Business

A 5-Step Guide To Getting A Startup Business Loan

(CTN News) – Startup businesses have a harder time getting business loans than established businesses, but it’s still possible. The best way for new business owners to improve their approval odds is to choose the right type of financing, understand their credit scores, and identify the most competitive lending options.

You can get a startup business loan by following these steps:

1. Determine what kind of loan you need

Banks and credit unions are among the most popular sources of financing for small businesses. The good news is that several financing options are available to startups. There are several types of startup business loans, including:

1. Online term loans: Online and traditional lenders generally offer a term loan, which involves a bank extending a lump sum of cash, repaid over a set period at a set interest rate. Various small business loans are available, with annual percentage rates (APRs) ranging from 9% to 12% and maximum loan limits ranging from $250,000 to $500,000. However, startup owners may not qualify for the highest loan amounts and most competitive interest rates.

2. Business lines of credit: In a business line of credit, a lender extends funds up to a certain amount, and the business owner can access the funds as needed. A monthly interest charge is only applied to the portion of the credit line accessed during that month. Furthermore, the borrower can access funds repeatedly during the draw period after making payments.

3. SBA 7(a) loans: The 7(a) loan programme is administered by the Small Business Administration (SBA) and provides business loans of up to $5 million to eligible applicants. Interest rates range from 2.25% to 4.75% plus a base rate, and funds can be used to cover working capital, equipment purchases, and business expansion expenses.

4. SBA Microloans: The Small Business Administration offers microloans up to $50,000 to eligible business owners. Typically, small businesses owned by minorities and women and located in disadvantaged areas are eligible for loans. Lenders may offer repayment terms of up to six years at interest rates ranging from 8% to 13%.

5. Asset-based financing: Startup owners can borrow against valuable assets like inventory, machinery, equipment, accounts receivable, and real estate with asset-based financing. Due to their lower risk, these loans usually have more attractive terms than others. Secured financing, however, means that collateral can be repossessed if the borrower defaults.

2. Make sure your business and personal credit scores are up to date

Lenders’ assessment of an applicant’s credit score serves as a risk assessment tool. A higher credit score increases the likelihood that an applicant will make payments promptly; consequently, approval probabilities increase. Generally, credit scores for businesses become available between six months and one year into their existence; therefore, it is possible that startups, which are new businesses, do not yet possess one.

However, loans are frequently personally guaranteed, which means the borrower undertakes to repay the debt with personal funds if the business fails to do so. As a result, lenders also consider the personal credit score of the applicant or business owner. Before submitting a loan application, assess your chances of approval and adequately prepare by procuring copies of your business credit reports and verifying your credit score.

3. Preparation and gathering of required documents

Each lender has its specific document requirements for business loans. But, to evaluate and confirm the legitimacy of a company and its applicants, most lenders rely on a few key papers. Financial documents such as bank statements, accounts receivable, credit card sales, and outstanding bills from the last four months are typically required by lenders, and tax returns spanning at least two years are also common requests.

Another way for a startup founder to increase their chances of acceptance is to write a detailed business plan. Lenders may see this as proof that the company can handle its debts in the future based on their projected income and expenses. A lender may also ask to see your banking details for direct payment and copies of any relevant business licences or registrations.

4. Identify and compare lenders

You might be able to get a startup loan from more than one lender, depending on your individual and company circumstances. When evaluating lenders, keep the following in mind to find the best startup company loans:

Annual percentage rates: For startup business loans, APRs start around 9%, but they can be higher, and for highly qualified applicants, they can even be lower. To find out the APR for each lender, visit its website or contact a customer support representative.
Fees and other costs: To cover the expenses of processing paperwork and confirming application information, business lenders typically impose origination fees that vary between three and five per cent of the loan amount. There are prepayment penalties for borrowers who choose to pay off their loans ahead of schedule; for those who want to pay late, there are late fees. To stay competitive, some lenders remove these fees, which might raise the total cost of borrowing.
Lender reputation: Read evaluations written by current and former borrowers to get a feel for a lender’s reputation, even if they seem solid on paper. Also, talk to other people in your business network to find out what they think about the bank. You should consider going with a different lender if you encounter any warning signs, such as bad experiences with customer service, throughout your investigation.

5. Submit Your Application

After deciding on a lender, it’s important to study their application process and gather all the necessary paperwork. Check with your potential lender to see if you can apply over the phone, online, or in person; the application and underwriting processes differ widely. A lender representative may contact you after you apply to ask for proof of collateral or more financial documents.

Strategies for Obtaining a Startup Business Loan Despite Poor Credit

To secure a company loan, even with bad credit, you must first show that you have a history of successful financial management. However, the credit histories of both the owner and the company are still typically considered by lenders.

Here are a few things you can do to boost your chances:

Improve your credit. Check your credit report for inaccuracies. Pay down your credit card debt and focus on other ways to increase your credit score quickly.
Look for SBA lenders. Some SBA partner lenders offer certain SBA loans to businesses that haven’t yet launched, such as microloans.
Seek out nonprofit assistance. Volunteer-run programmes like a local Small Business Development Center or SCORE offer one-on-one assistance for new entrepreneurs and may be able to give you more specific, individualised advice.
Take advantage of special programs. If you’re part of an underrepresented group, such as a minority or rural resident, you may be eligible for special startup business loan programmes.
Apply through a CDFI. These financial institutions focus on underserved communities and may be better aligned to help with your business and personal lending needs.

Pros and Cons of Startup Business Loans

As you’re considering taking on debt for your new business, consider these points.

Pros

Maintain ownership of your company
Predictable monthly payments with fixed-rate loans
Spread the cost of starting a business over several years
Improve your credit score if you make on-time payments

Cons

It may be difficult to qualify for
Loan costs from fees and interest may be very high
May need to provide loan collateral
High loan payments can put your business at risk of failure
You may need to repay the loan from your funds if the business fails

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Business

PepsiCo Reduces Revenue Projections As North American Snacks And Key International Markets Underperform.

(VOR News) – In the third quarter of this year, Pepsi’s net income was $2.93 billion, which is equivalent to $2.13 per share. This was attributed to the company.

This is in stark contrast to net income of $3.09 billion, which is equivalent to $2.24 per share, during the same period in the previous year. The company’s earnings per share were $2.31 when expenses were excluded.

Net sales decreased by 0.6%, totaling $23.32 billion. Organic sales increased by 1.3% during the quarter when the effects of acquisitions, divestitures, and currency changes are excluded.

Pepsi’s beverage sales fell this quarter.

The most recent report indicates that the beverage and food sectors of the organization experienced a 2% decline in volume. Consumers of all income levels are demonstrating a change in their purchasing habits, as indicated by CEOs’ statements from the previous quarter.

Pepsi’s entire volume was adversely affected by the lackluster demand they encountered in North America. An increasing number of Americans are becoming more frugal, reducing the number of snacks they ingest, and reducing the number of times they purchase at convenience stores.

Furthermore, Laguarta observed that the increase in sales was partially attributed to the election that occurred in Mexico during the month of June.

The most significant decrease in volume was experienced by Quaker Foods North America, which was 13%. In December, the company announced its initial recall in response to a potential salmonella infection.

Due to the probability of an illness, the recall was extended in January. Pepsi officially closed a plant that was implicated in the recalls in June, despite the fact that manufacturing had already been halted.

Jamie Caulfield, the Chief Financial Officer of Pepsi and Laguarta, has indicated that the recalls are beginning to have a lessening effect.

Frito-Lay experienced a 1.5% decline in volume in North America. The company has been striving to improve the value it offers to consumers and the accessibility of its snack line, which includes SunChips, Cheetos, and Stacy’s pita chips, in the retail establishments where it is sold.

Despite the fact that the category as a whole has slowed down in comparison to the results of previous years, the level of activity within the division is progressively increasing.

Pepsi executives issued a statement in which they stated that “Salty and savory snacks have underperformed year-to-date after outperforming packaged food categories in previous years.”

Pepsi will spend more on Doritos and Tostitos in the fall and winter before football season.

The company is currently promoting incentive packets for Tostitos and Ruffles, which contain twenty percent more chips than the standard package.

Pepsi is expanding its product line in order to more effectively target individuals who are health-conscious. The business announced its intention to acquire Siete Foods for a total of $1.2 billion approximately one week ago. The restaurant serves Mexican-American cuisine, which is typically modified to meet the dietary needs of a diverse clientele.

The beverage segment of Pepsi in North America experienced a three percent decrease in volume. Despite the fact that the demand for energy drinks, such as Pepsi’s Rockstar, has decreased as a result of consumers visiting convenience stores, the sales of well-known brands such as Gatorade and Pepsi have seen an increase throughout the quarter.

Laguarta expressed his opinion to the analysts during the company’s conference call, asserting, “I am of the opinion that it is a component of the economic cycle that we are currently experiencing, and that it will reverse itself in the future, once consumers feel better.”

Additionally, it has been noted that the food and beverage markets of South Asia, the Middle East, Latin America, and Africa have experienced a decline in sales volume. The company cut its forecast for organic revenue for the entire year on Tuesday due to the business’s second consecutive quarter of lower-than-anticipated sales.

The company’s performance during the quarter was adversely affected by the Quaker Foods North America recalls, the decrease in demand in the United States, and the interruptions that occurred in specific international markets, as per the statements made by Chief Executive Officer Ramon Laguarta.

Pepsi has revised its forecast for organic sales in 2024, shifting from a 4% growth rate to a low single-digit growth rate. The company reiterated its expectation that the core constant currency profitability per share will increase by a minimum of 8% in comparison to the previous year.

The company’s shares declined by less than one percent during premarket trading. The following discrepancies between the company’s report and the projections of Wall Street were identified by LSEG in a survey of analysts:

SOURCE: CNBC

Business

Old National Bank And Infosys Broaden Their Strategic Partnership.

(VOR News) – Old National Bank, a commercial bank with its headquarters in the Midwest, and Infosys, a firm that specializes in information technology, have recently entered into a strategic expansion of their link, which has been in place for the past four years.

This expansion is more likely to take place sooner rather than later, with the likelihood being higher.

For the purpose of making it possible for Old National Bank to make use of the services, solutions, and platforms that are offered by Infosys, the objective of this expansion is to make it possible for the bank to transform its operations and processes through the application of automation and GenAI, as well as to change significant business areas.

This lets the bank leverage Infosys’ services, solutions, and platforms.

Old National Bank Chairman and CEO Jim Ryan said, “At Old National, we are committed to creating exceptional experiences for both our customers and our fellow employees.”

This statement is applicable to Old National Bank. Infosys is carefully managing the business process innovations that it is putting us through, putting a strong emphasis on efficiency and value growth throughout the process to ensure that it is carried out efficiently.

This is a routine occurrence throughout the entire operation. Because of Infosys’ dedication to our development and success, we are incredibly appreciative of the assistance they have provided.

Old National has been receiving assistance from Infosys in the process of updating its digital environment since the year 2020, according to the aforementioned company.

Ever since that time, the company has been providing assistance. The provision of this assistance has been accomplished through the utilization of a model that is not only powerful but also capable of functioning on its own power.

Infosys currently ranks Old National thirty-first out of the top thirty US banks.

This ranking is based on the fact that Old National is the nation’s largest banking corporation.

It is estimated that the total value of the company’s assets is approximately fifty-three billion dollars, while the assets that are currently being managed by the organization are valued at thirty billion dollars.

Dennis Gada, the Executive Vice President and Global Head of Banking and Financial Services, stated that “Old National Bank and Infosys possess a robust cultural and strategic alignment in the development, management, and enhancement of enterprise-scale solutions to transform the bank’s operations and facilitate growth.”

This remark referenced the exceptional cultural and strategic synergy between the two organizations. Dennis Gada is the one who asserted this claim. This was articulated explicitly concerning the exceptional cultural congruence and strategy alignment of the two organizations.

We are pleased to announce that the implementation of Infosys Topaz will substantially expedite the transformation of Old National Bank’s business processes and customer service protocols. We are exceedingly enthusiastic about this matter. We are quite thrilled about this specific component of the scenario.

Medium-sized banks operating regionally will continue to benefit from our substantial expertise in the sector, technology, and operations. This specific market segment of Infosys will persist in benefiting from our extensive experience. This phenomenon will enable this market sector to sustain substantial growth and efficiency benefits.

SOURCE: THBL

Business

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

The largest regulated water and wastewater utility company in the United States stated Monday that it had been the target of a cyberattack, forcing the company to halt invoicing to consumers.

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

American Water, based in New Jersey and serving over 14 million people in 14 states and 18 military facilities, said it learned of the unauthorized activity on Thursday and quickly took precautions, including shutting down certain systems. The business does not believe the attack had an impact on its facilities or operations and said employees were working “around the clock” to determine the origin and scale of the attack.

water

The corporation stated that it has alerted legal enforcement and is cooperating with them. It also stated that consumers will not be charged late fees while its systems are unavailable.

According to their website, American Water operates over 500 water and wastewater systems in around 1,700 communities across California, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia.

SOURCE | AP