Having access to a business line of credit is essential for any entrepreneur or a small business owner. Providing you with the funds needed for operating expenses, purchasing materials, and funding projects. But securing a business line of credit isn’t always easy. In fact, it can be a complex process. Especially for a smaller business with less financial history or capital.

However, with the right knowledge and preparation, securing a line of credit can be much easier than you think!

In this guide, we’ll explain how secured lines of credit work and why they’re important for businesses. Along with the steps you need to take to secure one for your own company.

How Does a Secured Line Of Credit Work?

A secured line of credit is a type of loan that’s backed by collateral like real estate, savings, or investments. This provides the lender with the assurance that the debt will be paid back. The borrower pays an annual fee for access to the line of credit while making regular payments on any amounts borrowed. Borrowers are usually required to provide a personal guarantee in addition to pledging their collateral. Which serves as security against defaulting on the loan.

They also generally come with more favorable terms than other types of credit. In part due the risk to the lender being lower if they repossess and liquidate pledged assets. It also offers flexibility since borrowers can draw up funds as needed. Making it an attractive option for entrepreneurs and small businesses looking for working capital.

Secured Business Line Of Credit Vs Unsecured Business Line Of Credit

Business Lines Of Credit exist in both Secured and Unsecured variations. A Secured Business Line Of Credit requires the borrower to put up collateral, as a guarantee for repayment. This type of loan is less risky for the lender since they have some form of security in case the borrower defaults on the loan.

On the other hand, an Unsecured Business Line Of Credit does not require collateral. Instead it relies more on a business’s creditworthiness and financial standing. The lender takes on more risk with this type of loan since there is no collateral to back it up.

Both types of loans provide businesses with access to money that can be used for any business expense that arises. However, unsecured lines of credit typically come with higher interest rates than secured lines of credit due to the increased risk taken by the lender. It is important for businesses to carefully consider both options before deciding which one is best suited for their needs.

Is It Hard To Secure a Business Line Of Credit?

Securing a business line of credit can be difficult since lenders have to assess the financial risk associated with the loan. The lender must judge the ability of the borrower to pay back the loan and their capacity to meet future obligations.

Factors such as a lack of collateral, unsteady cash flow, or inconsistent credit history can all lead to denial or unfavorable terms when applying for a business line of credit. In some instances, businesses may need to demonstrate sufficient and consistent income, pledge collateral or personal guarantees, or present additional financial statements and documents before being approved for a loan.

How to Secure a Business Line Of Credit: A Step-By-Step Guide

To help you acquire the financial resources you need, here’s a comprehensive guide to help get started:

1. Understand your needs and objectives: Before applying for a loan, it’s important to have a clear understanding of how much money you need and why. Have an estimate of what expenses the loan will cover and make sure there are realistic repayment plans in place.
2. Research lenders: Do some research on various lenders to determine which one is right for you and has the best terms. Consider both secured and unsecured lines of credit when conducting your research so you can compare offers from different lenders.
3. Prepare supporting documents: To get approved for a loan, most lenders will require proof that you can pay back any money borrowed from them. Gather income statements, financial statements, and other documents needed to apply for the loan successfully.
4. Apply for the loan: Once your documents are in order, it’s time to start applying for the loans you are interested in – follow each lender’s instructions carefully during this process so your application doesn’t get delayed or denied due to incorrect information or missing paperwork!
5. Negotiate repayment terms if necessary: If your application gets approved, many lenders offer repayment plans tailored specifically to their borrowers’ needs and circumstances – so don’t be afraid to negotiate these terms before signing on the dotted line!
6. Monitor usage/payments closely: After securing a business line of credit, be sure to monitor usage and payments closely so that you stay within budget and always pay back funds on time!

Tips for applying in 2023

Here are some tips and tricks for applying for a line of credit in 2023:

• Look around. Before applying for any type of loan, it’s important to compare shops so you can find the best interest rate and payment terms. Be sure to look at both secured and unsecured lines of credit when conducting your research.
• Know your finances. To get approved for a line of credit, lenders will want to see proof that you can repay any money borrowed from them. When applying for a loan, make sure you know your current financial standing and be prepared to provide income statements and other documents when necessary.
• Have collateral ready. If you are applying for a Secured Line of Credit, make sure you have collateral ready to back up your application. This could include real estate investments, savings accounts, or any other asset that is accepted by the lender.
• Get creative with repayment plans. Many lenders offer repayment plans tailored specifically to their borrowers’ needs and circumstances – so don’t be afraid to negotiate these terms before signing on the dotted line!

Using a line of credit wisely can help business owners take advantage of unexpected opportunities while also keeping track

Conclusion

Securing a business line of credit is an important step for businesses that need to access funds quickly and efficiently. With the right research, preparation and understanding of your financial needs, securing a loan can be made much simpler. To ensure success in securing a business line of credit, it’s essential to compare lenders, have collateral ready if necessary, understand your current financial standing and get creative with repayment plans when negotiating terms. Follow these steps to make sure you are taking full advantage of all available opportunities while also keeping track of usage and payments closely.

When it comes to taking out a Small Business Administration (SBA) loan, there is no one-size-fits-all approach. Every business has unique needs and goals. This means the best way to prepare for an SBA loan depends on your circumstances.

That said, there are some general steps to making sure your application is approved quickly and smoothly. Maximizing your chances to get the capital you need for your business.

In this article, we’ll discuss how to prepare for taking out an SBA loan. Along what the measures you can take to ensure a successful outcome.

How Difficult Is An SBA Loan?

Getting an SBA loan can be an involved process. However, business owners and entrepreneurs can obtain these loans with the help of a banker or advisor. Generally, there are two main types of loans issued by the Small Business Administration – 7(a) and 504. The application process for each type of loan may vary, but all require detailed information about the borrower’s financials, credit history and business plan. Additionally, businesses seeking SBA loans must provide collateral to secure these loans and meet certain qualifications. Obtaining an SBA loan can be a long and complex process, but with the right guidance, it is possible to get access to critical funding that can help expand businesses and achieve their goals.

SBA Loan: How Much Can I Borrow?

The amount that can be borrowed through an SBA loan depends on many factors, such as the type of loan, the business’ financial history and credit score, and the purpose of the loan. Generally speaking, 7(a) loans have a maximum amount of $5 million while 504 loans can go up to $5.5 million. Additionally, it is important to consider that businesses may need to make a down payment for these loans or provide additional collateral if their normal security does not meet required standards. The exact limits of an SBA loan depend upon individual circumstances, but with professional guidance and a thorough understanding of eligibility requirements, entrepreneurs can find out how much they can borrow from the Small Business Administration.

What Are the Costs of an SBA Loan?

Before applying for an SBA loan, it is important to understand the associated costs. Generally, borrowers may need to pay a variety of fees to secure their loan, including application fees and closing costs. Additionally, it is important to consider that lenders may require businesses seeking SBA loans to purchase additional insurance policies or guarantee certain percentages of the loan. The exact costs of an SBA loan depend on various factors and may vary from lender to lender, so businesses need to understand these fees before taking out a loan.

How Does The Application Process Work?

The SBA loan application process typically involves the following steps:

1. Research the requirements and qualifications for an SBA loan.
2. Gather the necessary documentation and financial information needed for the application.
3. Submit the completed SBA loan application to a lender approved by the Small Business Administration.
4. Review and sign any required documents from the lender.
5. Wait for approval of the loan from an authorized lender backed by the Small Business Administration.
6. Receive funding, depending upon a variety of factors such as credit worthiness and collateral assets available to secure a loan.
7. Repayment of funds beginning six months after receiving funding according to terms outlined in the loan agreement with principal and interest payments due monthly or quarterly, depending on loan agreement terms with lender

Key Tips on How To Prepare For An SBA Loan

Here are 15 key tips on how to prepare for an SBA loan:

• Understand and meet the qualifications of the program you’re applying for and understand the process.
• Gather all financial documents, such as tax returns, profit and loss statements, balance sheets, and debt-to-income ratio calculations.
• Have a solid business plan that demonstrates the potential success of your venture.
• Brush up on credit score requirements; generally these should be at least 620 with many lenders.
• Assemble an experienced team of professionals to help you through the process; this may include accountants, lenders, and attorneys.
• Research different types of SBA loans available to determine which is best for your needs.
• Get letters of reference from customers or partners who can attest to your company’s stability and track record in terms of paying bills on time.
• Keep detailed records on past transactions and expenses in order to answer any questions a lender might have without significant delays.
• Calculate your projected cash flow carefully so you can make accurate projections about repayment options if necessary.
• Determine how much money you really need by breaking down each cost associated with taking out the loan.
• Make sure that everything else in your application is accurate down to the song punctuation – errors can delay approval times significantly or even lead to disqualification from certain programs
• Don’t hide information from lenders if it could end up leading to trouble down the road. It’s better to be honest than risk damaging relationships with creditors.
• Consider alternative funding sources while waiting for approval – some delays can take months or years depending upon current circumstances
• Contact an attorney or other legal expert if there are any questions about paperwork or contracts related to the loan process
• Ask a lot of questions throughout the loan process – don’t be afraid to seek clarification before signing any contracts

What Is The SBA Disaster Loan Forgiveness Program?

The SBA Disaster Loan Forgiveness Program assists small businesses affected by declared disasters. This program allows eligible loan borrowers to have up to $2 million of their disaster loan forgiven. But only if the loan was used for certain expenses.

Eligible expenses include payroll costs, debt obligations incurred before the disaster, and repair of damaged business property. To qualify for this program, the borrower must be approved for an SBA disaster loan, demonstrate that they had suffered financial loss as a result of the disaster declaration, and use the funds from the disaster loan to cover eligible expenses.

Conclusion

Taking out an SBA loan is a complex process, but with the right preparation and understanding of all the requirements involved, it can be done successfully. By following our 15 key tips to prepare for an SBA loan, you’ll have a better chance of getting approved by lenders backed by the Small Business Administration. Additionally, if your business has been affected by declared disasters in any way shape or form, consider applying for the SBA Disaster Loan Forgiveness Program which could provide up to $2 million worth of assistance. With these tools at your disposal, you are well on your way towards securing funding that will help propel your business forward!

As a small business owner, you are likely already aware of the challenges facing businesses today. But what about in 2023? What challenges will small businesses face then? This article examines some of the most pressing issues that may arise and provides strategies to help you prepare for them now. We’ll look at how technology is changing the landscape, what new regulations may be imposed, and what other external factors could affect your business. By understanding these potential challenges ahead of time, you’ll start planning for future success. With this knowledge, you’ll also start addressing problems before they become overwhelming. Ensuring your small business is ready to tackle whatever obstacles it might encounter in 2023.

What Is The Biggest Problem Facing Small Businesses in 2023

The biggest problem facing small businesses in 2023 is limited access to capital. Businesses often lack the funds and resources needed to grow, expand, and take advantage of new opportunities. Additionally, rising costs, competition, and regulations can all present significant challenges for small businesses that may not have the resources or personnel to keep up with them all. Furthermore, obtaining financing from banks or other lenders may be difficult if a business doesn’t have a proven track record or collateral that lenders desire as security against defaulted payments.

With limited access to capital, small businesses can find themselves unable to grow and remain competitive in their respective markets. As a result, the future of many small businesses is uncertain unless they can overcome these challenges and secure necessary funding for their operations.

The 10 Challenges Faced By Small Businesses in acquiring capital

Unfavorable Loan Terms

Small businesses may struggle to obtain loans on favorable terms. Usually stemming from high-interest rates or repayment schedules that strain their budget.

Limited Access to Financial Assistance

Government and private programs that provide financial assistance may have strict requirements. Restricting funds and credit from small businesses.

Insufficient Collateral

Banks and other lenders may require collateral from borrowers, which presents a challenge for small businesses without enough assets to use as collateral.

Difficulty Establishing Creditworthiness

Small businesses with limited credit histories or public records may find it difficult to establish their creditworthiness.

Documentation Requirements

Lenders often require extensive documentation of a business’s finances and operations before approving any loan requests. Creating a serious nuisance for busy business owners.

High Risk of Default

Due to their smaller size and limited resources, small businesses are more vulnerable to encountering economic hardships. Including hardship that leads them to default on loan payments down the road.

Long Processing Times

Waiting for loan approval can be a lengthy process due to all the paperwork needed for assessment.

Inexperience with Financing

Many small business owners lack experience when it comes to financing and borrowing. Which leaves them at a disadvantage when trying to negotiate more favorable loan terms.

Shorter Borrowing History

Having an established history of sound borrowing practices is beneficial when applying for loans. Unfortunately, this is something that many small businesses lack due to their short time in the market.

Costly Fees & Penalties

Obtaining financing typically involves various fees and penalties that can add up quickly. Making it more expensive overall.

What Steps Can Small Businesses Take To Secure Capital?

Establish Credit History

Building a good credit history is important for any business looking to secure financing from banks or other lenders. Making sure all payments are made on time helps establish creditworthiness to potential lenders.

Obtain Collateral

By offering collateral such as land or equipment, businesses may be able to reduce loan interest rates and secure financing more easily.

Seek Out Grants

Government and private programs often offer grants to small businesses. Which can be used to cover costs associated with setting up a business or expanding operations.

Connect with Investors

Businesses can also reach out to potential investors or venture capitalists in order to secure the capital needed for their operations.

Look into Alternative Financing Options

Small businesses may want to consider sources like alternative lenders that may have more flexible terms than traditional banks.

Create a Detailed Business Plan

Having a well-crafted business plan is an essential element when applying for loans or other forms of financing.

Alternative Options for finding capital in 2023

Business Line of Credit – A revolving loan made available to a business from a lending institution. Allowing the company to borrow funds up to a predetermined limit for an indefinite period of time.

Equipment Financing – A type of financing that provides businesses with access to capital in order to purchase or upgrade equipment.

SBA Loans – Small Business Administration loans are government-backed loan programs offered by banks and other private lenders. These loans provide small businesses with essential working capital, enabling them to grow and reach their goals.

AR Financing – Accounts receivable (AR) financing is a form of short-term financing where businesses use invoices as collateral in order to secure capital. This type of financing allows businesses to improve cash flow without taking on debt.

Merchant Cash Advance – An alternative funding option that allows small businesses to receive cash for a percentage of their daily credit card sales or future sales.

Asset-Based Loans – A loan secured by collateral such as inventory, accounts receivable, or equipment. This type of lending is typically used when traditional lenders are not an option due to risk or creditworthiness concerns.

Franchise Financing – Financing specifically tailored for business owners who wish to buy into an existing franchise system, providing access to capital needed for initial investment costs.

Fix N Flip Loans – Short-term financial solutions provided by specialized lenders that allow investors and homebuyers alike the opportunity to purchase distressed properties and flip them for profit.

Credit Card Processing – The process of accepting payments via credit/debit cards in person, online, or via phone. This service is usually provided by third-party companies known as Payment Processors.

Startup Funding – Capital invested into new companies with high potential for growth and success. Startup funding can come from angel investors, venture capitalists, crowdfunding platforms, corporate sponsorships, and more.

Conclusion

The challenges small businesses face today can be daunting, but with the right strategies and tools in place, they can overcome them. From obtaining collateral to seeking out grants or connecting with investors, there are numerous options available for finding capital in 2023. Additionally, having a detailed business plan is essential when applying for loans or other forms of financing. With careful planning and research into all the different funding sources available, small businesses have an opportunity to secure the resources needed to reach their goals.

A dream job as a self-employed person or a small business owner may seem like a good idea. Unfortunately, you won’t have access to either a 401k or a retirement plan at work. Even though you can contribute up to $6,000 annually, it might not suffice to help you reach your savings goals. Keogh plans (pronounced Key-oh) are a way to get there. 

What Is a Keogh plan?

A Keogh Plan is a retirement plan that can be used by self-employed people and employees of unincorporated businesses. Keogh contributions can be made using pre-tax dollars. However, there are annual contribution limits.

Keogh plans are defined as defined benefit plans that provide a guaranteed retirement income. But most Keogh plans can be structured as defined contribution plans. These plans allow workers to contribute a portion of their income rather than guaranteeing an income. The following are the most common Keogh plans.

Profit-sharing plans allow companies to contribute less than 25% of the compensation.

Qualified defined benefit plans are ideal for retirees. The amount is based upon employees’ years of service.

Keogh’s plans were named after the New York congressman Eugene James Keogh. He championed the passage of the Self-Employed Individuals Tax Retirement Act of 1962. The law enabled unincorporated companies to sponsor retirement plans for their employees. Since the IRS said this term is obsolete, Keogh plans are known as HR 10s or qualified retirement plans.

Keogh Plan Rules

The IRS offers qualified plan rules intended for Keogh plans. Here are the plan rules:

Should be self-employed:  to be eligible for the plan, you must have self-employment. Having another active plan does not disqualify you if you still earn from your self-employment activities.

It can be a defined benefit or contribution plan: although costs may vary, you may opt for any option. Defined benefit plans attract higher contribution limits but have actuarial costs.

Should offer to qualified employees: you should avail the plan to employees at least 21 years of age or those who work for you for at least 1000 hours in one calendar year.

The setup should be done before the year ends: you cannot set up the Keogh plan between the deadline for filing tax and the end of the year. You should therefore set it up during the period it is effective.

Withdrawal age limits: when can you withdraw from a Keogh? You cannot withdraw money before 59 ½ under Keogh plans.

72 years is the minimum distribution age: if you turn 72 and still have a balance in your Keogh, you should take distributions from your account.

Remit taxes on distributions: Keogh’s plan withdrawal charges attract income taxes.

You should file an IRS form 5500. You must file form 5500 annually to report data on your plan to the IRS.

Keogh Plan Advantages and Disadvantages

We’ve already answered the question “what is a Keogh plan?” Now, we’re going to list the pros and cons:

Pros

• It can be opened as either a defined benefit plan or a defined contribution plan

• It has high contribution limits

• There are pre-tax contributions

Cons

• There are numerous costs and paperwork as opposed to other retirement plans

• May need professional management

• Only ideal for business owners and self-employed workers

Keogh Plan Contribution Limits in 2023

How much can you contribute to a Keogh? Here are the amounts and limitations:

Employee Contribution Limit : 2023 401(k) / 403(b)

Individuals under the age of 50 will pay up to $22500 in 2023 for total employee contributions to 401(k)  and 403(b). The catch-up contribution limit will be $7500. Therefore, individuals over 50 will pay $30,000 in 2023 for their 401(k) employee contribution.

Total Contribution Limit : 2023 401(a) /403(b)/ 401(k)

All employer and employee contributions per employer in 2023 will be $66,000 for individuals under 50. The total contribution of individuals over 50 years will be $73500 since the catch-up contribution is now $7500. Remember, the 403(b) limit is independent of 401(a). So you can get $66,000 from each of the options.

Contribution Limit : 2023 457(b)

457(b) contribution limits will be $22500 in 2023. This option has special catch-up contribution rules. So, talk to your plan administrator if you want to put more in your 457(b).

Traditional and Roth IRA Contribution Limits in 2023

Traditional and Roth IRA contribution limits will be $6500 for those less than 50 and $7500 for those above 50.

SEP-IRA Contribution Limits in 2023

For 2023, SEP-IRA will be $66,000

SIMPLE 401(k) and SIMPLE IRA Contribution Limits in 2023

SIMPLE 401(k) and SIMPLE IRA will be $15,500 in 2023

Health Savings Account (HSA) Contribution Limits in 2023

For single individuals, the limit in 2023 is $3850. Family coverage, on the other hand, is $7700

Flexible Savings Account (FSA) Contribution Limits in 2023

Healthcare FSA contribution limits for 2023 will be $3050. Keep in mind that other FSA types, such as dependent care FSAs, have their own limits.

What Is the Difference Between a Keogh Plan and a 401k?

The 401(k) is the alternative to the Keogh plan. And even though they are similar in many ways, their fundamental differences made the 401(k) more popular.

The 401(k) is a qualified contribution plan sponsored by the employee. You can open this plan if your employer offers one. You make contributions based on your company’s policy. Your employer will contribute as well.

Even though Keogh plans are meant for the self-employed and their workers, more people opt for 401(k) plans. If you are self-employed, you can open a solo 401(k), which is also called an individual 401(k) or one-participant 401(k).

One-participant 401(k) plan lets you contribute an extra 25% of your net earnings to the account on top of the standard contribution limits, totaling $66000 for 2023. Also, 401(k) plans are easy to manage and straightforward. They also don’t attract administrative burdens.

Who Cannot Participate In a Keogh Plan?

Freelance workers or independent contractors cannot participate in the Keogh plan. The same is true for one member of a partnership – they cannot participate independently. Self-employed individuals can participate in the Keogh plan, but they should first establish a business.

Conclusion

Now you know the answer to “what is a Keogh plan?” As a self-employed or small business owner, you must carefully consider many retirement plans when searching for the best plan. SEP-IRAs, solo 401(k)s, and individual 401(k)s may be better options than Keogh plans. And if you were wondering, “can I roll a Keogh into an IRA?”, the answer is yes, you can. The qualified plan plans, however, should not be forgotten when looking at plans.

Small business owners often face difficulty in gathering financing. Fortunately, Small Business Administration (SBA) loans are available to help them find the funding needed.

SBA loans can be used for a variety of different purposes. Ranging from starting a new business, expanding an existing one, or even working capital.

In this article we discuss what you need to know about SBA loans. How they can benefit your small business. While providing some tips on how to secure the best loan agreement possible. Letting you get the most out of your investment.

So if you’re considering taking out an SBA loan for your small business, read on to learn more!

What Is An SBA Loan?

Small Business Administration loans are a type of loan that’s specifically designed for helping small businesses succeed. This form of financing provides funds for start-up costs, equipment purchases, and other business needs. An SBA loan can be used by an individual or business entity to finance a variety of applications. Including the purchase of real estate, machinery and equipment, working capital, or debt refinancing.

SBA loans are offered through participating banks and lending institutions and partially backed by the government. This means that banks and other institutions are more willing to lend money. As they have an additional form of collateral in the form of a government’s guarantee. This reduced risk of default means that lenders can offer more favorable terms to borrowers with an SBA loan.

What To Know About SBA Loans?

Before applying for an SBA loan, it is important to be aware of some basic requirements and facts. Here are a few things to keep in mind:

– You must have good credit and be able to demonstrate the ability to repay the loan.

– Interest rates on SBA loans are generally lower than other forms of financing. Which is used by the government in order to guarantee the loan, but terms and conditions vary.

– The application process can take several weeks or months, so it is important to plan ahead.

– Your business must meet certain size requirements as set out by the SBA in order to qualify for an SBA loan.

– It is also important to note that not all lenders offer SBA loans, so

Before applying for an SBA loan, it’s important to understand the qualifications, terms, and conditions of the loan. As well as what you need to provide to be approved.

How Do SBA Loans Work

SBA loans are funded through banks, credit unions, and other financial institutions that partner with the SBA. Banks act as lenders that issue the loan while the SBA provides a guarantee to the lender in case of default.

To apply for an SBA loan, you must submit a business plan, financial statements, and other documents to prove your ability to repay the loan. Once approved, borrowers have access to funds within days or weeks depending on their specific situation.

Ultimately, SBA loans can provide small businesses with much-needed working capital or funds for large investments like real estate purchases. However, it’s important to understand what is required and expected before applying for one of these loans.

What Can SBA Loans Be Used For?

SBA loans can be used for a variety of things, including working capital, making payroll, and the purchase of real estate or equipment. They are also commonly used to refinance existing debt or to fund expansions, renovations, and other large projects.

Ultimately, SBA loans offer an attractive option for small businesses looking for financing because of their government guarantees and favorable terms. However, it’s still important to understand what is required before applying for an SBA loan. It’ll allow you to make sure that your business meets the qualifications and is prepared for the application process. With the right preparation and research, these loans can provide small businesses with much-needed funding or a way out of high-interest debt.

The Small Business Administration provides a variety of resources to help businesses learn more about SBA loans and the application process. Taking advantage of these resources can be a great way to ensure that your business takes full advantage of this financing option.

Pros & Cons SBA Loans

Pros of SBA Loans

1. Low-interest rates
2. Long repayment terms
3. Access to funds quickly
4. Flexible terms and lending criteria
5. Opportunity for business owners with poor credit history to access capital

Cons of SBA Loans

1. The complex Loan Application process
2. High eligibility requirements and long wait times for approval
3. Difficult to qualify for larger amounts or if your business is new or has a bad credit score
4. Require Collateral which can be difficult to provide in some scenarios
5. Strict guidelines and paperwork due to government oversight

Types of SBA Loans

There are several types of SBA loans available to meet the specific needs of small businesses. These include:

7(a) Loans

These are the most popular and flexible type of SBA loan. They’re specifically designed to help small businesses get money they need. Offering up to $5 million in funding for businesses needing funds to support small businesses.

They’re also used for a wide variety of applications. Including working capital, buying new equipment, real estate, or refinancing debt.

504 Loans

This is a SBA loan specifically for financing major fixed assets like real estate and equipment. They can be used to fund purchases of land, buildings and equipment. Asset that otherwise would require a large portion of capital upfront.

These are an attractive financing option because they offer low down payment and fixed rates for long-term loans. Plus, the larger loan amount allowed make them perfect for the expenses associated with major fixed assets. Letting you tackle capitol that may not be possible with other traditional forms of financing.

As such, these types of loans provide a viable option for business owners looking to make larger investments.

Microloans

Microloans are smaller loans, up to $50,000. They’re a useful financing option for businesses that have smaller requirements for capital.

They provide access to capital when traditional lenders may not be an option and are often more accessible than larger loans.

Microloans have longer repayment periods, lower interest rates, and offer more flexible terms. Making them ideal for businesses who cannot afford the upfront fees associated with larger loans. In addition to business with limited credit histories.

Does Everyone Get Approved For SBA?

No, not everyone is approved for an SBA loan. The Small Business Administration has strict criteria that businesses must meet in order to be approved.

Qualifications vary depending on the type of loan, but generally include:

– A credit score of at least 650 or higher

– Time in business (at least two years)

– Profitability or positive cash flow over the past two years

– Personal assets and collateral that can be used as security for the loan if needed

In addition to these qualifications, lenders may also require additional information. Including, but not limited to documents like tax returns, personal financial statements, and business plans.

It’s important to know what is required when applying for a loan. Different banks and lenders may have different requirements for you to have on hand. Having all the necessary information and documentation ready can make all the difference.

However, make no mistake. Applying for an SBA loan can be a great way to finance your small business endeavors. It’s important to understand what is required before submitting your application. In addition to what factors specific lenders will be considering when evaluating you. Especially since different lenders could have  their own requirements.

Conclusion

SBA loans can provide small businesses with much-needed funding and financing options to help them grow and succeed. While the application process may be complex, it’s worth taking the time to understand what is required in order to take full advantage of this opportunity.

While different lenders can have their own qualifications, there are some standards that most SBA loans share. Including a minimum credit score of 650, two years in business, two years of profitability, and personal collateral if needed. However, If you are prepared with all the necessary information, your chances of being approved increase significantly. After all, SBA loans provide great resources to small businesses that meet the qualifications.

Knowing all this should help guide you through the entire process of applying. Don’t hesitate to utilize these tools when preparing your applications!

Businesses are always looking to maximize capital and ensure the success of their ventures.

A business line of credit is one of the most effective financing solutions available to a business. Providing them with flexible and accessible funding that can be used for a variety of purposes. They’re also relatively easy to obtain, making them an attractive alternative to lengthy traditional methods.

Is It Hard To Get Approved For A Line Of Credit? 

The requirements for applying for a business line of credit vary from lender to lender. Generally, lenders look at a company’s financial history and credit score to determine eligibility. This means that it is essential to have all necessary documents in order before applying. Not to mention a good track record of responsible repayment habits.

Additionally, most traditional lenders may also require collateral or a personal guarantee prior. However, there are alternative methods of getting approved if you don’t meet the traditional qualifications. Working with alternative lenders, you may be able to get access to funds with far less requirements.

Always, take the time to understand what is needed and to research your options. Letting you find the best solution when you start applying for a business line of credit. Doing so will ensure that you get access to the funds you need while maintaining financial stability.

Here are 4 reasons why applying for a business line of credit may be beneficial to your company:

Consistent Accessible Funding 

A major benefit of using lines of credit is that they provide access to funds you need when you need them.

Traditional loans can be described as simple lump sums of money that are repaid once they’re used. Usually with varying degrees of interest on them.

A line of credit, on the other hand, is a revolving credit account that allows the borrower to access funds as needed. The borrower can use as much or as little of the credit line as they need. Plus, as you pay back the funds you borrowed, they become available to use again.

This makes it an ideal solution for businesses that need quick access to capital or that may have unpredictable cash flow needs.

Flexibility in Repayment 

Another benefit of lines of credit is the flexibility they provide in terms of repayment.

Traditional loans require regular payments each month. However, with a business line of credit, you only pay back what you use. You can also adjust your repayment schedule accordingly. Making it easier to manage cash flow and other business expenses.

This can help to reduce your monthly obligations while still allowing you access to the necessary funds when they are needed.

Improved Credit Rating 

By applying for a line of credit and repaying responsibly, you can make serious improvements to your credit rating.

Using a line of credit wisely demonstrates their ability to manage debt and make regular payments on time. Building a positive history with lenders, resulting in higher credit scores. Leading to more opportunities for future borrowing and investments.

Any small business owner will tell you how important a positive history is to building a good credit score. Which is crucial when applying for other forms of financing. So using a line of credit responsibility can make obtaining future funding much easier. Making lines of credit an attractive option for businesses relying on long-term planning.

Versatility 

Applying for a line of credit also gives you versatility in how you use the funds you obtained.

Businesses can better manage cash flow and easily adjust borrowing based on their current financial situation. Enabling businesses to invest in short-term opportunities that may not have been possible with a traditional loan.

Unlike other types of business financing, lines of credit can also be used for a variety of purposes. Including purchasing inventory, expanding operations, or investing in new technology. Making it perfect for businesses that need capital for growth and long-term success.

Some businesses may choose to use a business line of credit for personal expenses such as housing or travel. It is important to keep in mind that using a business line of credit for personal expenses can put your business at financial risk. Therefore, it is advised that you thoroughly research all possible consequences before using lines of credit for personal expenses.

But while research is essential, the combination of opening short-term possibilities and potential applications make lines of credit very popular among business owners.

Conclusion 

Applying for a business line of credit is an excellent way to ensure you have access to the funds you need when you need them. Not only does it provide flexible repayment terms and low-interest rates, but also helps to build your credit score and can be used for a variety of purposes. So if you are looking for a financing solution that is both accessible and versatile, applying for a business line of credit may be the ideal option for your company.

When applying for a business line of credit, you should be aware of the requirements associated with obtaining the loan and what documents will need to be prepared in advance. Additionally, it is important to understand how long the process can take before the loan is approved and funds made available.

Getting your research done upfront can make applying for a business line of credit quick and easy.

If you have any other questions on applying for a business line of credit, give us a call today.

Starting a small business is always an exciting venture. However, it takes capital to get off the ground. Many entrepreneurs will tell you how hard it is to get a small business loan with no revenue. They also may not know how to get a small business loan with no revenue.

Fortunately, there are several options for those who want easy approval business loans. Even without having any income or revenue yet. In this article, we discuss some of the methods small businesses use to get loans without income.

Why You Might Need To Get a Business Loan with No Money

The main advantage of unsecured loans is how they can provide funding without waiting for approval from traditional lenders. This is especially helpful if you have an idea that can get off the ground quickly with a bit of funding but don’t have the resources or credit required to get approved for a regular loan.

Unsecured loans also tend to have lower interest rates than other forms of loans. So if you can get approved for one without collateral, it may be the best option for you.

Is an Unsecured Loan Really Right for You

The answer to this question depends on your situation and goals. If you need the capital to get off the ground to start making money eventually, then it could be considered. However, if you don’t have a solid plan for repayment in place, it may not be the best option for you. Before taking out a business loan, make sure that it makes financial sense for your company and weighs all of the pros and cons carefully.

We found that there are 3 common reasons small businesses consider unsecured loans:

• They’re waiting to get paid. It’s commonplace for invoice-based businesses to experience cash flow issues due to long wait times between completing the job and being paid. This can be especially difficult if you’re a small business owner trying to make ends meet, so taking out a loan in order to stay afloat may be an intelligent solution for you.
• Their business is struggling to scale. When businesses experience a surge in demand, they often need to expand their resources to meet the needs of all customers. Hiring additional staff and procuring necessary equipment can be difficult if your company’s funds are already stretched too thin. Fortunately, seeking out a loan could help you keep up with the influx of new business while ensuring each customer is receiving exceptional service.
• They’ve mixed personal and business finances. Blending your personal and business finances can be hazardous to your financial security should the latter start to experience difficulties. However, keeping them separate provides a defense that will help you stand strong in difficult times and offers more chances for a potential resurgence. To achieve this, applying for a loan allows you to establish an independent fund from which all of your enterprise needs can be met without impacting on or relying upon any personal resources.

There might be other reasons for needing to get a loan with no collateral. So if you’re unsure of whether this is the best option for you, it’s worth speaking to your accountant or financial advisor before making a decision.

Click below to speak to one of our financial advisors before making any major decisions regarding financial matters.

Give Us a Call: (833) 3-ROKBIZ

How To Get A Small Business Loan With No Income

The first step in getting a small business loan with no capital is determining which type is right for you.

Many entrepreneurs don’t have the funds they need to get started. While even fewer actually know how many options they have with no income.

Fortunately, there are many options available for those who want easy approval business loans without having any revenue yet.

Here are some of the most popular ways to get a small business loan with no income:

Business Line of Credit

A business line of credit is a type of financing that provides companies with access to a flexible source of capital up to an agreed-upon limit. It allows businesses to draw funds as needed and make repayments whenever cash flow allows. Business lines of credit are typically unsecured, meaning no collateral is required, and offer more flexibility than traditional bank loans.

Equipment Financing

Equipment financing is a great way to get funding for a specific piece of equipment that you need to start or grow your business. These loans usually have short repayment terms and low-interest rates, making them more attractive than traditional bank loans.

Government SBA Loans

The Small Business Administration (SBA) offers government-backed loans to assist small businesses with their financial needs. SBA loans have low-interest rates, long repayment terms, and they can be used for a variety of purposes including starting or expanding a business.

AR Financing

Accounts receivable (AR) financing is a type of business funding that uses a company’s unpaid invoices as collateral. It allows businesses to leverage existing revenue to quickly secure flexible capital for working capital needs. AR financing provides an efficient way for organizations to secure additional working capital without taking on additional debt.

Merchant Cash Advanced

Merchant cash advance (MCA) is a business financing solution that provides companies with short-term capital based on their future sales. It provides companies with the flexibility to access quick funding in exchange for a portion of their daily card sales or future revenue. MCA is an alternative to traditional bank loans, offering a more convenient and efficient way for businesses to secure working capital without taking on additional debt.

Term Loan

A term loan is a type of loan offered by banks and other financial institutions that is typically repaid over a set period of time, usually with fixed monthly payments. A term loan is designed to provide businesses with the capital they need for short-term operations or long-term investments. The repayment terms may vary depending on the size and type of business, and often require collateral as security.

Options for A Business Loan With No Revenue in 2023

Jumpstart your business with the perfect loan, even if you haven’t brought in any revenue yet! With the options that we listed above, you can easily attain the capital necessary to gain profitability.

By doing your research and exploring all of the alternatives out there, you should be able to find one that works best for your situation. With these tips and a financial advisor, you should be well-equipped to get started on your business venture!

Contact lenders today and start building financial security for yourself and your future company.

Give Us a Call: (833) 3-ROKBIZ

Money management is crucial for any online business. This is where e-commerce accounting comes into play. 

Your digital company needs a comprehensive database of where your money is coming from, where it’s going, and how much you have. Without this knowledge, operations become unorganized and begin to fall apart.

In this detailed guide on e-commerce accounting, we’ll cover everything you need to know about the subject so you can keep your business’s finances in check and ready for success.

What Is E-Commerce Accounting?

E-commerce accounting is the documentation, organization, and analysis of all financial data associated with your online business. This includes an itemized list of all transactions, assets (liquid or otherwise), and debt accumulated to date.

This data is compiled into reports and is fundamental for all concurrent and future business operations.

Why Is Accounting Important for an E-Commerce Business?

Organizing your finances is paramount when creating marketing strategies, budgeting, and for any business function that ties to money (which is effectively ALL business functions).

To be specific:

1. Past transactions, such as consumer sales, can be used to formulate annual sales projections and determine aspects such as growth potential. 

1. Making sure you’re on top of your e-commerce accounting will allow you to make better business decisions for the future and manage where you distribute your money more effectively.

1. Keeping track of your finances accurately is also imperative for a number of legal purposes, such as taxes and liabilities.

Types of Accounting for E-Commerce

The two types of accounting for e-commerce are cash-basis accounting and accrual-basis accounting. Each has advantages and disadvantages, so which one you choose to implement is circumstantial based on your business needs.

Cash-Basis Accounting

Cash-basis accounting refers to recording transactions as they are paid out. This means that only once finances are passed from one wallet to another will a transaction be documented on a report. 

This is a much simpler, cheaper bookkeeping system than accounting on an accrual basis and is better for small businesses with no official inventory.

Of course, the numbers on business reports won’t be as accurate since cash-basis accounting fails to document liabilities, time, and other expenses accrued but not yet officially paid. 

This may lead to skewed projections and misrepresented numbers on an annual report.

Accrual-Basis Accounting

Accrual-basis accounting keeps track of all transactions as they are incurred. In other words, you document transactions as soon as you get a bill or a client promises to pay you.

This is much more accurate documentation of a business’s finances and is exponentially more efficient in formulating future projections. The caveat is that these systems are much more complex and expensive to manage. Hence, small businesses often opt for cash-basis accounting.

Basic E-Commerce Accounting Tasks

There are four basic accounting tasks for e-commerce:

• Bookkeeping
• Creating business reports
• Taxes
• Analytics

General Bookkeeping

Bookkeeping is the documentation of all business transactions that happen within your company. This includes customer sales, business expenses, and any other transferral of money that occurs to or from your business.

Creating Business Reports

Business reports are fundamental for making important business decisions, managing your business’s finances, and compiling tax returns.

The first business report you should have is an organized list of all your assets, liabilities, and equity. Additionally, you’ll want to map out a conclusive record of all expenses, profits, losses, and overall net income each year.

Filing Taxes

Having an accurate representation of all your business transactions will significantly help you at the end of the year when you file for tax returns. 

It’s also a good precautionary measure to have your tax information ready in case of any legal issues.

Analytics

Financial reports help you analyze sales trends and create marketing strategies based on prior performances. Numbers can help you better understand your company’s strengths and weaknesses, among other valuable insights.

What to Get Before You Start Accounting for Your E-Commerce Store

Before you start your e-commerce journey, make sure to have these essential items in order:

Business Tax ID

Your business tax ID, or employer identification number, is a unique, 9-digit identification number received by the IRS. This isn’t required for sole proprietors but is for all other business types.

It’s necessary for functions such as opening a business bank account and building business credit.

Business Bank Account

Your business bank account is the backbone of your financial structure. It’s where digital deals are made and where all transactions can be traced.

Sole proprietors can use personal bank accounts for their businesses but are at high risk of liabilities and lawsuits (meaning this isn’t a recommended course of action).

E-Commerce Accounting Solutions

There are many different paid e-commerce accounting software and services out there which make digital accounting easy. They may cost a bit, but they’ll save you a lot of time and effort, which more than makes up for what you spend.

E-Commerce Accounting Issues

The impact of e-commerce on accounting can be translated into several challenges. These are a few common issues, along with simple solutions:

Issue: Payments in different currencies. 

Solution: use software that can handle multiple currencies and keep track of conversion rates.

Issue: Handing taxes on third-party platforms

Solution: when using the marketplaces such as Amazon, read up on their individual tax policies.

Issue: Stocking inventory

Solution: use financial reports to deduce sales numbers and make estimates based on profits and losses.

3 Quick Accounting Best Practices To Remember in 2023

As a final note, here are 3 quick accounting practices to remember in the upcoming year when handling your finances:

• Use up-to-date, reliable bookkeeping software. You don’t just want to go for the cheapest option; go for the option that’s best for your business.
• Document ALL transactions and receipts, regardless of how small. Accuracy is the key to creating outstanding reports and ensures your business is equipt for anything.
• Keep personal and business expenses separate. Not only will this keep you safe from individual liability responsibility, but it will also give you more business banking benefits such as business credit and tax deductions.

Getting a small business loan can be a difficult process, but it doesn’t need to be.

It just requires an understanding of how the system works and how to properly present yourself as a borrower worthy of being approved for a loan. The first step of which is understanding why banks are reluctant to lend money to smaller businesses.

Why Is It Hard For Small Businesses to Get a Loan?

One of the biggest challenges for small businesses in acquiring funds from traditional lenders. Almost all of which are more hesitant to take on risk. This is primarily because newer or smaller companies lack the financial history to prove they’re capable of repaying loans.

Additionally, banks often prefer lending to businesses with established records of successfully managing their finances to reduce potential loss.

Most traditional lenders have strict criteria that must be met for a business owner to qualify for a loan. This includes having collateral or substantial cash reserves available. Business owners who do not meet these requirements may find it difficult to secure financing from conventional sources.

However, business owners do have alternative loan options available to them. Ones that will assist them in unlocking the monetary resources they require to hit their targets and timelines.

Business Loan Alternatives In 2023

When it comes to financing a small business, traditional bank loans are not always the best option. With banks often being reluctant to lend to small businesses with a lack of financial history and strict criteria, business owners often consider alternatives like loans from private lenders or government grants. In this blog post, we will explore some of these alternatives in greater detail. While also explaining how they can help you obtain the funding needed for your business venture.

Unsecured borrowers are usually more flexible than traditional bank loans, offering tailored terms and lower interest rates. Furthermore, Unsecured borrowers often take into account the potential for future growth when reviewing applications.

Types of Borrowers

The first step in considering loans for your business is understanding the differences between secured and unsecured loans and lenders. While also learning about the associated pros and cons of each one and the difficulties associated with each.

When taking out a loan, there are two general options you may have – secure loans and unsecured loans. Knowing which one to choose for yourself can make all the difference between success and failure when it comes to managing your finances properly.

Secured Loan Borrowers

Secured Loan Borrowers are borrowers who take out a loan that is backed by some type of collateral. This collateral can be real estate, equipment, inventory, accounts receivable, or any other asset that can be used to secure the loan. In the event of default on the loan, the lender has the right to seize and sell this collateral in order to recover their losses.

When considering secured loans for small businesses, traditional lenders take extra care to understand how much risk they are taking. The lender will have the right to seize their collateral and potentially force them into bankruptcy if payments are not made. Additionally, secured loans typically come with higher interest rates than unsecured loans due to the increased risk for lenders.

In order to qualify for a secured loan, borrowers will typically need to have good credit and a strong business plan with proven financial projections and stability. The borrower must also provide documentation proving ownership of their collateral as well as proof that it is worth at least as much as the amount of money they are borrowing.

Unsecured Loan Borrowers

Loans without collateral are a great option for many small businesses that may not have the time or resources to put up assets as collateral. If you’re interested in exploring this type of financing for your business, we can help. Our team of Business Financing Advisors will work with you to find the best financing options for your business. Apply today and let us help you grow your business!

Business lines of credit is financing that provides small business owners with access to capital without the need for installment payments or collateral. It works like a credit card, where the borrower can draw money up to an approved limit. Which the borrower then repays over time.

Government SBA Loans have also become increasingly popular as a way of financing small businesses since they do not require repayment. These loans can be used to fund various aspects of setting up or running a business, such as marketing activities, equipment financing, or staffing costs.

Small Business Loan Approval Factors

All lenders consider a variety of factors when evaluating if you are creditworthy. They look at personal credit history, business financials and industry experience.

They also look at how much debt your business already has and how much of the loan amount you need. Banks look at how well your business can handle additional debt and how quickly they will see their money back if you are approved for a loan.

Credit Score

When you are submitting a loan application for your small business, knowing and presenting your credit score can be essential to influencing lenders’ decisions. Your credit score is a measure of your financial health, and it gives lenders an idea of how likely you are to repay a loan.

Annual Revenue

When lenders assess your loan application, they will take into account the amount of revenue you make annually. Lenders want to see that your business is generating enough revenue to cover the cost of the loan and still have money left over.

Debt-to-Income Ratio

Your debt-to-income ratio is another key factor that lenders will consider when evaluating your loan application. This ratio measures the amount of debt that you have relative to your income.

Personal Guarantee

A personal guarantee is another common requirement for small business loans. Should you fail to repay your loan, the lender can take legal action and seize any of your personal possessions – from cars to homes – as a form of compensation.

Business Plan

When you apply for a small business loan, lenders will want to see evidence that you have a well-thought-out business plan. Your business plan should include information on your target market, marketing strategy, financial projections, and plans for how you will use the loan proceeds.

Conclusion

In conclusion, how hard it is to get a small business loan depends on many factors. In addition to understanding how lenders assess risk and evaluate your financials, you should also consider alternative financing methods such as business lines of credit or equipment financing. With the right strategy, you can secure the funding you need to grow your business.

This article has provided an overview of how hard it is to get a small business loan. By understanding the factors lenders consider in their decision-making process and researching alternative financing options, you can increase your chances of being approved for the loan you need to succeed. With smart financial decisions and determination, you can take your business to new heights! Good luck on your journey!

When a business sells a product, the payment terms can be lengthy and challenging to manage. Also, consider the time it takes to ship and deliver it abroad. Often, it takes time to receive payment. Extra energy and time are needed to check customer credit worthiness and obtain references.

Almost all sales processes get extended. Even with proper financial and time planning and management, exporting products can impose a financial strain on any business. The difference between the success and failure of a  transaction depends on the time it takes to receive payment.  As such, export finance becomes a crucial factor for exporters.

What is Export Finance?

Export finance involves funding exporters to streamline their business operations in the market. Simply put, it provides cash flow assistance to exporters to facilitate their products and other transaction needs, such as working capital.

International exporters need export finance when they want to guarantee the affordability of their products with the guarantee of receiving payment on time while sending goods abroad.

Types of Export Finance

Let’s look at four types of export financing methods, shall we?

Pre-shipment Finance

This export finance type is provided to businesses for purchasing and processing raw materials into finished products. It remits when businesses require funds before shipments of products.

Packing Credit Finance

You can get pre-shipment finance against the order you receive from an importer in terms of packing credit. Once funds come in from buyers abroad, the amount of the packing credit can be modified.

Post Shipment Finance

This type of export finance gets provided to exporters after shipment. The importer issues an invoice to pay the amount. However, this can take up to 3 to 6 months. The exporter also needs working capital to cover this period. Post Shipment Finance allows them the ability to do this.

Finance Against Collection of Bills

Exporters can apply for a loan against the collection bills to obtain financing to export to different countries. The banks usually agree to finance export bills, which will be repaid by guaranteeing companies if a default occurs.

Benefits of Export Finance

Here are the top benefits of export finance:

It’s Accessible to Everyone

There are many financial arrangements involved with export financing. Sometimes, pre-shipment finance can be used to help a company raise money to fulfill an order. This method often gets done long before invoices can be sent. On the contrary, export factoring and invoice discounting depend on issued invoices. They can be designed to expedite the payment as well as guarantee it.

These systems are all cash flow financing and do not require a company to have a good credit rating or be able to provide security. The international purchase order is a guarantee to the finance provider. The exact amount of this depends on the agreement. Export finance is therefore available to any person with an overseas buyer.

The Funding Increases as Quickly as Your Business Activity

Export finance has another notable benefit to companies: it tells you more about your prospects. It can help increase your funds as quickly as the order book if you want to expand operations beyond borders.

An innovative fintech provider can help you use export finance with supply chain finance and import finance to make sure you always have enough money available to pay for your orders. You can expand faster and get more funds, so you are never held back by a lack of funds.

It Reduces Export Risks

The risks involved in exporting can be overwhelming for a first-timer and headaches for experienced business leaders. Currency fluctuation is one of these risks. Non-payment or disputes are another. These risks can be mitigated by using export finance, allowing you to focus on selling and making your product.

Factoring and invoice discounting are two examples of export finance options. This funding arrangement is called ‘nonrecourse.’ You can also get insurance as an option. The usual practice is for the finance provider to take on the forex risk.

Do Not Pay For Finance You Do Not Want

Flexible fintech providers allow you to choose the time and date you wish to borrow finance for an export order. If you don’t require the money, there is no need to forward the invoice or order. If you do need to pay the money, it will be for a one-time fee.

It’s easy. There are no fees or interest, and the finance gets paid automatically when your customer settles their bills. Contrary to a bank loan, you will never pay interest or account fees for the money you aren’t using.

It Improves Your Cash Flow Management

Late payments in B2B transactions can cause cash flow problems for many companies. You can send an invoice after you deliver a product. But, you may have to wait for the money for 30 – 90 days. 

With export orders, this gap is even more significant, especially when considering shipping times. Flexible export finance lets you choose the time you receive your payment and allows you to raise substantial amounts of working capital.

What is the Importance of Export Financing

Exporters can get financing in different stages of their business cycles. Businesses most commonly use these financing options during pre-shipment or post-shipment.

This funding option can also be useful in the event of suspending export subsidies and collecting invoices throughout a working capital cycle. Businesses generally choose Export finance for the following reasons:

• To establish a new export-based enterprise.

• To expand your business.

• To meet the working cash requirement.

• To keep production undisturbed.

Export Financing Companies in 2022

Take a look at some export financing companies active in 2022:

Standard Chartered Bank

In 2021, one of the leading producers of steel worked with Standard Chartered based in Hong Kong to offer the first backward LC structure using essDOCs. This was the very first cross-border Rmb-denominated blockchain in the world.

We.trade

Distributed ledger’s ability for participants to trade transactions to come to a consensus is making it easier to trade internationally with greater reliability. We.trade won the award for Best DLT Platform to Trade Finance. 

The platform was commercially launched in 2019 and is the world’s first enterprise-grade blockchain-enabled trading finance platform. It connects buyers, sellers, banks, and logistics companies in an open network that facilitates cross-border trade.

We.trade is licensed by 16 banks in 15 countries.

Commerzbank 

Commerzbank offers trade finance of over 50 billion euros in up to 50 currencies in 150 markets. The company has held onto its reputation through the execution of modern tech that enables it to process billions of euros annually. It successfully funded an international transaction with a Turkish bank through Marco Polo Network that uses DLT.

Export Financing Example in 2022

Trade finance offers many sources of export financing, such as invoice factoring or forfeiting, accounts receivable and open accounts factoring, consignment purchase, export letters of credit, and accounts receivable factoring.

Summary

Export finance is a way for businesses to grow without the need to make other investments such as equity. This could mean giving up a portion of your company or having additional shareholders and could restrict your ability to grow.

Export finance facilities can be used independently of existing bank facilities. They are usually available to people with existing overdrafts and loans. Letters of Credit and other export finance options, like Letters of Credit may not be able to get in the way of existing bank facilities. They also don’t always appear on Balance Sheets.