Business Loans for Startups - Planet Financial
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Small-company financing, also referred to as startup financing (especially when funding a new business) or franchise financing, refers to the methods used by a business owner to secure capital to support current or future business operations, whether starting a new venture, acquiring an existing one, or injecting funds into an existing business.

Merchant Cash Advances

Merchant cash advances (MCAs) are issued based on the transaction history of a point of sale (POS) system, such as a credit card machine. As a result, MCAs are largely available to enterprises in the retail industry, where POS systems are widely used.

MCA repayment structures are variable, with no predetermined repayment period. The borrower pays back a percentage of their income on a weekly or monthly basis, depending on the loan terms. When the business generates more income, the borrower repays a greater share of the loan, whereas lower earnings result in lesser repayments.

Equipment/Asset Finance

Equipment and asset finance packages hold the machinery or equipment being acquired as collateral. Because the equipment has inherent value, the lender may seize it as an asset if the borrower fails to repay the loan.

This sort of financing is sometimes referred to as a "lease-to-own" option.

New Sources of Debt and Equity Financing

With the decrease of traditional small business finance, alternative methods of debt and equity capital, such as crowdsourcing and peer-to-peer lending, have gained popularity. Banks are generally reluctant to lend to small firms unless they have collateral and can show continuous revenue. Private money lenders and angel investors are frequently a better option for start-ups or enterprises that have not been in operation for more than a year and lack collateral. These investors are more prepared to take on risk because they understand the possible benefits. Private lenders can also make speedier decisions because their approvals entail fewer levels of management than banks.

Planet Financial Business Loans for Startups

Planet Financial in Brampton provides equity loans, which enable businesses to acquire funding by leveraging the value of their assets. These loans are usually based on the equity a company has in real estate, equipment, or other valuable assets. Planet Financial offers flexible terms to assist businesses in obtaining capital for growth, expansion, and other purposes. They emphasize individual service and work closely with clients to find the best financing solution for them. Their equity loan options are intended to help firms at different stages of development.

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FAQ: Business Loans for Startups - Planet Financial

A business loan for startups is borrowed capital that new businesses use to cover startup expenses such as equipment, inventory, hiring employees, and marketing. These loans are generally harder to secure due to the higher risk involved but are essential for getting a business off the ground.

- Term Loans: Lump sum paid back over a fixed term.
- Lines of Credit: Flexible borrowing limit for ongoing expenses.
- Equipment Financing: Loan for purchasing business equipment.
- Invoice Financing: Advances based on outstanding invoices.
- Merchant Cash Advances (MCA): Based on the business's POS system transaction history.
- Equity Financing: Raising capital by selling shares in the business.

To qualify for a startup business loan in Canada, you typically need: - A solid business plan. - A personal credit score of at least 650. - Proof of revenue or sales (if applicable). - Some form of collateral (for secured loans). - Demonstrated potential for growth and business viability.

Interest rates for startup business loans in Canada typically range from 5% to 20%, depending on the type of loan, the lender, and the risk profile of the business. Higher interest rates may apply if the business is considered high-risk.