What Business Owners Need to Know About Using Syndicates for Funding

Working capital is a make-or-break concern for small businesses. However, traditional business lending can be problematic for business owners. The application and approval process is lengthy, and the terms can be complex. Because of the extended approval time, your hands could be tied as you wait for the working capital need to come in. Business loan syndicates are an alternative that can help you get the funding you need without the red tape of a bank loan. If you’re considering working with a business syndication service in New York, NY, for a small business loan, here is what you need to know. syndicate - banking

How is syndicate lending different from a bank loan?

Banks are only one way that businesses get the operating capital they need. Although bank loans can be beneficial in some cases, there are drawbacks. Banks require a lengthy application for loans, and their approval standards are stringent. As a business owner, you could be waiting for days for your loan to be processed, only to find out that the bank won’t approve your loan or that they want collateral to secure your loan. The repayment of bank loans are determined based on the total loan amount plus interest and must be made regardless of your sales. Syndication loans are different. Typically, a loan syndicate offers merchant cash advance deals based on your sales history. The approval process happens quickly, because there is no need to do a thorough credit check, and repayment is made through a percentage of each of your sales until the loan is repaid.

What are the benefits for business owners?

Merchant cash advances from lending syndicates are ideal for business owners for the ease of securing the loan and making repayments. They are especially ideal for businesses that need working capital but are viewed as high risk by traditional lenders. Repayment can be structured as a percentage of receipts, which simplifies the process and ties lending to earnings. Business owners can also avoid the risky proposition of secured loans and reduce the risk of missing a significant opportunity because of the application processing time at banks.

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