Business Loans Alabama

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Our Business Loan Products

Business Term Loan

Equipment Financing

Franchise Funding

SBA Loan

Line of Credit

Business Term Loan

Equipment Financing

Franchise Funding

SBA Loan

Line of Credit

Who Can Get Business Loans in Alabama?

The following business entities can apply for a loan in Alabama

Self-employed individuals
Proprietors
Partnership firms
Corporations
LLCs
Private limited companies involved in the business of manufacturing
Traders

What to Do Before Applying for Business Loans In Alabama

Prepare financial statements.

You should be able to provide any financial statements from the past several years. Make sure you have a clear strategy for achieving your financial goals. Show projected numbers so that the lender knows where you’re going and how you intend to get there. Include your financial records, including your cash flow statement, annual profit and loss statement (P&L), bank balances for the last three to five years, and projections for the next few years.

State the number of funds you need and their purpose.

At this point, you should know what you want to achieve with a business loan and how much you will need to be successful. Figure out what pieces of equipment you’ll need along with other items that you plan to purchase with the business loan proceeds. Make sure you research the best price for each item, showing the lender that you are a professional and adding credibility to your business.

Make sure your credit file is in good standing.

Lenders will consider your credit history when deciding whether to lend you money. Before applying for Alabama business loans, you should check your credit history, specifically when your business has not been operating long enough to establish its own. If your credit report is weak, you might need to wait until things improve before applying for a business loan. The lender may require proof of income from previous years, so you should consider keeping copies of these documents handy.

Understand what the loan will cost you overall.

Learn the type of business loan programs Alabama lenders offer and research their terms to get an idea of what your monthly payments may be. Make sure to look for competitive rates and terms so you’ll know how much the loan will cost you. You should include all of this information in your financial reports. Before choosing any particular business loan offer, understand the terms and conditions and be ready to prove that you’re a good investment.

5 Things to Know About Alabama Business Loans

Before starting an application for any loan, there are certain things that every Alabama business owner should be aware of before seeking access to capital:

1. All business loans are not the same

There are many different types of loan programs available for business funding in Alabama. Each lender is different and will have its policies for business lending services. Different lenders use different formulas when determining loan rates and repayment periods. Each will offer different amounts of money at different interest rates and credit score requirements. Finding the right Alabama business loan option for you can be difficult because there are many different types of loans in the marketplace. The best way to approach a loan is to focus on what you need and find a lender who offers business loans for that purpose..

2. Being prepared helps with getting approved

Instead of arriving at a branch in Alabama and hoping for the best, complete the research to understand the lender’s criteria for approving your business loan. Be prepared to advocate for your business and convey why the bank should approve your loan application.

A good business plan will show you are prepared and serious about your business. You could include how the proceeds from a loan would allow you to spend more time growing your business. Any action that could help lenders feel confident to make your payments on time is worth taking. If you are meeting with an Alabama banker, plan to dress professionally and practice your pitch in real life and by using emails before applying.

3. Beware of scams

Online lenders provide more Alabama business owners with the ability to secure funding, but can also subject them to risks. Any online service can pose the risk of being scammed by an imposter. Don’t forget to read the small details. Be careful not to miss any of these sneaky extras. Here at WeFundItNow.com, we partner with 5 Star Funding Group, LLC. Our lender is knowledgeable and credible and will do everything possible to make sure all your questions or concerns will be addressed. We are here to help make sure your business is successful. Contact us today 844-499-0113.

4. Know your debt service coverage ratio(DSCR)

Alabama lenders will likely look at your DSCR, which measures how well you can repay your loans. Divide your net operating income by your total debt service. For example, if you have a net income of $7000 per month and your loan payments are $3500, your DSCR would be 2 because your loan payment is half your income. A DSCR of 1.5 or higher is what most lenders prefer.

5. Be ready to back your business

Some banks or credit unions in Alabama want entrepreneurs who can guarantee the loan with their assets. Not only does this demonstrate that you believe in your company enough to risk your personal assets, but sometimes the company doesn’t have enough collateral to secure the loan amount.

If you expect others to put money into your business, you should be willing to put yourself out there financially. A loan guarantee from the business owner shows that you are fully vested in your business.

10 Ways You Can Use Your Alabama Business Loan

As a small business entrepreneur in Alabama, success in your business pursuits might require outside financial assistance. When you need additional funds for daily expenses, an equipment purchase, or some construction to your building, a business loan can help you reach your specific financial objectives.

Before you begin applying for business loans in Alabama, it’ll be helpful to determine how you plan to use the funding. Understanding where you need to spend the loan proceeds allows you to plan out your budget and determine which expenses you can afford to pay off with the business loan proceeds.

1. Daily Operations

Running your business from day-to-day comes with costs and can be expensive. Alabama business loans help businesses manage their expenses and any fluctuations in their revenues. Seasonal fluctuations can cause drastic changes in business. Funds from a business loan can help companies weather these changes. Most Alabama businesses have peak-seasons where the revenues are higher. A loan can help get through the off peak-seasons.

2. Equipment

Whether you run a restaurant in Alabama or provide medical care, you depend heavily on equipment in the everyday flow of your business. One way you could use your business loan is for equipment financing. Proceeds from a business loan can help to replace or acquire a piece of equipment vital to your business operations.

3. Tenant Build-outs

When starting out in a commercial space that’s basically a shell, the business owner will probably be responsible for covering some or all of the cost of building out the property.These build-outs or improvements are typical for many small businesses.

Improvements to a building may involve replacing an old kitchen for a restaurant or office space for a business firm. A landlord may let a renter (the small businessman) pay for some improvements by giving an allowance. But anything above that agreed upon amount is paid for by the renter. Business loans in Alabama can finance any remaining expenses related to a new venture.

4. Product/Inventory

Some businesses, such as retailers or restaurants, depend on sales inventory to generate revenue. When purchasing inventory for your store, a small business loan may be able to help you save money by purchasing large quantities at discounted prices.

5. Debt Refinance

As the number of Alabama lenders who specialize in lending exclusively to small businesses has increased, so has the cost associated with borrowing from them. Some of these loans may result in high interest rates for years after the initial period ends. Because of our flexible approach, our lender has been able to refinance numerous business loans in Alabama into more affordable loans for our clients, saving them thousands of dollars per month. These small business owners are now free to focus on expanding their business.

6. Buy A Business or Franchise

When considering a business acquisition or a small business purchase, a business loan can help fund the venture. Buying and running a franchise often falls between self-employed entrepreneurship and a full-time job. If you want to buy into a franchise, you can use a business loan to fund it. Being a franchise owner means you have access to the franchisor’s resources, business model, and stability while enjoying small business ownership. A loan may be utilized to purchase a small business as well. It’s imperative to work with a lender who can help you identify an affordable loan that supports long-term financial planning.

7. Start-up Costs

When starting a new business in Alabama, you’ll have similar needs as most established companies. Funds from business loans in Alabama can pay for these needs like employee salaries, technology, and advertising costs.
Business Loans can also fund inventory management, hiring new employees, and scaling up.

8. Expanding An Existing Business

If your small business survived its first few years, you might be wondering, “What now?” If your business is growing and you’re looking to expand into a new location or hire more employees, then a small business loan might be the answer. Look at your previous three quarters and play out different future possibilities before applying for a small business loan.

9. Staying Competitive

If you’re a long-standing small company that wants to remain competitive in its field, you can take advantage of a business loan to help you get ahead. Alabama businesses can use small business loan funds for new computers or technology upgrades. You can also get financing for any vehicles or equipment you may use in your business. Keep your company competitive by using business loan program.

10. Enhancements

You can use an Alabama business loan to purchase equipment for things like built-in furniture, lighting, and plumbing systems. A loan can fund improvements for the outside of your business as well, such as paving your parking lot.

Types of Business Loans
In Alabama

Term loans – A term loan is one type of small business loan. You receive the proceeds of the loan up front, which you pay back with interest over a set time frame.

SBA loans – These loans are guaranteed by the SBA(Small Business Administration), which offers them through its lending partners. Depending on how you intend to use the loan, repayment periods may vary. They include seven years for cash flow, 10 years for fixed assets, and 25 years for property purchases. Though SBA loans carry low interest rates, they typically have lengthy application process which can delay funds to your business.

Business lines of credit – A business line of credit allows access to funds up to a certain limit as a credit card does. You pay interest on the number of funds you use. This is a flexible funding source that usually requires no collateral.

Equipment loans – Equipment loans allow you to purchase equipment for your business. A typical equipment loan agreement has a fixed term, which is usually equal to the estimated lifespan of the item being financed. Rates will vary depending on the value of the equipment and the strength of your business.

Invoice factoring – When your business has outstanding customer invoices, usually due within 60 days, you can get cash now for those unpaid invoices by using an Invoicing Factoring Service. You’d sell the invoices directly to a factoring company. They’d collect from the customer when the invoices are due.

Invoice financing – Invoice financing is similar to invoice factoring, but instead of selling your unpaid invoices to a factoring company, you use the invoices as collateral to get a cash advance.

Merchant cash advances – You get a fixed amount of money upfront that you can use to fund your business. Instead of making one fixed payment each month from a bank account as you would with a term loan, you make payments on a merchant cash advance either by withholding a percentage of your credit and debit card sales or by fixed daily or weekly withdrawals from a bank account.

Personal loans – You can use a personal loan for anything, including business purposes. It’s an option for startups because most financial institutions won’t lend to companies without any business experience. Your loan approval depends solely on your personal credit history, but you must have good credit and verifiable income to qualify.

Business credit cards – Business credit cards are revolving lines of credit. You can use the card for whatever you want, but you must pay the minimum payment each month and not go over the credit limit. They’re usually best used for financing ongoing costs, such as travel, business equipment, and utilities.

Microloan –Small loans of $50,000 or less which are offered by nonprofit organizations and mission-based lending institution are known as microloans. Typically, these types of loans are available to startups, new businesses, and businesses in disadvantaged neighborhoods.

Resources for Current and Aspiring Entrepreneurs in Alabama

Entrepreneurship is an exciting and rewarding endeavor. Owning a small business can afford you the freedom to do what you love while being able to spend more time with your loved-ones. Business ownership can be empowering and if you’re willing to put in the work, you can be successful. WeFundItNow.com has put together a list of resources for you to learn from and network with others who share your passion for for business.