On December 17, 2008, the prime rate in the United States was dropped from 4.00% to 3.25%, the level that it currently stands at right now. The lower interest rate was initiated by the Federal Reserve to stimulate lending to individuals and businesses, the first salvo in the war to combat economic recession. On the surface, it appears to have made very little difference. The economy in the United States still declined and unemployment rose to a record high rate of over 10% in some states. Despite that, there’s no way of knowing how much worse things would be, were it not for the lower prime rate. Today, as the nation crawls out from the hole it’s been in, businesses are beginning to look for funding to expand or in some cases just to stay afloat.
There is a process involved in getting this funding, requiring a step by step approach and some knowledge of exactly how to get a business loan. That process begins with an evaluation of needs, continues with an examination of loans and funding options available, and hopefully culminates in a business loan which will help your company achieve its goals. It’s not as simple as it once was, when all you had to do was show up at your bank and put some collateral up to get a loan. Credit score is now a factor, as is credit and payment history. The nature and success rate of businesses in your industry will also be taken into account. After what was a horrific three year period for banks and lending institutions, you’re not going to be approved for a business loan without some heavy duty footwork on your part.
Evaluating Your Needs for a Business Loan
Regardless of the state of the economy, all entrepreneurs, either new at their trade or old hats in business, when seeking financing, tend to get caught up in haggling over the lowest possible interest rate that they can achieve.
Who can blame them? Cost savings – especially while we are still experiencing recession like economic symptoms – may be the key to their business’s survival and their personal financial future.
But, sometimes, merely basing a financing decision on just its cost (its interest rate in this case) alone can be even more detrimental. All business decisions should be taken in the whole – with both benefits and costs consider simultaneously – especially with business loans.
When you’re planning to start or expand a business, one of the important requisites for it to happen is to have enough funding to finance the needs of your business. This will include financing materials and equipments, salary for your employees and even advertising purposes.
To be able to get the need amount of cash to fuel their business plans, businessmen often get a business loan. This can help jump-start their business from the drawing board to the real thing. A loan can provide you with your needed cash for you to start and operate your business. However, taking a loan from the bank and other lending firms will often require you to present your credit ratings. When this happens, people having bad credit history often find it hard, if not impossible to get an approval.
Although you may not have a great credit rating, you still have a chance of getting a business loan to get the cash that you need. This is by getting a bad credit business loan. This loan can allow you to have the money you need for your business without your credit rating being scrutinized. This is mostly offered by lending companies that you can find online. Through it, you can transform your dreams into a reality.