Are you a Small Business with Big Plans? If so, chances are you are considering how to finance your next phase of development. The taking of a loan marks an important event in the life of a company; sometimes it is necessary to survive a temporary setback, but hopefully it means you have a plan to launch a new phase of growth in your development. Either way, the decision to seek financing represents a pivotal moment for your business.
It’s true that many banks have stopped lending to Small Businesses during this time, and the well-intended government loan programs for Small Businesses have turned out to be an unreliable process for many. Thankfully many commercial lenders are stepping up to fill the void. So whether you apply during a pandemic or afterwards, during normal (or new normal) times, you’ll find it much easier and faster to apply for a funding through ZING.
Have you exhausted your opportunities for a government loan and are you trying to decide between a bank or a commercial lender? If so, here are 4 things to consider to help you navigate the options:
1: Have a clear purpose for your financing
Banks are notoriously nosy about your plans for spending your loan proceeds. It seems intrusive to us, but they will require a well-thought-out and well-documented purpose, such as supporting working capital requirements, investing in inventory, retrofitting for social distancing requirements, expanding your business, or purchasing a rival company. When you apply to a bank, you need to lay out quantitatively how the loan will let your business survive and grow. The bank may want to collect multiple years’ worth of tax returns and audited financial statements. Fulfilling a bank’s demands for comprehensive information is expensive and arduous. Contrast this to a commercial lender, where you are trusted to spend the loan proceeds in your company’s best interests. After all, you know more about your business than does anyone else. We wouldn’t presume to substitute our judgement for yours, and we don’t make you submit reams of documentation. Like a bank, ZING Funding will ask about the purpose of the loan, but it’s mainly to help our Business Growth Advisors to tailor a solution that works best for you.
2: Decide how hard you’re willing to submit an application
Part of a bank’s underwriting scheme is to review all of your company books and records. That means you’ll have to cough up balance sheets, income statements past and current, tax returns and other relevant documents. Bank loan procedures may devolve into a virtual audit of your expenditures and business strategies. As far as a bank’s loan committee is concerned, all topics are fair game, and any one answer can open up various other avenues of time-consuming interrogation. Naturally, a bank will analyze your financial rations to see how you rank against your competition. On the other hand, ZING looks only at your time in business (at least six months), your personal credit score (above 500), and your monthly revenues (above $10,000). Meeting these requirements puts you on the fast track to financing.
3: Understand your debt service capacity
Naturally, any lender wants to know that it will be able to collect on its loans. The difference between banks and commercial lenders is how much reassurance they need. Banks will drill in on how you manage cash and adhere to your budgets. They may issue you a recourse loan requiring you to pledge collateral in the form of business and/or personal property and other assets. A popular approach is to measure your average bank balance and the number of deposits your business makes each month. ZING takes a different approach toward lending. One of our loan programs, Flexible Funding, conditions the loan amount and repayment terms upon your outstanding receivables or future credit card sales. You don’t sell off your receivables, thereby avoiding the high factoring fees.
4: Explore all your financing options
Sometimes, a plain-vanilla term loan is not your best option. While a bank might be constrained in the types of financing it can offer, ZING gives you wider variety of choices beyond term loans:
- Our Flexible Funding program offers financing of up to $5 million based on your future cash inflows rather than your deposit history.
- Another option is ZING’s Line of Credit of up to $500,000: with this option, you pay interest only for the amount of capital you need when you need it, in monthly or weekly payment periods.
- Make sure you explore all the options and choose a financing structure that works for your business.
We know that Small Business will lead the next growth phase in our economy, and we wish you the best of luck in playing an important role. If you are finding that qualifying for a bank is taking too long and costing you too much to prepare, we invite you to explore your options with ZING Funding. You might qualify to get a traditional Fixed Term Loan, accessible Line of Credit or Flex Funding cash quickly and easily. We invite any Small Business with Big Plans to apply for funding online in under 3 minutes or contact us for a free, no-obligation consultation with one of our Business Growth Advisors. We could be funding your plans within 1-2 business days, letting you get back to the important task of growing your business!
How ZING can help Small Business lead the way
ZING is a new idea that came about during a pandemic. With the global economy facing its biggest setback in decades, we watched as the Small Businesses that drive the US economy struggled to survive and access the government loans that were intended to help them. Many business owners spent days navigating the traditional loans application process only to find out that priority was given to bigger existing customers. ZING’s mission was born: bring flexible and responsible funding options directly to Small Business owners, make it quick and easy to do business with us, and get them back to growing their business as soon as possible.