Are you hoping to start or grow a small business? Are you considering a loan from a bank or credit union to do so? Before making a financing decision, consider the pros and cons of applying for business funding

The Pros:

1. Lending institutions will not interfere with your business.  Unlike with an investor or a business partner, a bank or a credit union will not place requirements on how your business is started or grown A business partnerwill likely expect to have a say in how you spend his money.  Lending institutions, on the other hand, are concerned only with repayment, leaving you control over your business. 
2. Business funding is convenient and easy to access.  Applying for a business loan with a financial institution can be as easy as completing an application and understanding the terms of your funding. As a small business owner, your time is best spent on developing your business, not on application paperwork or waiting for investments to yield profits.  The same applies to looking for investors and business partners- it’s a long process that can drag out for a long time. 
3. Business funding can afford you reasonable repayment terms.  Many banks are competing for customers and willing to offer a financing structure that is more advantageous than their competitors, whether in the form of a lower interest rate or a higher loan amount.  Additionally, the profits from the business are yours.  Partners and investors often expect a return on their investment and a percentage of ownership in the businessConversely, when you take out a loan, you pay the financial institution back only the amount of the loan plus interest.

The Cons:

1. A certain percentage of your business funding applications may be denied.  Banks impose certain requirements on loan applicants. Even applicants with high credit scores and documented income, are subject to rules and conditions related to business funding., and even the strongest applicants will meet the criteria determined by certain banks.
2. You may not receive the amount of money you want or apply for.  Lending institutions may think that you or your business doesn’t need all the money that you’re asking for, or that your credit profile doesn’t support a particular loan amount.  As a small business owner relying on these lending institutions to start and grow your business, the uncertainty as to loan amount can present a challenge.

After considering the pros and cons of business funding, should you decide business loans and lines of credit are for you, and for more information, visit www.3xcapitalgroup.com.