Business Funding to Start-Up Your Business

Today's fast-paced lifestyle and tough economic conditions are prompting people to try their best to go to places where they can some time off from their busy schedule. Stress and routine have drawn more people to places like the spa or the beauty salon to unwind and be pampered for a while. The increasing number of men and women who frequents the spa have has resulted in a high demand for the spa business. It is considered to be one of today's fastest growing businesses all over the world.

Starting a spa business is more or less the same as putting up most types of businesses. It needs careful planning and dedication from the owner. A thorough research and feasibility study needs to be done before the start up process. There are many things to consider and one important factor is the start-up capital since a spa requires a lot of equipment and other items in order to run your business properly and smoothly. It is important for you to know where to find and purchase appropriate tools for a spa business. Bear in mind that a spa is a place that caters to individuals who need for your services to be effect, so you need to ensure that you have the money to purchase modern and hi-tech spa equipment.

An organized and thorough study of the latest innovations in the spa industry will help you manage and handle your spa smoothly. The different factors needed in running a business like this will require continuous learning and well polished skills not only of your staff but also yours. Adequate financing or business funding is the one of the most important aspects that can affect any business.

Nowadays, there are local banks or financial organizations that are offering financial support to business owners in resolving difficulty as well as guide them through their business plans. They can provide financial loans to people who are planning to put up a small business. A business plan is considered as the core support of any business as it will serve as a guide in running and handling the business.

Finding the right location is also another important factor crucial to the success of your business. The establishment should be strategically situated in an area with heavy foot traffic, a business district where you can tap on executives, supervisors and yuppies as potential clients. It is also important to live up to your promises as advertised in order to gain loyal and continuous patronage. Establishing a good image and reputation counts a lot.

Good personal relationship with your clients and great customer service will definitely make your business soar high in no time. With enough business funding to support your new business's finances and needs will allow you to offer excellent spa services.
About this Author

Acquire Capital Solutions provides short-term and bridging finance in the South East Queensland area. With over 30 years of experience in the property and property finance area, Acquire Capital prides itself on providing business funding and personalized service far exceeding anything the banks or other institutions can offer.

For more information visit

Commercial Lending: Making Sure Your Needs Are Met

Getting a mortgage is an adventure. It does not matter if you are looking for a mortgage for a home or for a business venture the basic same rules apply. It is tough to enter into a large financial agreement with a lender that is often a complete stranger to you and your needs. The problem is that you have specific needs that your commercial lending company needs to meet in order for you to feel confident that it is the right deal for your company.

There are some basic tips you will want to follow and things to think about as you apply for commercial lending. Not only are you looking for a quality lender, low interest rate and fair terms for your loan needs. Finding this miracle lender is the tricky part and it will take time. Also, just because you have found someone do deal with your lending needs for this transaction don't assume that with every aspect of business lending that they will be your go to lender. You will need to stay up to date on your lending needs too and not rely on someone else completely.

First speak to a mortgage advisor. It is important that a party that is not invested in you or a lender look at your situation impartially to advise you. A mortgage advisor is an individual who is paid to help you find a great deal on a commercial loan. Because they don't have any connection to a lender they will look for the best deal within your business sector and can also navigate better because they are professionals in the industry.

Mortgage brokers can also be useful because they often specialize in a certain type of lending such as commercial lending. They will be able to explain their specialty inside and out. They can give detailed information about lenders and different mortgages available which is all information that will benefit your lending needs.

Remember to leave yourself plenty of leeway in finding a mortgage for a commercial venture. Residential mortgages take a while and much paperwork is needed to complete them but it is nothing in comparison to a commercial loan. If you go with a mortgage broker or advisor they may be able to help streamline the process helping the speed at which your loan goes through.

It is imperative that when working with a professional broker or advisor that they are independent of a lender. This way you know they are really scoping out the industries best deal for you and not favoring a lender because of ties to that company.

It is possible to arrange for a commercial loan on your own. Be prepared for leg work and ask friends and business contacts for referrals. Often you're the financial people in your life can assist you with contacts. Your accountant, financial advisor and other business owners can be your best allies when looking into a commercial loan. Don't forget about your banking institution also. They can provide services to help you with finding a commercial loan or pointing you in the direction you should be looking.

You should use all online tools available to you. Scope out forums and blogs that will help you understand key elements and terms that lenders are throwing at you. It is important to be knowledgeable and well educated when you enter into an agreement such as one with the magnitude of a commercial loan. It will affect you and your business for years to come so make sure it is a best fit for all parties involved.
About this Author

If you have enjoyed this article on commercial lending from Kevin Germain at CPS visit our website today where you will find useful information on commercial lending.

Bank Loans Verse Private Lender Loans

So, what is better; a business loan from your bank or a business loan from a private lender?

The answer is simply the one loan that you can get approved for.

But every business owner wants a bank loan. In fact, many business owners think that their bank is the only place they can get a business loan. But that is far from the truth.

Everyone wants a bank loan. Why? It is usually because bank interest rates can be lower.

Why do bank loans offer lower rates?

Banks typically have a lower cost of funds than other lenders. Depositors (their retail customers) keep a lot of money in their checking and savings accounts. Thus, banks have easy access to those funds to lend out. And, if banks don't pay interest for those deposits or pay very little interest like they do today (under ½ percent) - then those funds are very cheap for the bank to use.

Plus, all banks can access federal funds. And, right now the federal funds rate has been stuck around 0.25% (a quarter of 1%) - very cheap considering that it is usually around 4% or 6% and has been as high as 19%.

Private lenders on the other hand either have to get funds from investors who are looking for decent returns or from other banks and financial institutions who lend these private lenders funds at higher rates than it costs them to acquire that money.

Either of which raises private lender's cost of funds which in turns gets passed on in their loan rates.

Let's look at an example:

A bank needs to earn a spread on their loans of say 6% to cover the bank's direct expenses and overhead costs (their cost of being in business).

If they can acquire funds at 0.25% then they can lend them out at 6.25% and still earn their spread.

A private lender might need to earn a spread of 4% to cover its operating costs. But, its cost for the funds it lends out could be 6% or more to either repay the bank that lent them that money or to repay investors.

If the private lender's cost of funds are 6% and its needs to earn a spread of 4% - it has to charge 10% at a minimum or go out of business.

Thus, it is easy to see why everyone wants a bank loan as opposed to a private lender loans.

But, banks are also opportunistic.

While banks can lend out funds at lower rates, they hardly do. Here's why:

1) Banks see that their main competition (these private lenders) have to charge 10% or more - from our example. Thus, banks know that all they have to do is be below that figure to win your business.

Thus, banks can charge 9% or 9.5% and still beat the competition.

2) Banks have other ways to make money. Thus, if you don't want to pay their high rates, they really don't care all that much. They can still earn a ton of revenue from banking fees or from taking those cheap funds and investing them to earn their 6% or more (investments in stocks and bonds or through acquisitions). Thus, they really don't need to fund your business loan.

3) Banks have stiff regulations that pretty much forces them not to lend to new or small, growing businesses. These regulations are in place to protect their depositor's money but also tie their hands when making loans (things like time in business, high credit scores, high cash flow requirements and low debt-to-income ratios).

Plus, banks add a lot of other costs to their loans - including fees, reporting requirements, covenants, etc. that are not included in their rates but make the overall cost of their loans higher.

Private lenders, alternatively, don't have all those restrictions or alternative ways to generate revenue (beside fees which only happen when they close a loan). In fact, they are usually in business only to make loans.

Thus, private lenders tend to be easier to get approved by.

Kind of a double-edged sword. Cheap money but hard to get on one hand and eary to get loans but higher rates on the other.

However, going back to the original questions, which is better? The answer still remains the loan that you can actually get; but it only remains true while you can't get the other.

If you don't qualify for a bank loan, make it your goal to grow your business to the point that you qualify for bank funding (you might not actually need it when you can qualify for it). But, in the mean time, if all you can get approved for is a private lender loan, then by all means; knowing that it is only temporary as your business grows.

Two things to remember here:

1) The difference between 10% and 6% on a short-term loan (say under three years) is really not that much given the grand scheme of growing your business.

2) Private loans are much better then not growing your business at all or losing your business altogether. As long as the use of those funds will return more than that loan costs - your business is really not losing anything.

Example: If you have an opportunity to earn $10,000 above the principal of the loan but can't get a bank loan - do you just let the opportunity die or do you take the private loan and only realize say $9,000 in profits due to the higher interest rate?

You do what you have to do until you qualify for something better.

Managing To Find Small Business Loans

Due to the state of the economy in recent years it has been quite difficult to get small business loans as banks have tightened up their criteria for how you qualify. This has caused a number of problems for businesses as they have ended up with cash flow problems that could have been avoided if they had only been granted this additional funding to get them through a tough time.

However the outcome of this is that other types of small business loans have appeared and these can be applied for even if the person or businesses have less than perfect credit. This alone can be responsible for helping to stimulate the economy due to the fact businesses can once again get some kind of financial help.

This relatively new method involves merchant cash advances and they are supplied by several companies which does mean you have some options available to you. It is therefore a case of spending some time just going through each one to see who is offering the best rates as of course they shall change from company to company.

This form of loan works in a different way in that it is tied in with them taking a percentage of your future sales rather than paying back a set amount every month. This does mean they tend to focus on certain types of businesses with restaurants and shops being a real favorite amongst companies offering this kind of financial help.

One bonus side of this however is that if you have a bad month then you are going to have to pay out less instead of struggling to cover this particular bill. This does relieve some stress as you will not have them knocking on your door and threatening to close you down as they would then be unable to get any money back at all.

The rates you pay are higher than what you would find with a bank and different companies do have different top and bottom figures about what they shall lend. This is why you do need to look around as some companies offer rates that work out to almost 200% but if you have a bad credit rating then this is the price you need to pay.

You should therefore spend a bit of time trying to get feedback from other businesses as to whether or not a company was good or bad to deal with. As they are taking a percentage of your future earnings there is no way you should go into this kind of deal blind as it makes it harder to then budget accordingly.

So if you are unable to get small business loans then look into the possibility of getting a merchant cash advance as an alternative. The rates are higher than a loan but if you have no other choice then it is at least an option to think about but do remember that it is tied in with your future earnings and budget for this change in your plan.
About this Author

Business Loan Overview

The most appropriate use of a business loan is if you have a number of assets to purchase immediately whether you are starting a new business or expanding an existing one. If you do not need the entire amount of capital that you are seeking at the onset of operations then you may be better of seeking to apply for a business line of credit. However, there can be many benefits of receiving all of the funding that you need in one lump sum rather than drawing down a credit line.

Foremost, a business loan can rarely be revoked by the bank or financial institution that provides you with this debt. This is primarily due to the fact that when you apply for this type of funding, it will be used almost immediately after you receive the capital. With a revolving line of credit, a bank can terminate their agreement should economic or business trends change. As such, and although you will be paying a higher amount of interest on the business loan, you may be able to benefit by receiving all of the debt capital that you need in one shot.

Due to the recent changes in legislation and the ways that banks conduct business, you can expect that a substantial amount of your business loan will not be disbursed directly to you. Instead, you will most likely need to submit invoices from vendors that you are purchasing goods from in order to launch your business venture. This loan covenant typically applies to purchases that are in excess of $10,000 in value. The primary reason why banks and financial institutions have instituted these new rules is so that they can place a direct lien on any major piece of equipment or property that are you seeking to purchase. As such, this provides lending companies with a much greater ability to recoup assets should your business not go as planned.

When you are applying for a business loan, it is imperative that you have a top notch credit score coupled with assets that you can use as collateral for this debt. Generally, with the assets that you intend to purchase, you can hypothecate up to 80% of the planned purchases as collateral. As such, you and your accountant should produce a substantial description of the exact assets that will be purchased with the financing that you are seeking. In order to further your goal of receiving funding, you may want to include direct invoices from vendors that you will work with as you progress through your business operations.

In conclusion, a business loan is superb for large scale purchases. If you have ongoing capital needs then you may want to look into revolving credit programs that are issued by your local bank. Additionally, in order to keep interest rates low, you should work with your regional Small Business Administration office to see whether or not you can receive a federal government guarantee for your credit request.