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SHOPPE BLACK and Lendistry Partner to Provide Black Entrepreneurs with Greater Access to Capital

shoppe black

It is with great excitement that SHOPPE BLACK announces its partnership with Lendistry, the country’s largest African American-led deployer of capital.

Our shared vision of empowering Black business owners and connecting them with vital resources is at the heart of this collaboration. Lendistry has proven to be a reliable lending partner, always putting the best interests of Black entrepreneurs first and supporting their financing needs to help them scale through the growth stage.

Through our partnership with Lendistry, we aim to educate our platform’s loyal business owner audience about the innovative financial products Lendistry offers and encourage them to apply. This will involve featuring Lendistry’s information and application links in our online content, and newsletters.

We will also be cohosting webinars that will offer valuable insights, strategies, and practical guidance to further empower business owners.

Together, we are determined to uplift and support Black entrepreneurs in every way possible. By combining our expertise, reach, and commitment, we are confident that we will make a significant impact in fostering economic growth and prosperity within the Black business community.

“SHOPPE BLACK has been a valued ally behind the scenes, so we are excited to make our partnership official,” says Everett K. Sands, CEO of Lendistry. “Lendistry’s team has lived the mission and understands the challenges and strengths in our communities. It’s important for business owners to know who is in their corner, and who can give them a fair chance at the capital they need to grow, so we appreciate SHOPPE BLACK helping us reach their large and engaged audience.”

“At SHOPPE BLACK, we believe that Black entrepreneurs are a vital part of our economy, and we’re committed to doing everything we can to support their success,” says Tony O. Lawson, CEO and Co-Founder of SHOPPE BLACK. “That’s why we’re thrilled to partner with Lendistry as a part of our ongoing efforts to provide greater access to the capital that these entrepreneurs need to grow their businesses, create jobs, and build wealth within our communities.”

As committed partners in an expanding and equitable ecosystem, we are dedicated to enhancing our offerings and capabilities for the betterment of underserved small business owners.

Entrepreneurs can learn more about this partnership and apply for a loan here.

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Published on
6 mins read

Black Led Fintech, Lendistry Has Dispersed $9 Billion in Funding for Small Businesses

lendistry

Lendistry is a Black led fintech and technology-enabled small business and commercial real estate lender with Community Development Financial Institution (CDFI) and Community Development Entity (CDE) certification.

During the COVID-19 pandemic, Lendistry provided Paycheck Protection Program (PPP) loans to small businesses in all 50 states, becoming the #8 PPP lender in the country in 2021.

Everett K. Sands, the CEO of Lendistry, has over 20 years of experience in lending, including stints at both national and community banking institutions.

Through his leadership, Lendistry has reached 2nd place ranking among SBA Community Advantage lenders nationwide, received membership to the Federal Home Loan Bank of San Francisco, developed proprietary technology, and closed several strategic partnerships with over 34 community and national banks.

In this interview, Everett discusses the creation of the company, its growth through strategic partnerships, and future plans to expand its offerings to better support small businesses.

What gaps did you create Lendistry to fill? 

There are many gaps in the finance industry that historically make it harder for minority-owned businesses to access capital, and they’re still happening today. Bank consolidations have caused community banks, which are more likely to provide loans in lower amounts than a growing business is looking for, to close their doors.

Underserved communities don’t have bank locations in their neighborhoods, and even if they did, today’s business owners are too busy running their businesses during bank hours to go in for help applying. Systemic biases still cause minorities and women business owners to be seen as riskier, making them less likely to get approved even if they can find a bank to partner with. Lendistry was created to overcome all of these barriers.

We use technology to make our process accessible to anyone and to empower our team to walk applicants through the process. We set out to meet business owners where they are—online—and offer loans in lower amounts with underwriting processes that give them a fair chance, while also providing a community bank experience.

How has the business lending space evolved since you started your company? 

Credit profile (the business’s ability to repay, handle various market conditions, the repayment history of the owner and the management team) used to be the main deciding factor in lending. It’s still important, but the factors that traditional financial institutions are making are also based on operational efficiency.

Is the business run in a cost-effective way, and are its processes free of waste and redundancy? They ask those kinds of questions in the lending process now more than they used to.

Describe Lendistry’s growth over the past few years. How much have strategic partnerships played a role in that growth? 

We started in 2015, and in early 2020, we were a small team of about forty people in two offices in Southern California. Because we’re not a bank and we don’t take deposits, strategic partnerships are essential to deploying capital. At that time, Lendistry had established itself in CA as a partner for financial institutions that wanted to make sure their capital was reaching underserved communities in an impactful way.

When the pandemic started, that business model was ideal for responding to disruption. Strategic partnerships with banks and government agencies made it possible for us to step up and provide a rapid solution, especially with PPP and grant programs.

We have now funded over 600,000 small businesses and provided over $9 billion in funding. We have offices and local presences in NY, MD, TX, and a team of hundreds ready to help businesses from coast to coast.

What are your future plans for the company? 

The gaps I mentioned earlier can’t be filled just by providing small business term loans. Small businesses are evolving ahead of the financial industry, and predatory lenders are doing a good job of keeping up and making themselves look like the only option, which only holds businesses back, because after their quick funding comes unreasonable terms. So, at Lendistry our goal is to expand our offerings of lending products and be a responsible alternative in as many lending spaces as possible.

What advice do you have for other fintech founders? 

Focus on the needs of your clients and customers as the basis for your technology. This involves listening to them, paying attention to how they work, and building your tech to solve their problems.

Don’t try to convince your clients and customers that they need to adopt your technology and change their processes and structures. Lendistry is a customer-centric ecosystem, which is how we’re able to grow and build trust.

by Tony O. Lawson

Follow SHOPPE BLACK on Facebook, Instagram, Twitter, and Linkedin

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Published on
4 mins read

Documents to Have Ready before Applying for a Loan

loan

When you’re applying for a small business loan, having your financial records in order shows the lender that you are a trustworthy and accountable borrower.

If these documents aren’t in order, or if you’ve submitted the incorrect information, it could lead to your business being denied necessary funding.

In this post, we outline the documents that are frequently requested by traditional small business lenders and how you can stay prepared for the loan application process.

A Clear Strategic Plan

To secure a loan, most financial institutions require you to submit a comprehensive business plan along with the loan application. It serves as a short introduction to who you are and what your company is all about.

The business plan should include a complete set of projected financial statements, including profit and loss, cash flow, and balance sheet. This should reflect a calculated strategy that can communicate to the lender the company’s aims, mission, and how you plan to meet all of your goals.

Business & Personal Credit Scores

When you submit a business loan application, a lender will typically review both your personal and business credit to assess the risk you pose. Having a good business credit score and business credit history makes it easier to get financing for your business.

Otherwise, you may have to rely on personal savings and personal credit cards. Moreover, a good personal credit score can increase your chances of approval and securing a lower interest rate, whereas a bad personal credit score can make the whole process more difficult.

One of the most popular business credit scoring models—Dun & Bradstreet (D&B) PAYDEX—ranges from 0 to 100. A good score ranges from 80 to 100; a bad business credit score ranges from 0 to 49. Experian is also a common scoring model with FICO scores ranging from 300-850.

Income Tax Returns

Your business’ income tax returns illustrate how your business has performed in the past. So most loan programs require applicants to submit the last two to three years of signed personal and business federal tax returns.

If your business is new, you should ask your accountant to help you create a projection of what your tax returns might look like in the upcoming year. Your personal tax returns may also be requested.

Income Statement

Income statements are especially useful for small business lenders who want to understand how a business has performed over the past year(s). Even if your expenses exceed your revenues—which is often the case for newer businesses—all lenders will want to view your income statement.

Balance Sheet

An income statement is a historical report, whereas your balance sheet is a glimpse of your current financial situation. A balance sheet will represent your business’s financial components, such as:

  • Current Assets & Liabilities
  • Sources of Equity
  • Accounts Receivable

Each of these figures is very important to commercial lenders. If your liabilities exceed your current assets, you may face challenges securing a small business loan with a low-interest rate.

Bank Statements

Small business lenders may want to review your business’s bank account statements during the application process. It’s important that your financial statements reflect the fact that your business is actively earning revenue while managing expenses in a healthy way.

 

Let Lendistry guide you through the business loan process. If you want to learn more, call 888-594-7270 or contact them online!

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4 mins read

Sole Proprietors: Steps to Take Before Hiring Your First Employee

sole proprietor

A sole proprietorship is the first step for many businesses and is the simplest of all business entities to set up. It is not a business entity per se, since no legal setup is involved.

Usually, such businesses have one owner, although in some cases, spouses may jointly own a business. In a sole proprietorship, the owner is responsible for all liabilities.

However, being a sole proprietor doesn’t mean you have to handle everything by yourself. If you find that your business is expanding, you will likely need to hire help. Before you do, here’s what you should know.

1. Get an EIN

Prior to hiring employees, you must get an EIN or Employer Identification Number. You use this number on tax returns and other tax documents. To get an EIN, you must file the SS-4 form with the IRS.

2. Register with the State Labor Department

Once this step is complete, you can pay state unemployment compensation taxes. These payments go to your state’s unemployment compensation fund, which provides short-term relief to workers who lose their jobs. You can visit the Department of Labor’s website for a list of state unemployment insurance tax agencies.

3. Explore Insurance Options

An employee may injure himself while on the job, and you could be on the hook for their medical expenses and lost wages. Therefore, before hiring employees, it’s important to secure workers’ compensation insurance. Purchasing insurance right away can protect your business from lawsuits and encourage continued growth.

4. Set up a Payroll System for Taxes

As an employer, it’s necessary to withhold taxes from your employees’ paychecks to give to the IRS. You will also have to make Social Security and Medicare tax payments to the IRS. An automated payroll system can help you avoid costly errors and fines at tax time.

5.   Get the Paperwork Ready

Hiring employees involves a lot of paperwork, which is better done sooner rather than later. For each new hire, you must fill out Form I-9 for the U.S. Citizenship and Immigration Services (USCIS) and Form W-4 for the IRS.

Have each employee fill out IRS Form W-4, which tells you how many allowances they are claiming for tax purposes so that you can withhold the correct amount of tax from their paychecks. You can find this form at https://www.irs.gov/.

You should ask employees to fill out a new W-4 form each year if they want to change their allowances.

6. Consult an Attorney to Comply with Employment Laws

Consulting a business attorney may be the most important step that you should consider. It can help you avoid many pitfalls, like failing to meet state or federal standards that can lead to massive fines, failing to comply with all relevant statutes and employment laws, etc. Such mistakes can possibly bankrupt your business. Consulting a business attorney can protect your business and create a safe work environment for your employees.

Being a sole proprietor can be challenging, but you don’t need to do it alone. You can get support and technical assistance from the experienced team at Lendistry.

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Published on
7 mins read

Follow These 9 Tips for a Successful Home Based Business

home based business

In today’s connected world, it is not always necessary to have a big space or a warehouse to run a business. Thanks to the internet, all you need to run a business these days is just one small spare room.

Since more and more people are using remote strategies to pursue entrepreneurship with their headquarters at home, home based businesses are currently on the rise.

But again, just with any other business, starting a home based business comes with its own set of complications. From advertising to zoning, there is always something that will require your attention. Though this type of business allows you to run operations from your comfort zone, one of the biggest challenges faced by home-based entrepreneurs is maintaining professionalism at all times.

Here are some tips to keep you focused on your quest to make your home-based business a success and reap maximum benefits:

Determine If Your Ideas Are Appropriate for a Home Based Business

Home-based businesses are in vogue right now, but not all home-based businesses are guaranteed to work out. Starting a business out of your home requires you to consider a variety of factors, including your location, zoning, legal restrictions, licensing, work style, personality, and your family’s needs.

For example, you cannot start a manufacturing business in a residential neighborhood. And if your business involves a lot of in-person client interaction, it may not be practical to conduct your operations at your home office.

Narrow down your list of ideas to businesses that:

  • Are feasible to conduct from a home office
  • Allow most of the work to be done from home rather than on site

This will leave you with a list of business ideas that are practical and possible for you to start a business from your own home.

Examine Your Skills

Honing your skills can take time. You may be good at writing content or really good at designing or drawing. But running a successful business often requires acquiring new skills, such as marketing, cold-calling, or organizing skills. So you need to adjust the scope of your business based on your current skill levels.

Create a Proper Business Plan

For any business idea to be successful, there should always be a concrete business plan. The plan will act as a roadmap for success, laying out a plan for every aspect of the business from marketing to budgeting. A plan prevents you from going haywire and wasting unnecessary time on irrelevant things. It will help you to clearly understand your goals, prioritize the main business tasks, and ensure that your objectives are met on time.

A business plan will also be a must as your business grows, because small business lenders, investors, and potential partners will certainly ask for a business plan.

Moreover, as a business owner, a good plan will guide you to achieve specific targets as you grow. Operating a home-based business should have an appropriate short and long-term plan and specific steps to achieve along the way.

Create Business Networks

Even a home-based business owner must have a network of business relationships. How else will you be aware of current business trends and tools, and fill gaps in your personal experience?

You can join business associations that organize business events and conferences in order to stay updated on emerging issues in the business world. Join your local chamber of commerce to meet and form relationships with other business owners in your area.

Treat Your Business Like a Full-Time Job

One of the biggest attractions of home-based businesses is the comfort of working from home and the ability to work flexible hours. But this has proved to be a downside for many since having your working space combined with your leisure space can interfere with productivity.

It’s crucial that you come up with a schedule that dictates your working hours, make it known to your family, and restrict any distractions or interference. Therefore, setting aside certain time slots entirely for work is a good place to start.

Maintain Separate Business Space

Set aside a specific area in your home just for business. During working hours, keep all home activities at bay and never let them interfere with your business operation. If you have even one or two employees working for you, ensure that you have adequate supplies and materials they will need to carry out day-to-day operations, as well as a website and designated space for them to work.

Wear the Right Clothes

More often than not, people who work from home are tempted to wear whatever is within reach, even if it’s a pair of old pajama shorts. You don’t need to wear formal attire, but sticking to business casual helps keep your brain on the right track and promotes a professional mindset. When entertaining clients, you should dress to impress and stay appropriate to your industry.

Don’t Hold Back on Marketing

Your home-based business will also require a significant amount of time, investment, and of course, marketing. Though marketing can sometimes be a bit of a challenge for home based businesses, it’s significant to spend a few bucks on a marketing strategy, including a website and social media, to introduce your product or services to new customers. A quality marketing campaign can never go wrong and can, in fact, bring in huge returns.

Get the Right Licenses and Registration

Just like with any other business, licensing and registration of home-owned businesses are also mandatory, and every startup should adhere to all the rules and regulations set by different states and government authorities.

Running a home-based business? Lendistry supports small businesses and provides them with the resources they need to grow. For more information, call 888-594-7270.

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4 mins read

4 New Restaurant Revenue Streams to Boost Profits

Revenue Streams

It’s never a bad time to consider new revenue streams for your restaurant or bar. Sometimes, a new strategy can be provided straight from your kitchen without having to look any further.

This is particularly true for restaurants that have successfully survived the pandemic. They’re adopting contactless tech solutions, developing merchandise, looking for creative event ideas, and cooking up new ideas whenever possible to attract more guests.

So, if you’re wondering how to create extra revenue streams for your restaurant, we’ve outlined a handful of tried-and-tested strategies right here.

1. Host Parties

In the post-pandemic world, the desire for places to connect with others in person is stronger than ever. Your restaurant can become a gathering place for parties and other events.

Whether you rent out the entire restaurant for these occasions or simply set aside private rooms for rent, you have the opportunity to generate a lot of extra revenue while also providing a one-of-a-kind service experience that’s sure to increase loyalty and word-of-mouth promotion.

2. Sell Branded Products

Selling something you’re known for as a branded product is one foolproof way to generate a secondary revenue stream. If you own a pizzeria, for example, you might make your own soft pizza base that your customers love. Why not sell readymade pizza base in sealed packets to your clients so they can try making a pizza at home?

Do you run a coffee shop with home-roasted beans? Package them and sell them. If you own a microbrewery with a one-of-a-kind brew, offer it for sale in growlers or kegs. The list goes on!

3. Organize Workshops

Do you bake the most amazing & delicious pastries? Maybe you have the best pizzas in town? Are customers constantly raving about your killer cocktails? If so, it’s time to show off your skills!

Organize virtual or in-house (if space & situation permit) workshops. Sharing your expertise, helpful tips, and experience will do wonders and increase customer loyalty apart from bringing in extra cash with the workshop fees.

4. Connect With Customers, Wherever They May Be

With the festival season comes food trucks! While many brick-and-mortar restaurants may lament the existence of food trucks, the reality is that customers love them. The convenience of walking up, ordering tasty treats, and enjoying those treats on an outdoor stroll makes many food trucks so successful.

While running a food truck in addition to a full-time restaurant may not be your goal, consider capitalizing on the outdoor eats experience by bringing pop-up food booths to fairs and festivals in your area.

Meeting people where they already are is a sure-fire way to bring in new traffic and convert casual tasters into loyal repeat customers, not to mention the boost to your bottom line!

 

Ready to break out into new revenue streams for your restaurant business? If you’re thinking of expanding your food business and need a loan, get in touch with Lendistry today. They offer a wide range of comprehensive and affordable financial services to help you grow responsibly.

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Published on
4 mins read

5 Tips to Follow for a Successful Construction Project

construction

Construction projects require a lot of coordination and expertise. You need to make sure that you have the right people working on the project and that it is being monitored properly. Keep reading to find out some of the tips and tricks that you can follow to ensure a successful construction project.

Always Start with a Plan

You don’t want to jump into a project without knowing its full scope or how long it’s going to take. You need to know what resources are needed and are available for the job and how much time it will take to complete specific tasks. Make sure you have a detailed plan of action before you begin working on any part of your project.

Communication Is Central to Success

Once you’ve planned your project, it’s essential to communicate with everyone involved in the process so that they understand their roles and responsibilities, as well as any changes that come along the way.

Communication can help keep costs down by reducing unnecessary work for contractors and subcontractors who may not have been apprised of any changes made by other parties involved in a project’s construction phase. It will also help keep everyone on track so that deadlines are met and budget estimates remain accurate throughout each stage of the construction project.

Finance Management Is Crucial

Finance management during construction requires careful oversight from all parties involved in order to avoid overspending during the initial stages. This includes monitoring budget levels throughout various stages so that funds aren’t used up prematurely due to unforeseen circumstances.

Keeping a close eye on your budget lets everyone stay on track financially throughout the construction project. It also ensures that money isn’t wasted unnecessarily due to miscommunication between stakeholders about how much certain aspects of construction, such as utility upgrades, might cost them.

Sticking to a Schedule Is Extremely Helpful

There are a lot of things to keep in mind when managing a construction project, but one of the most important aspects is time. Keeping a close eye on the timeline of the project and making sure that each task is completed on schedule is crucial to the success of the project. By staying on top of the schedule, you can avoid expensive delays and ensure that the project is completed on time and within budget.

You Need to Be Able to Adapt to Changes

There are always unforeseen circumstances that can arise during a construction project, and being able to adapt to these changes is crucial. By being flexible and adaptable, you can make the necessary adjustments to ensure that the project stays on track no matter what happens. Keeping all stakeholders informed of all progress and changes that occur can help avoid potential problems down the road, and if any do arise, they can be fixed at an early stage.

Construction is a very tough field, and every project has its own challenges. There are so many things that can go wrong and so many things that you need to keep under control. Hence, try to keep track of everything, including your finances.

 

Lendistry uses cutting-edge technology to provide small business owners with efficient and effective financial solutions that cover all their needs, including financing construction projects. Contact Lendistry to learn more.

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3 mins read

4 Ways Lenders Can Add Digitalization to Their Processes

lenders

Lending is an industry that has seen a lot of changes in the last few decades. Not only is the economic environment lenders work in constantly evolving, but the processes in the industry are as well.

Influenced by the multiple innovations taking place in fintech, the lending industry has opened its doors to different kinds of lenders, resulting in the need for new processes to meet the evolving demands. Digitization is now a best practice when it comes to opening up access to lending for all small business owners.

Financing is a critical part of every business’s growth. It helps businesses get the tools and equipment they need to grow and expand. Keep reading to discover the different ways in which lenders can add digitalization to their processes so that they can provide the best service possible.

Acquiring Customers through Digital Touchpoints

Digital Data Lending

This involves gathering as much information as possible about potential customers before they apply for a loan so that you can make an informed decision about whether or not they should be approved for one. This can be done by using an algorithm that calculates the probability of default based on past behavior and other factors such as social media activity or credit history.

Distribution of Funds through Digital Channels

Lenders can use digital channels to transfer loans once they’ve been approved—meaning that if someone wants their money right away, now they’ll be able to access it quickly through an app or website. While there may be some costs associated with setting up these systems initially, they will save lenders a lot of time and money in the long run.

Educational Videos to Explain Banking Concepts

Creating educational videos to explain banking concepts would help engage with and provide financial education to customers, from how to take out a loan to how to save for retirement and more. Instructional videos also help to walk customers through steps in the application process that often trip applicants up.

Additionally, lenders could create interactive apps that walk customers through the steps of applying for a loan or opening a new account. These features could be accessed through the lender’s website or a mobile app. By making the process more digital and user-friendly, lenders can provide a better experience for their customers.

In today’s competitive world, lenders have had to transform their business goals and business models to place their customers’ interests at the forefront. With client satisfaction in mind, they need to focus on the value proposition of digitalization in making processes easier and more user-friendly.

Lendistry prides itself on being a reliable source of financial education for small business owners. With the help of innovative technology and a wide range of financial programs, the Lendistry team provides economic opportunities for small business owners looking to serve their communities.

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Published on
7 mins read

How to Buy a Commercial Real Estate Property for Your Retail Business

Commercial Real Estate

The location of your retail business has a huge impact on its performance. Factors like availability of access routes, the appearance of the area, visibility, and zoning regulations are vital aspects to consider when buying commercial property for your retail business.

Regardless of whether you are setting up a new retail venture or an additional branch for your existing venture, choosing the right physical setting for it is essential.

Though the process is complex, commercial properties have a more straightforward approach to pricing compared to residential properties.

However, there are also some crucial risks involved. Here are some things you need to know before investing in a commercial property for your retail business.

How to Begin the Journey of Purchasing Your Commercial Real Estate:

1. Consider the Nature of Your Retail Business

The type and nature of your retail business are probably the first things to consider when looking for commercial property. For instance, if you plan to open a coffee shop, gaming studio or bookstore for youngsters, then a building located near a school or university would be ideal. This will help you capture the attention of your target audience and boost your visibility.

2. Determine Your Spending Capacity

Have a good estimate of the amount of money you can invest in your property. Take everything into consideration including the initial down payment, closing costs, and renovation costs. Renovations may be necessary to attract customers to your retail business. A badly designed retail space can also negatively impact the productivity levels of your employees. However, if you have to deal with exponential renovation costs, then it may not make sense to buy the specific property.

3. Financing Your Commercial Real Estate Purchase

This is a no-brainer. No real estate transaction can be carried out without capital. But it doesn’t have to be from your own pocket. Financing your property is not as complicated as many beginners make it out to be. So, start searching and try to secure financing even before you start searching for your retail property.

The financing option you’re able to secure will depend on your personal and business credit scores, the type of property you’re buying and the type of loan that’s best for you. Retail business owners can choose from several financing options including private money lenders, hard money lenders, traditional commercial real estate loans and seller financing to name a few.

4. Perform Due Diligence

Once you have selected a commercial property, start doing your homework. Inspect the property thoroughly and look out for discrepancies. Review any lease agreements, title documentation and surveys related to the property. Also, check if the layout and structure of the building are good for your retail business.

Remember, no matter how much information you gather pre-purchase, it’s never too much! Therefore, it is always advisable to hire professionals for this since you may miss out on important details. Moreover, most lenders prefer valid inspection documents that have been prepared by reliable sources.

5. Find the Right Experts to Partner With

Buying commercial real estate involves lots of complicated rules. Thus, you need to have the right team of experts to help you process the deal smoothly. These professionals can help you secure financing and warn you about potential problems from the beginning.

Here are some professionals you will surely need to collaborate with to purchase commercial real estate properties:

  • Commercial Realtor
  • Accountant
  • Commercial real estate attorney
  • Commercial real estate broker
  • Tax attorney

In fact, it’s better to have your team ready before you start searching for potential properties. This process of hiring professionals may not be cheap, but it could save you from costly mistakes and unnecessary harassment in the long run.

6. Start Searching the Real Estate Market

Once the budget, desired property type and other necessary requirements are confirmed, it is time to search for available commercial properties. Look specifically for properties that will match your commercial requirements. Searching online is a good option, and it’s recommended you seek help from an agent who can shortlist commercial properties based on your requirements.

Alternatively, you could also opt for help from experienced professionals of REIT – Real Estate Investment Trust.

7. Check Terms, Make an Offer, and Close the Deal

Once you find the perfect property and make an offer, make sure the deed contains an inspection contingency clause. An inspection contingency clause will allow you to opt-out if the commercial property doesn’t pass the inspection.

A professional commercial real estate agent will help you write up the purchase offer. However, it’s always best to get it reviewed thoroughly by your attorney before you sign and submit it. Make sure that the offer includes a due diligence period so that all documents can be reviewed properly.

There’s a lot that goes into a commercial real estate transaction, so make sure you take your time and follow all procedures step-by-step. As mentioned earlier, it is crucial to work with a reliable team of experts in advance. These professionals can guide you through the many complex steps involved in this process.

Apart from investing in commercial property for your own retail business, you can also be prepared for other investment strategies if the need ever arises and prepare documents accordingly. These strategies can also give you good returns and profits.

All real estate investments, whether commercial or residential, come with risks. Thus, it’s vital to ensure you cover all the bases when you enter a commercial real estate transaction. The whole idea may be overwhelming to a non-expert. This is where expert help can be useful.

Lendistry can help you through the process and help make sure you’re not wasting valuable time and hard-earned money.

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Published on
8 mins read

When Should You Consider Refinancing Business Debt?

refinancing business debt

When you run a bustling small business, even minor expenses and debts can add up fast. Whether you took out a loan to get started or found yourself in debt because of some unexpected hurdles, there’s a good chance that refinancing your business debt might be the best answer.

To build a strong financial foundation, you want to ensure that you’re taking the necessary steps to protect your cash flow and grow your business. Refinancing can help you with this—keep reading to find out how.

What You Need to Know About Refinancing Business Debt

When Is Refinancing a Good Option?

Before answering this question, let’s examine what refinancing is.

Refinancing is when a business takes out another loan with the intention of paying off its existing debt with the new loan. This reduces the monthly payments on the loan by extending the term of the loan or lowering monthly payments altogether.

Refinancing allows you to get a lower interest rate, pay off your loan sooner, or take advantage of other attractive features of the new small business loan. This makes it a great way for businesses to expand their operations and leverage new opportunities without having to take on more debt or spend more money long term on interest payments. But when should you consider refinancing?

Financial Difficulties

Most companies usually decide to refinance or restructure their debt when they’re in a financially distressing situation and cannot make their monthly payments on time. In this instance, a chance to lower the interest rate or extend their loan term might help them make their payments on time without going under.

Favorable Market Conditions

However, financial decisions are not the only reason businesses refinance their loans. Businesses might also choose to restructure their debt because of improved credit ratings or decreasing interest rates. Taking advantage of favorable market conditions allows them to free up cash for other business operations and investment opportunities.

Why You Should Refinance

Have you ever wondered if it is a good idea to refinance some of your business debt? Maybe you have heard that you should refinance your business debt but don’t know why or are confused about if it really is the best option for you. It’s easy to get mixed messages about business debt, and this makes it hard to know what to do. Keep reading to find out when it makes the most sense to refinance your business debt.

To Escape Higher Interest Rates

Refinancing is a great way to escape higher interest rates and save money on your mortgage. By refinancing, you can lock in a lower interest rate and monthly payment, which can help you free up some extra cash each month for more business growth and innovation.

Many businesses in their early stages take on high-cost debt with astronomical interest rates, or predatory loans. Without refinancing, predatory loans cause you to be paying off your loans for longer than planned, which can redirect funds from important business ventures. Refinancing offers you an out, lowering your interest rates, allowing you to pay off the loan faster, and resulting in more savings.

To Elevate Your Credit Score

Refinancing can help you improve your business credit score in a number of ways. First, it can help elevate your credit utilization ratio, which is the amount of credit you’re using compared to the amount of credit you have available. If you’re using a lot of your available credit, it can hurt your credit score. Refinancing can help by giving you more available credit and bringing your utilization ratio down.

In addition, it can help improve your payment history. If you have a history of late or missed payments, it can drag your score down. Refinancing can give you a chance to make all of your payments on time and fix your payment history.

Finally, refinancing can help you get rid of high-interest debt. If you have debt with a high-interest rate, it can cost you a lot of money in the long run. Refinancing can potentially get rid of that debt and help save money on interest.

The Revenue Generation Has Slowed Down

When a business is not generating as much revenue as it once was, refinancing can be a helpful option since it helps lower the monthly payments. This can be useful when revenue has decreased as it provides businesses with access to the extra funds they need to keep operating.

Change in Payment Frequency

By refinancing, you can change the payment frequency to one that better suits your needs. It can help you pay off your debt faster or slower, providing you with some much-needed breathing room by giving you a lower monthly payment. This can help you better manage your finances and make your payments more affordable.

Switch to More Favorable Payment Terms

Since refinancing involves taking out a new loan to pay off an existing one, you can fix your own payment dates or months based on your convenience. This will help you pay the debt at an improved rate as per your preference and business needs.

Who Should Consider Refinancing Their Business Loans?

Any business that is struggling financially can benefit from refinancing. However, you will generally have better results from refinancing if your main problem is a low credit score. If you’re struggling due to other factors such as high interest rates or lack of funds, refinancing might not really solve the problem, depending on the situation.

If you own a small business, you may have more than one type of business debt. A good credit score and cash flow is something everyone strives for while running a business, but sometimes debt can build up, and you might feel like you have nowhere else to turn. In these instances, you can lower your interest rates and gain more flexible terms if you opt to refinance.

Refinancing can help lower the financial burden on your business in some cases. Lendistry strives to be a source of financial education for small business owners and offers a wide range of financial programs to help businesses grow and serve their communities.

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