Christian Business Bank Loan
A Christian business bank loan can come in a variety of forms and options provided by the lending institution or their relationships with brokerages. They are typically offered to larger corporations that need larger amounts of money for operations. Financing will require an extensive proposal plan with a new and documented statement of success. In times past, this funding could only be offered by a bank or credit union. Today there are many governmental programs and private organizations offering assistance to entrepreneurs around the world. Choosing the best program should begin with seeking God's guidance. "And I say unto you, Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you" (Luke 11:9).
It is a good idea to search for organizations that have special programs that coincide with the firm's agenda. Institutions that deal in small funding would be inappropriate to apply for if the amount requested is millions of dollars. SBA lenders allow for a certain number of financial agreements to be received by small establishments. The SBA guarantees a percentage of the funds set aside requiring a pre-authorization before the funds can be distributed. When researching the services they have to offer, it is important to note what they can do for obtaining monies . They simply make a guarantee to the lender in the case of default.
The SBA may provide resources for contacting a plethora of institutions who offer funding for small and upcoming companies. The best chances a borrower has of securing any cash comes with franchise ownership. Banks are more ready to provide money for a franchise than for an unknown start up. A franchise will have already established methods for success. This success is documented in their firm's statements, which are required if the person would like to receive funding. Fictitious statements as required for start ups are just that, fictitious. While the method may sound good on paper, there is no documentation to back it up and it is therefore considered a risk.
Ventures that involve a tremendous risk will usually be denied without ample collateral being pledged as security. Even if there is collateral and approved; the interest rate may skyrocket to immeasurable lengths. Banks do not like to risk their money in faulty investments. They only allow for a .05% default rate. When their default rate increases beyond that .05%, they tighten up their practices and no longer take on any risky ventures, with or without the security of collateral. It is wise to develop an effective plan before applying.
Brokers are typically employed in mortgage offices or lending institutions such as credit unions and offer the applicant options. They are part of a "brokerage", including all the people that make up the brokerage company. There are many different sources of financial assistance for those that are interested in outside financing. Advances typically come in three primary forms; short term, intermediate term, and long term. Before an applicant approaches a brokerage, they should have a clear understanding of what the funds will be used for and how to best present the information. Gathering information and gaining a good deal of knowledge on this process is a great way to begin to seek funding. "Hear instruction, and be wise, and refuse it not." (Proverbs 8:33).
Representatives from the institution will review plans and portfolios on a daily basis, seeking the best ones to invest their money in. They are primarily concerned with the risk involved in backing a venture, and the better prepared the plan is, the more likely for approval. Most cash advances require some type of collateral, whether a borrowers home equity, or the company's purchase of land or property. Collateral that can be liquidated for cash is usually the determining factor in whether or not a funding will be approved. Property is the most common type of collateral used to achieve approval.
Short term cash offered from loan brokers provide money, to start operations. These funds are usually granted for one year or less, and have a high interest rate. The intermediate term amount can help start a venture, purchase equipment, and cover expenses. These are in the one year to three year range. Long term funds offered assist in the start up process and can be used to purchase equipment, furniture fixtures, and commercial mortgages. These are three to seven years in length and repayment is made in periodic installments, not standard monthly payments.
Information that applicants should include on their plans include; 1) the purpose of the cash required, 2) the specific amount required, 3) a management profile, 4) an overview of the market including projected customer base and competition, and 5) personal and company statements with collateral to secure the funding. Sometimes limited information is required, but don't count on it because they employees have their job on the line if you default.
Christian Business Micro LoanThe lending is especially for the start-up or to develop a newly established for-profit or for example a non-profit child care center, which is made available by the government. Local non-profit lenders are in charge of setting their own terms and interest rates. The non-profit people, called intermediaries, operate independently of federal oversight to a certain degree, and generally require collateral and the personal guarantee of the owner. This collateral is generally the equipment or other assets. To locate an intermediary lender, look in the telephone book under the U.S. Government.
The amount provided by this funding is to be used for the initial money to set up a new organization's expenses - working capital, equipment, furniture, inventory and supplies, but is not to be used as a down payment or to purchase real estate. Small funding has a maximum of $35,000 with the average amount being $10,500. The fees are at the lenders' discretion but are also based upon their cost to receive the Treasury funds which is tied to the current rates of Treasury Bills. Current rates vary from 5-7% in the United States, but foreign countries are subject to rates that exceed 20% due to the subjective of their intermediaries. The government does require that a firm has a maximum term of six years, however, this will be set by the giver and can be for a shorter period depending on the financed amount and other terms established at signing.
Training to use this funding source is available and other organizations whose goal is to see small firms succeed in their communities. This training includes management of capital, inventory, advertising, customer service, forecasting and cash flow, marketing among other topics. This training is meant to provide for leadership and communication skills that will help the small organization to be successful, which in turn, makes the community more successful. The length of the funding training program varies with each session offered, but a typical session will last ten weeks.
Temporary cash is an excellent means for entrepreneurs to start-up a company from scratch. But they must prove that they are ready to project themselves in a solid, manner and are willing to meet the guidelines of the government to prove that stability. Biblical advice from Paul to Timothy would be well heeded: "Study to shew thyself approved unto God, a workman that needeth not to be ashamed, rightly dividing the word of truth." (2 Timothy 2:15)
Startup cash advances are one of the financing options institutions provide entrepreneurs. They provide the finances to prospective company owners to buy equipment to run a company, the money to rent office space, or buy property and build a structure for manufacturing. Monies can be used to pay employee salaries, advertise the company, buy inventory, etc.
Borrowers should be diligent as they prepare themselves to start a corporation and apply for cash . God says this about diligent individuals: "Seest thou a man diligent in his business? He shall stand before kings; he shall not stand before mean men." (Proverbs 22:29). Also, God states in His word this: "He becometh poor that dealeth with a slack hand. But the hand of the diligent maketh rich." (Proverbs 10:14). Borrowers should accept the advice of God's Word and be diligent in their pursuits.
Before applying for funds, applicants will need to incorporate their company according to the state's legislature where they will be located. Each state has different rules and regulations for the different types of ownership structures. Prior to applying the start up applicants need to ensure that any prospective company owners have the proper vocational licenses to operate the type of organization they wish to start. For example, if potential owners want to begin and operate a home for mentally challenged adults in Michigan, they will need at least one year of college classes, one year of related experience, current CPR and First Aid training, and specific three week training. If applicants are not sure what the rules and regulations are, they should contact their state department for more information. The state departments might even be able to give advice on a variety of related issues that might be helpful.
Obtaining cash is a lengthier process then a home mortgage, refinancing, or other types of lending. During the application process the company's partners will be scrutinized not only on a financial level but they will inquire about their education, experience, commitment to the effort, etc. Many lending institutions would like the Christian applicant to have progressive management experienced in the field of their prospective company. One of the biggest hurdles is for applicants to present themselves as experienced and educated professionals in their field. Lending institutions want their applicants to be successful because successful people will be able to repay the money. All partners, when applying, need to convince the lending institution that they can repay.