Elytics, Inc.

Description

Commercial Finance Companies are the companies that make many car loans. They take on higher risk commercial loans than banks and can handle commercial loans. If your small business will continually need your loan ceiling increased, a finance company may be your best bet. Some of the situations that may precipitate your need to go to a finance company are: your company is high-growth and will continually need its loan ceiling raised; your credit history is spotty; or your company has a high debt-to-worth ratio with a strong cash flow.

What you will need to provide to venture capitalists is information. Begin by sending the executive summary of your business plan to venture capitalists you have identified as prospects. Do not send your entire business plan at first. If a venture capitalist wants your business plan, he or she will ask for it.

Most small business loans are secured with company or personal assets. Lenders will usually ask for personal guarantees, as well as collateral from anyone who owns more than 20 percent of the company. The bank's intent by requiring all this is, in part, to gauge whether you think your company is worth the risk you are asking them to take. Business loans have more strict requirements than consumer loans. For example, if your business is in tough financial times, your bank may ask you to immediately pay off the full amount of the loan, something that is unlikely to happen with a consumer loan.

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