How Qualified Are You For Your Next Business Loan

This is not a trick question, by an means. Business loans generally fall into one of two categories. You either have the asset-based loans, or you have the ones you factor in financially.

Some of you might think that both these loans are going to require the same information. They do not. With each loan, you will have different requirements. There are different sets of rules to play by with the asset-based loans. In some cases, you need to consider quick loans because you need cash in a hurry. However, it’s best to look over each one prior to being accepted. This will give you a base. This will give you an understanding of each one. This way you can decide which one works best for you.

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What is the difference between the two?

To answer this question, we must first analyze each one individually.


This is the one that is more associated with the traditional loan category. This one requires more documents. This one requires more paperwork. The bank or lender is looking to be sure that you are credit-worthy. The bank or lender wants to know that you have the proper resources to back everything up. They also want to know if you are going to make good on your payments.

Most banks and lenders use the seven-a program. This is program usually has the least amount of risk involved. This program is perfect for those who have very small businesses.


This is the one you want if this is only going to be for shorter period of time. There is another term we use in the business. We often times call this the <strong>accounts-receivable financing.</strong>

In basic terms, this is usually when clients want to cover a short cash shortage flow. They end up selling off certain assets in order to pat for it. How much can you expect to get with this type of loan? It all depends. The banks and lenders have to take a look at what type of risk you are; especially, when it comes to your unpaid debts. They also have to take a look at the percentage associated with your financial holdings.

Which one is better? This all depends on you and your business associations.


managerThis, again, depends on a few factors. With the asset-based loans, you will need a very high credit score. You must be between seven-hundred and eight-hundred. You might be able to get in for six-hundred fifty. This depends on your sales. You must prove that you are worth the risk for this one.

The factoring one requires much less. As long as you have set up your business properly, you are good. As long as you have a positive business history, you are in. Speak to your lender or bank representative first though. You never want to jump to any conclusions with this.

For more information on how to qualify, please visit our site below.