Information for Business Owners

A business loan provides financial aid to business of all sizes (i.e. small businesses, medium-sized businesses or start-up businesses). It is ideal for business owners who need funding to enhance or expand their business. When you need a loan for your business, you must adopt a strategic approach. Cautious planning is necessary for ensuring success in obtaining business loans.

Business Plan

When you are considering applying for a business loan, it is important for you to take enough time to create a convincing and detailed business plan. Your business plan should include information, which will assist your finance broker as well as the lender/credit provider in providing you with the right type of finance and advice. Here is a list of information you should include in your business plan:

>> Your business structure

>> The purpose and goals of your business

>> Your past and future plans for your business

>> The profit and loss projections and cash flow forecasts of your business

>> Your marketing strategy (i.e. the products or services your business provides)

It is also important to state in your business plan the specific purpose for which you want to use a business loan.

Decisions to Make

Once you have assessed your needs for a business loan, you should investigate which finance products suit your needs for a business loan as each loan has varying features for you to choose. To help with this process, here is a list of things to consider and which you can discuss with your finance broker:

>> The loan amount required

>> The loan term (i.e. the period in which the loan will need to be repaid)

>> Interest rate type and repayments (i.e. fixed or variable)

>> Loan fees, and

>> Loan security (i.e. the type of security offered by you)

Finance Products

There is a variety of business loans available to choose from. Here is a brief summary of common business loan products specifically designed by lenders/credit providers for business owners, which can assist your individual situation as a business owner:

Commercial Bill Facility

A commercial bill (also called a bank bill or bill of exchange) is a flexible credit facility that can give your business a short-term or long-term injection of cash. The finance provided by the commercial bill can help your business in the event that you may need to solve an unexpected or urgent problem, and you do not have the required cash flow. You agree to pay back the face value of the commercial bill plus interest to the lender/credit provider on a specific maturity date.

Overdraft Facility

The purpose of establishing an overdraft facility is to provide working capital for your business in the short-term, before receiving income. An overdraft facility should not be used for capital purchase or long-term financing needs. The overdraft is a normal trading account facility for your business, whereby the lender/credit provider permits you to use or withdraw more than you have in the trading account. But, only up to an agreed amount and any negative balances typically need to be repaid within a month.

Line of Credit

A line of credit (also called an equity loan) can provide access to funds by allowing you to draw an account balance up to an approved limit. The loans are designed as a long-term debt facility and are usually secured by a registered mortgage over a property.

Fully Drawn Advance

This is a term loan with a scheduled principal and interest repayment program. The loan provides access to funds upfront, which can be used for funding long-term investments that will expand the capacity of your business, such as purchasing a new business or even purchasing equipment. Fully drawn advance loans are usually secured by a registered mortgage over a residential or commercial property or a business asset.

Short-Term Loan

A short-term loan can provide short-term funding needs for your business. You can take out a short-term loan if you want to take advantage of a very quick financial opportunity or to help you get out of a financial cash flow crisis. The loan offers a fixed sum advance and requires a periodical interest charge to be paid by you. Short-term loans typically require a security to be provided.

Business Equipment Finance

If you decide to expand your business operations and take benefits of potential tax advantages, you should consider taking out business equipment finance, as the finance arrangement allows you to buy, lease or hire a new vehicle or specialised equipment (e.g. cars, trucks, forklifts, printing, computing, medical and office equipment as well as plant equipment and machinery). Typical finance arrangements to consider for business equipment finance are asset lease, commercial hire purchase, chattel mortgage or equipment rental.

Choosing a Business Name to Make Your Business Successful

Creating a Unique Name to Brand Your Business

One of the most important steps in business planning is choosing a name in which to operate under. The challenges with choosing a name can be difficult to overcome, such as deciding on a unique name, finding a name that reflects the business and its purpose well, as well as choosing a name that will easily transition to online use and social media. Once these challenges have been conquered, the most important step in the naming process is registering it with the proper department of local government as well as copyrighting or trademarking the name in order to protect the branding of the business long-term.

Important Considerations to Make When Choosing a Business Name

More often than not, small businesses start out as an individual’s freelancing or solo efforts. When this is the case, using the individual’s personal name is acceptable and does not need to be registered with the government. But, when these small operations begin to grow and working under a personal name is no longer feasible, it is time to consider creating a name and having the business branch off from the owner’s personal name. Giving a business any old name is usually not the best option – there are many things an owner should consider when choosing a proper name for his or her organization.

Some of the main points that business owners should consider when choosing an acceptable name are choosing a name that reflects the business and its offerings well, how the name will look both in print and on the Web, what feelings the name may evoke in consumers and business partners, as well as if the name has already been trademarked or claimed by another organization – violating trademarks can lead to huge legal ramifications for small businesses. Being able to meet these points with confidence will help an owner choose the appropriate name and build the business’s branding overall.

Importance of Registering a Business’s Name with Local and State Government

Once the business’s new name has been created, it may be pertinent to register the name with local and state government agencies. Registering the business under a new name alerts the government that business is being done under what is known as a “Doing Business As” or DBA name. After this registration process is complete, some business owners choose to also trademark the business’s name. Trademarking protects the business’s “Doing Business As” name and branding, guaranteeing that another organization will not use the same name and helping to keep the image of the business clear.

Is Your Business’s Name Web Ready?

Just as the business’s name is important in print, it is also important for branding on the Web and through social media. When considering a name, do research to determine if the same domain name is available. Also, search social media such as Facebook and Twitter to see if there is another organization with the same or similar name. If the proposed business name is available on social media, claim the name early in the naming process – even if the name changes down the line, many social media sites will allow business owners to edit and change the name of the business at any point.

How Can I Sell My Business Fast

Are you a business owner that’s interested in selling your business? If so, I can only imagine one of the main questions at the top of your mind is, how can I sell my business fast? That’s a very valid question and one that needs to be answered. After all, you’ve spent years building up your business and you’re ready to cash out and you want to do it as quickly as possible. I get that, no issues there.

Let’s first start by saying, some brokers will tell you, it will take them 1 year. yup, 12 long months to sell a business. I mean really? That’s a long time and there is not 1 business owner that is going to wait one year to sell their business. Brokers will try to “force” you into signing a year long agreement that states you give them the right to make an attempt to sell their business within a 1 year time period.

That’s a really long time. As a business broker, I would lose total interest trying to sell a business for a year. The name of the game is to get the business sold and get it sold fast. I would not be surprised if in a few years business brokers will tell their clients that it’s going to take 18 months or even a lifetime agreement.

The reason why it takes a long time to sell a business is because business brokers allow themselves a long to sell the business. Give someone 6 months to do something and they’ll take every bit of that 6 months to do it. If brokers would give themselves 90 days, guess how long it would take to sell? Yes, you guessed it. 90 days.

When you decide to sell your business, make sure, your business is taken to the marketplace immediately. Make sure the business broker is marketing the business for sale everyday. Make sure the broker has a consistent flow of business buyers in addition to providing to with weekly updates as it relates to the buyers that the broker has met with and presented your business to.

By now you’re probably wondering what does this have to do with the original question. Just hold tight, we’re going to get to that.

So, to answer the question, the answer is, it depends. Yup, it depends on the broker
that you hire. When selecting a business broker, you clearly want to ask them how long is it going to take to sell my business and what is their process for marketing your business.

There has to be an active marketing plan in place. There is no one size fits all to selling a business. If you ant to sell your business as fast as possible, you must first start with finding a business broker that is willing to sign a 90 day selling agreement.