How long does it take to get money out of an ATM? Some have been in countries where their access to their cash has been locked due to local strikes and economic crises. In those situations, the only thing worse than not having your money is having no idea how much time you have before you can use your cards again.
The gap is between the time when you need money and the time when you get it, and this is a big problem for banks, especially because they are slow to underwrite and approve your financing request. Businesses that require money, even those who have planned ahead, still need it quickly.
An important thing to note is that interest rates can be higher if your business needs money due to a crisis in your finances or lack of planning on your part.
Inflation is a measure of the rate of increase in the general level of prices of goods and services. The inflation rate is expressed as an annualized percentage change in a country's consumer price index (CPI) over a year or other period, such as a month or quarter. A related term, deflation, describes the opposite effect: when prices decrease over time instead of rising.
The interest rate is the amount charged by financial institutions for lending money; it is expressed as an annual percentage of the principal plus any outstanding interest which has not yet been paid off - also referred to as "the cost of borrowing money." Interest rates are affected by the inflation rate, among other factors.
Banks are risk-averse, which means they must wait for things to come together in your business and for smooth seas, before they can decide on whether you are worthy for a loan. They prefer to deal with bigger accounts, bigger companies, and large sums of money—not small or medium sized companies and their loan requests, which happens to be the majority of most businesses around the world. Banks are slow to make decisions, slow to approve applications and even slower still when it comes to releasing funds. If you're looking for cash right away, banks aren't your best bet. But don't worry there's another option!
Equity Capital
It’s not difficult to see why equity capital is such a valuable resource. The people who invest in companies have access to vast pools of money and connections, so they can help your business grow. If you want to make it big, venture capital is something worth considering.
However, if you are just starting out or running a small business with limited resources, this may not be the right option for you. Equity capital is hard to get because it’s such a competitive market. For investors (and therefore your company) to reap any benefits from getting financed by them, there must be some sort of potential return on their investment—or ROI—which means that many businesses will be rejected altogether due solely on their lack of growth potential without outside assistance or investment.
Debt Capital
When you are an operating company and are seeking capital to grow, debt is almost always the better option. Debt is non-dilutive, it is advanced based on the strength of your company’s balance sheet and P&L, and it relies heavily on the ongoing cashflows of the company. We prefer to work with clients seeking debt, as our partnerships run deep with over 200 institutional and alternative lenders in the North America.
Having the right debt partner means you have a funding source who will continue to come along on the ride with you and help you whenever you need it. It also means there is a level of accountability that is important when dealing with an external source of capital. Being accountable for the operations and financial strength of the business is good for both yourself as the operator, and the lender, as the financial partner.
No one can grow a company alone, under their own steam or bootstrapped forever, and debt capital is the best option for a company already in operation.
The UnBankers Finance Hub, a group on LinkedIn and found here: https://www.linkedin.com/groups/14107516/ has been created to help business people, entrepreneurs and corporations all looking for debt financing. Our direct partnerships with over 200+ lenders allow us the ability to deliver your business’ loan request directly to them, for quick decisioning and funding options. Join the “hub” today to learn more.
In the end, it's clear that getting a loan can be a difficult process. But with some planning, patience, and a strong advocate in your corner like The UnBankers, you can hopefully avoid many of the common pitfalls that people run into when trying to get money.