4 Important Factors in Choosing a Revenue-Based Financing Lender

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StrategyDriven Managing Your Finances Article | 4 Important Factors in Choosing a Revenue-Based Financing LenderWhen it comes to revenue-based financing, it’s important to do your research. Not all lenders are created equal, and you need to make sure you partner with a reputable company that has your best interests at heart.

Partner mentality, competitive terms, history of investing, and dependable and timely funding are the things you should consider when choosing a lender. Read on to learn more.

Partner Mentality

Once you start a company, you’re going to run into a number of people offering you money — but not all of these people will be able to offer you the support and guidance needed to truly grow. When you’re choosing investors, you don’t want someone who just hands you money and then leaves — you want someone who will act as an active partner in your business.

There are revenue based financing firms that would be more than glad to partner with you to help grow your business. They’re committed to helping you throughout the entire duration of your loan, even after the term sheet has been signed and the transaction has been completed.

Competitive Terms

First-time business owners can run into lenders who want to hand them a term sheet that was drawn up without the borrower’s consultation. While this may seem like an easy and quick way to get money, these deals usually end up having less-than-ideal results for you.

You should only work with an RBF lender who will work with you to come up with the best terms possible for every party involved. Your needs and the lender’s needs should be accounted for, and a good lender will draft a term sheet that reflects this.

History of Investing

As more SaaS companies are established, RBF increasingly becomes more popular. This means you have more lenders to choose from — both good and bad.

Low-quality lenders can quickly ruin your company, so it’s important to do research on a lender before accepting a deal. Check a lender’s portfolio and contact their previous clients to see what their experience was like. If no red flags appear, you can move forward more confidently.

Dependable and Timely Funding

Managing a business is hard enough without factoring in an unreliable vendor. When you mix in chasing down an investor for the capital they promised, it gets even harder.

While it may sound absurd, this is a situation some founders deal with — which is why it’s important to partner with a reliable lender. Choose a firm that has a strong and positive reputation as well as a track record of providing funding without any complex approval processes and delays.

Choosing the Right Partner for Lasting Growth

As an organization that’s heavily dependent on funding, it’s crucial to have the right lender supporting you — not just financially, but holistically. By doing your due diligence and avoiding accepting deals prematurely, you can ensure you partner with a lender who can act as an investor and a mentor during an important phase in your company’s growth.

The 4 Most Important Financial Tips for Small Businesses

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StrategyDriven Managing Your Finances Article |Financial tips for small businesses|The 4 Most Important Financial Tips for Small BusinessesRunning a small business is not easy. There are so many things to think about, and it can be tough to stay organized when you’re juggling everything on your own. One of the most important aspects of being a small business owner is managing your finances. If you don’t understand financial concepts well, it will be difficult to make your business successful. This blog post will discuss the four most important financial tips for small businesses!

1) Make sure you have a budget:

This may seem obvious, but it’s essential to understand your finances. You need to know how much money you have coming in and how much you’re spending each month. Creating a budget will help you keep track of your finances and make sure you’re not overspending. If you don’t have a lot of experience with budgeting, there are plenty of resources available to help you get started. Many software programs can help you track your expenses and income.

2) Get A Credit Card:

A credit card can be an excellent tool for small businesses. It can help you build your credit score and give you access to funds in case of an emergency. Just be sure to use your credit card wisely and only spend what you can afford to pay back.

If you’re not using a credit card already, now is the time to get one! Just make sure you shop around for the best rates and compare credit cards before you decide which one is right for you.

And remember, always pay your balance in full and on time to avoid interest charges and late fees.

3) Keep Your Records Organized:

It’s important to keep track of all your financial records, including receipts, invoices, and statements. This will help you stay organized and make it easier to track your expenses. You can use a software program to help you keep track of your records, or you can simply create a system that works for you.

Whatever method you choose, just be sure to stay on top of your records so you can always know where your money is going. Organizing your financial records will also make it easier to prepare for tax season!

Paying taxes is one of the most critical responsibilities of any small business owner, so it’s crucial that you stay organized throughout the year.

4) Have A Plan For Your Money:

It’s not enough to just have a budget – you also need to have a plan for your money. For example, what will you do with the money you’re bringing in? Are you going to reinvest it back into your business? Are you going to save it for a rainy day?

You need to have a clear understanding of your financial goals, and you need to create a plan that will help you achieve those goals. It will be challenging to make intelligent decisions about your money without a plan.

In conclusion, these are the four most important financial tips for small businesses! If you can master these concepts, you’ll be well on your way to financial success. Just remember to stay organized, make a budget, get a credit card, and have a plan for your money. With these tips in mind, you’ll be sure to find success in the world of small business finance!

Three Tips for Budgeting Your Business’ Money Well

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StrategyDriven Managing Your Finances Article |Budgeting Your Business|Three Tips for Budgeting Your Business' Money WellWhether you’re just starting out or have been running your business for a while now, keeping track of your company’s finances is essential for any entrepreneur. Of course, keeping on top of your company’s money isn’t always easy, especially if you have a lot going on in the day-to-day operations of your business. However, simple steps like budgeting, recording your expenditure and hiring a professional accountant are essential to ensure your business’ finances are handled correctly.

Make a Budget and Stick to It

Before you start any major project for your business, you want to decide on a budget. That way, when you’re planning out the steps to take in your project, you can make sure each task fits in with your budget. It’s probably best to have an ideal budget that you try to work towards and a maximum budget that you cannot go over. That way, you have some flexibility without worrying about spending beyond your means.

Ideally, you should have a budget for every facet of your company, from salary to office equipment to bonding activities. Then, as your company grows, you can adjust these budgets accordingly and how they feed into your annual budget overall. Although you can change as need be, it’s best to approach every aspect of your business with a budget to prevent yourself from overspending.

Record Everything You Spend

This step is crucial when it comes to budgeting your money. It’s challenging to set yourself a budget or keep to a budget without recording the details of each transaction. You want to keep a firm grasp of how much money you spend and record each outgoing expense as soon as possible. It’s best to have a financial report from all your employees every few weeks to evaluate how much money is spent and where. This also allows you to nip any unnecessary spending in the bud. By consistently checking in with your financials, you can adjust your budgets accordingly for the rest of the year.

For example, if your business has a budget for $300 each month on supplies and $350 on advertising, you could break it down further to see that it costs $10 per day on supplies and $8 per day on advertising. You can then compare how much money you’ve spent in these areas every few weeks to see if you’re sticking to, going under or going over your budget.

If recording your expenditure does reveal that you are spending less than your budget, then this may be a sign to reevaluate. For instance, if your advertising costs are lower than your budget, this could be a sign that your business should be advertising more.

Recording every cost may not seem overly complicated now, but keeping track of things becomes crucial when your company starts growing more prominent and spending more money.

Hire a Professional

Once you get to a certain size, you want to look into hiring a professional accountant to make sure your finances are on track. As managing your business’ finances becomes a more significant task, you may simply find that you don’t have the time or expertise to control the financial side of things yourself.

You want to find an accountant that fits your business’ needs, whether that means hiring a virtual accountant, an accountant that specialises in your field or promoting one of your previous employees to manage your financial data. Either way, hiring an accountant is the best way to make sure you don’t make crucial mistakes as you continue on.

Should You Apply for an Equipment Financing Loan?

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StrategyDriven Managing Your Finances Article | Should You Apply for an Equipment Financing Loan?Can your business benefit from new equipment? Maybe it’s time to apply for an equipment financing loan. Here are some things you should consider first.

What is An Equipment Loan?

An equipment loan is a type of financing in which businesses can purchase new or used equipment. The purchased equipment secures the loan, and the term is typically for 3-5 years. Equipment loans are popular among small businesses because they provide a way to finance needed equipment purchases without having to dip into their working capital or risk their personal finances.

Benefits of Applying for an Equipment Loan

There are several reasons your business might benefit from applying for an equipment loan.  Take a look at some of the most common.

Finance New or Used Equipment

With an equipment loan, your business can finance the purchase of new or used equipment. This can be a great way to upgrade your operations without using your working capital.

Tax-Deductible

The interest on an equipment loan is tax-deductible, which can help reduce your business’s tax burden. In addition, you can write the entire principal amount off as a business expense.

Fixed Interest Rate

Another benefit of an equipment loan is that it typically has a fixed interest rate. This allows you to budget your payments since you’ll know exactly how much to pay each month

Down Payment May Not Be Required

Some equipment loans don’t require a down payment, which can be helpful if you don’t have the cash on hand to make a large purchase.

No Prepayment Penalty

Most equipment financing solutions come with no prepayment penalty, which means if your business can pay off its equipment loan early, you won’t be charged extra. This can save you money in the long run.

Fixed Monthly Payments

Equipment loans have fixed monthly payments, which allow you to budget for your expenses.

Things to Consider Before Applying for an Equipment Loan

Before you apply for an equipment loan, make sure to consider the following.

Purpose of the Loan

The first question you should ask yourself is about the purpose of a loan. Will the equipment purchased with the loan help your business grow? Will it improve your bottom line? If you can’t come up with a legitimate reason fow how your business will benefit from an equipment loan, it may not be the right choice for you.

Can You Afford the Loan?

The next question you need to answer is whether you can afford the loan. An equipment loan is a form of debt, and you need to be sure you can make the payments each month.

Equipment Collateral

You can use the equipment your business purchases as collateral for the loan. If you default on the loan, your lender can seize the equipment. Make sure you’re comfortable with this before applying for a loan.

Length of the Loan

The loan term for an equipment loan is typically 3-5 years. This is the time you have to repay the loan. Be sure you are comfortable with this timeframe before committing to a loan.

Interest Rate

The interest rate on an equipment loan is typically fixed. This means that the interest rate will not change over the life of the loan.

The Bottom Line

Once you have considered the benefits and drawbacks of an equipment loan, it’s time to decide. If your business could benefit from the new or used equipment, an equipment loan might be the right financing option. Be sure to look into various lenders, or work with a fintech marketplace like National, to find solutions suitable to your needs.