services, rely on their own resources and charge a base fee to clients in exchange for the assurance of 24/7 IT services. IT firms offer more excellent quality and competency of IT services.

Before outsourcing It services, it is imperative to understand the role they will play and the benefits they bring in your company. The primary roles and benefits of an IT team in your business include:

– IT administrator: Oversee all IT issues in the company including online security.
– IT Adviser: Is the IT advisor of the company as well as its employees. Will educate employees on how to spot online security threats, how to use IT resources, etc.
– IT service Provider: Provides the company with comprehensive IT services that might include making sure the company’s network is fast and secure.

An external IT team will shake things up in the company and bring real change. Therefore, if you want nothing but the best, then outsourcing an IT team might be the best solution.

Read More

Impact Of Technologies In The Business

For several years now, we have been working hard on two particular and very beneficial topics for both companies and countries: productivity and competitiveness. The first one indicates how to do things most efficiently and effectively possible, and the second one tries to measure if doing the first one, we can compete for the clients in the market.

Computer technology is one of the most useful tools for improving productivity and competitiveness in companies. They offer the possibility of being much more efficient in the use of resources while allowing much greater flexibility and agility to meet increasingly changing customer requirements.

It is demonstrated that information and communication technologies influence productivity by contributing in the following areas:

Costs reduction

Increase in Sales

Improvements in profitability

Improvement in the satisfaction and loyalty of customers and suppliers

Make organizational structures more efficient

Facilitate staff training

Improve communication within the company

Improve communication with suppliers, government and other partners

This is just a short list. The impact of the use of ICT has even been measured by the World Bank, generating relative differences between companies that do not use ICT and those that do. The differences favor companies that use ICT more than three percentage points in sales increase and more than five percentage points in productivity improvement.

Read More

Know your Business Model First To achieve the best impact of Information Technology

To achieve the best impact of technologies in your business, it is essential to have clearly defined your business. Otherwise, it would be to invest time and money in technologies that had less impact. The business model is composed of three concrete elements.

The first element of the business model involves being very clear and understanding what is sold, what is offered and why money is earned. The company that manufactures Rolex watches is evident that what it provides is prestige or status, through a jewel (its product), and makes money by a reasonably wide margin between the cost of production and the sale price. A Rolex cannot be sold to whoever is looking for a watch with the sole purpose of knowing the time. The same must be clear to your company: what it sells (product/service, the item that is included in the invoice), what it offers (the value the customer receives when buying what you sell), and how he makes money

The second important element in the business model is customer knowledge. This knowledge covers a series of specific questions to be able to know what the client is, how the market is covered, what attracts the client and what makes it come back. This knowledge allows defining clear advertising strategies, prices, channels, service and other essential components of the client’s experience, achieving effectiveness and productivity in their attention.

The last element verifies the way in which what is sold is obtained or produced. Here you define supply chains, contacts with suppliers or internal production processes.

These three elements could be said to be as important as the mission and vision of the company, and sometimes I would say that they are more critical at the moment of identifying the application of technology to generate productivity and competitiveness. What is the model of your business?

Read More