Are you looking up to set a small-scale business? Do you have a fantastic idea that you want to capitalize on right away but don’t have enough funds? In today’s time, the expenses are at an all-time high, and although running the right kind of business can be very profitable, you will need to invest some capital. You will need to look at your options like applying for small business loans in New York.
Why do you need a business loan in New York?
No matter what the idea for the business might be, it will require you to put down a certain amount of money for you to start it. If you are planning to set up your business in a city like New York, then you will probably need a loan because we all know how expensive New York could be.
You will need to apply for small business loans in New York so that you can pay for the place you work from and the employees could be paid on time as well. You may also need a loan because you might want to expand your already existing business. There might be an excellent opportunity at hand that you would want to grasp.
Some people also need capital because they might be struggling to make ends meet. Sometimes, payments get stuck and take a long time to clear; meanwhile, the business needs enough capital to pay the employees as well as to keep the business running.
Small business loans in New York
It can be a little bit tricky to get your loan approved due to the condition of the economy. But, that does not mean that you should quit trying, you have to be smart about it. The first thing that the lenders will look at is the history of your credit. They will also look at how long you have been running the business for, what is your background in education, and also what your business is about. Another factor that plays a significant role in the approval of the loan is how feasible it would be.
Here are some of the things that you will need to do.
Finances in order
The bank will need to know that you can repay them. For them to know this, they will do an extensive study of your company’s financial records. Some of the things that they will check are the income statements, balance sheets, and debt-to-equity ratio.
Your financial background will also be checked, like the tax returns, credit card score, and your ability and suitability to run the business. This means that all your previous work experiences will also be counted.
Like you’d do your homework and study before a big test, you will have to arrange your finances and come up with a good business plan. The plans will also show the cash-flow projections. Another thing that you will have to focus on is getting the right lender. You need to find a lender that would give you low rates and services that would benefit you.
MCA for small businesses in New York
If you are looking for small business loans in New York, then Merchant Cash Advance is something that you should be looking at. It has only been around for a few years, but it has undoubtedly revolutionized how the whole thing worked. MCA is not a loan, but it is more of an advance. It is known as an advance payment against the future income that the company is going to make. The percentage may be anywhere between 5%-20%. It is based on how significant the advance is. The term for which the payment is set could be anywhere from 90 days to 18 months.
The figure that you can borrow depends on the average credit card sales. Your receipts from the past three to six months will be evaluated to see what amount you would be eligible for.
Comparison between small business loans in New York and MCA
Mentioned below are some of the comparisons of MCA with that of small business loans in New York.
Bad credit doesn’t matter
A rocky credit history could really be bad news if you were trying to get a loan. However, it doesn’t really matter that much when it comes to Merchant Cash Advance. You would be eligible to get it even with a credit score of less than 200.
- Approval rate
A lot of people apply for small business loans in New York, which means that a lot of people get rejected and the process is very thorough and strict. They need extensive documents and the contracts are very complicated. But, in the case of MCA, it is more personal. The approval rate for MCA is much higher.
Collateral or credit
When you apply for small business loans in New York then you would require some sort of collateral. But, since MCA is basically an advance payment and more like a sales transaction. There is no such requirement.
When you apply for small business loans in New York or anywhere else for that matter, you should keep a couple of weeks in hand as it takes quite a bit of time to know if your application was accepted or not whereas, in the case of MCA, it takes a couple of days maximum.
The MCA payback is revenue-based. It is a straightforward and uncomplicated process. This means that the time your business is doing well, you will pay more and if your business is slow, you will pay accordingly.
When you compare small business loans in New York with that of an MCA, then MCA comes out as the clear winner. Although, it is more of a personal choice and what better suits the need of the person at that moment in time. No matter, which option you choose. Make sure that you do thorough research before you make any commitment, so you don’t end up regretting it later on in life.