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Equipment Loan vs. Lease: Which is Better for Your Business?

Men talking about an equipment loan

When you’re just starting your business, you’re expected to spend more than you earn. This means you will probably find yourself needing to purchase essentials for your operations, whether they’re specialized tools, heavy machinery, or transport vehicles. However, you may not have the capital at the moment to buy them.

Fortunately, you can opt to get equipment loans or equipment leasing to acquire much-needed tools for your business. Learn what kind of financing options are available to you.

Understanding Equipment Loans & Equipment Leasing

Equipment Loans

An equipment loan for a small business, also referred to as equipment financing, allows you to buy the tools and equipment you need. Your lender will give you the capital to purchase the tools or equipment as a loan specific for the items you need to operate or update.

The amount you receive is based on your plan and the lender’s terms, allowing you to borrow most or all of the total value you need. Once you’ve completed your repayment, you will fully own the tools or equipment you bought.

Equipment Leasing

Equipment leasing for a small business is different in that you won’t own the tools or equipment outright. With this option, your chosen lender will buy what you need from a vendor before renting it out to you every month. At the end of your lease contract, you have the option to renew, return, or purchase the tools or equipment.

What Are the Advantages to Equipment Leasing or Equipment Financing?

Although both options allow you to use the latest tools and equipment in your operations, their structures provide different advantages that are worth understanding.

The Advantages of Equipment Financing

  • No Need for Cash on Hand: One of the reasons this is considered one of the best financing options for a business is that you don’t have to pay any upfront costs, giving you instant access to the loan after your application gets approved.
  • Tax Incentives: Equipment financing is ideal for small businesses because it can be filed as a tax deduction, allowing you to lower your annual tax liability.
  • Less Documentation Needed: Unlike traditional loans where lenders require your entire financial history and credit score, equipment financing is more favorable and forgiving to small businesses. Most lenders simply need you to make your repayments on time.

The Advantages of Equipment Leasing

  • Use Current Technology: Equipment leasing is ideal for small businesses that need to stay up-to-date with the latest tools and equipment in their industries. It lets you use the most current technology without the cost and commitment of buying them.
  • Flexible Cash Flow: Equipment leasing doesn’t require a down payment, allowing you to use your cash on hand to pay for other needs such as payroll, bills, and inventory.

Which is Better for Your Small Business?

When deciding on a business financing solution, you should consider your immediate needs and how to best address them.

Whichever option you choose, you should remember that it will only be as good as the lender you choose! Probably is your partner in growing your business for both equipment financing or equipment leasing!

Learn more about our funding and term loans when you get in touch with us today!
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What Alternatives Are There to SBA Financing?

SBA Financing building

The past year has been tough for small businesses and aspiring entrepreneurs. The pandemic has forced multiple business sectors into dire financial situations due to public restrictions and safety protocols. At the height of the pandemic restrictions in March and April, small businesses in the United States were pushed to their limit. 

According to a survey at the time, more than 7.5 million small businesses were in danger of closing permanently due to the shutdown. 

However, these enterprises could turn to the Small Business Administration for financing. This organization has been trying to help small businesses for years and tried to provide a beacon of hope through uncertain times in 2020. But not every small business meets the SBA’s rigorous requirements to secure a loan, in fact – most don’t. And even if they do meet requirements, there simply isn’t enough money to go around, as was seen in 2020 when the SBA quickly ran out of stimulus and PPP funds.

So, what alternatives are available for entrepreneurs who need small business loans? 

Below are a few options you can explore if SBA financing isn’t possible.

1. Personal Loans

Your first alternative is to take out a loan yourself. This means that your personal credit history and credit worthiness will be scrutinized by banks and other organizations, rather than your small business’s profitability. If you have a stellar credit score, you could be fast-tracked for adequate loans to use to finance your business – but most people don’t have a great credit score, and it can be quite risky.

The downside of personal loans means that if you don’t manage to recoup your losses and revitalize your business, the obligation and consequences falls on your head, and on your collateral. This can mean liquidating personal assets, such as cars and residential property to pay for the loans should you fail to do so.

This is why personal loans are ultimately highly risky, and are only really used in dire times.

2. Loans from Friends & Family

If you don’t want to put your personal property at stake or your credit score isn’t up to par to secure personal loans, you can turn to people close to you for financial support. However, many people feel uncomfortable securing loans from their relatives or friends, as this simply moves the risk to them.

However, a benefit is that you can negotiate lower interest rates or find alternative methods for repayment in some scenarios. You could ask them to become investors, giving them a stake in your business in exchange for their loans too – though this still has the risk of losing it all (yours and theirs) if the business cannot be revitalized.

The key to borrowing from close friends and relatives is to be transparent about the odds of your business recouping its loss. You should also be diligent in making payments to avoid personal drama infiltrating your business.

3. Term Loans

If your business isn’t in financial trouble now, but you can see the writing on the wall, you may have time for a lengthy alternative to SBA financing. Term loans are one such option. 

You still have to meet the requirements for borrowing from the lender and wait through the lengthy application processes, but this might be quicker than an SBA loan in many situations.

These types of loans typically shell out higher amounts and come with low interest rates. However, they do tend to be more thorough with their assessment as they want to ensure you can return their money in due course. 

4. Equipment Financing

Sometimes your business model may not seem highly profitable to others and can torpedo your hopes for securing SBA financing or even other financial support. However, you can still turn to an alternative that does not take into account your business status or profitability as much. 

If your small business uses expensive equipment for its production process, you can use equipment financing to take out loans. These types of loans use your machinery as collateral, and your other assets won’t be part of the process.

This type of financing can be quicker, thanks to minimal paperwork. But you will be expected to provide a down payment. Some companies even require a down payment as a step in their process.

5. Online Loan Providers or Alternative Financing

If your business isn’t eligible for SBA financing and you don’t qualify for a personal bank loan, or it seems too risky, then you can turn to the internet for help!

Probably Yes offers quick and streamlined small business loans as a needed alternative to SBA loans, personal loans, or asking friends and family.

Our applications can take only a day or two for approval! Plus, we don’t need the extensive collateral that many others require. Some online small business loans have high interest rates, or prepayment fees in case you pay them back early – but not Probably!

Be sure you choose a reputable online lender like Probably Yes, and always check reviews, affiliates, and history to ensure you are getting your loan through a company that doesn’t cut corners.

Contact Probably Yes For Your Small Business Loan + An Alternative to SBA Loans

Times have gotten tough for small businesses, but there is hope on the horizon!

Thanks to the efforts of the private and the public sector, these uncertain times may end in the foreseeable future. However, until that happens, consider a seamless online small business loan provider to stay afloat with financing options that work for you. 

We make small business loans fast and easy. We’ll work with you to help you get the working capital you need when you need it. Call Probably at (844) 940-2303 today.

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How to Successfully Launch a Startup During a Pandemic

Launch a Startup on a laptop

The recent pandemic may hopefully be coming to a close because of the vaccines. However, its effects on public health and businesses are nearly-irreversible.

Despite the impacts of the COVID pandemic, many business owners and entrepreneurs are finding ways to continue to serve consumers’ needs 

Sure, starting a small business in the midst of a health crisis may be deemed risky by some, but it’s definitely doable. A variety of business types can thrive during and beyond a pandemic with enough time, effort, and research.

Here’s how to do it.

Get With the Times

If you want your business to be in-demand, you need to cater your products and services to the needs of your customers during this pandemic. Your enterprise should also offer goods or services that are still going to relevant and helpful beyond the current health crisis.

Business types that attain this balance include:

  • Delivery Services — If you’re looking to create a company that greatly benefits your fellow business owners in your community, start a delivery service. A lot of small to medium enterprises are forced to provide delivery options for their goods. Plus, a lot of logistics companies are backlogged because of COVID-19 restrictions in their workplace. You can build a fleet of bike or motorcycle riders that can provide fast and efficient delivery for restaurants and retail stores. If you want to focus on business-to-business customers, then you may want to switch to a van or truck fleet, as they often need to transport products in bulk.
  • Cleaning Services — The pandemic has seen a rise in demand for cleaning services. Commercial and residential property owners alike are looking for crews that can not only clean up but also disinfect the surfaces in their homes and offices. If you have the knowledge and experience in this field, starting a cleaning business and training employees on the best sanitation practices should be a breeze.
  • Mask Making — Masks are especially helpful during this pandemic, as they minimize the spread of the virus. There’s also a demand for them beyond these unprecedented times, as there are some people whose immune system is sensitive to particles in the air, like pollen and bacteria. The Centers for Disease Control and Prevention (CDC) has a great guide on how to make sewn cloth masks. If you want to stand out from the competition, print or sew unique graphics and patterns on the masks.

Implement Social Distancing Measures & Explain Them Through Your Value Proposition to Give Your Customers Confidence

The last thing you want is for your business to be closed down after just a couple of days because you violated social distancing orders. Being complicit to the spread of a virus like COVID-19 in your place of business is not a good look, too.

Here are some social distancing guidelines to consider:

  • Keep a distance of six feet from each other. This applies to both employees and customers. The fewer the people in the establishment, the better.
  • Provide handwashing and sanitation stations for employees and customers to wash their hands.
  • Direct employees and customers to wear a mask at all times in your place of business.

Take Your Business Processes Online

Because going outside isn’t always safe, people are starting to prefer buying products and services online. This means your business needs to be on the web, too.

Create an online store using e-commerce platforms, like Shopify and Squarespace. Take cashless payments using online gateways like PayPal, Venmo, and CashApp. Instead of using traditional advertisements like flyers and posters, get your customers’ attention through digital marketing methods. Get your business to the top of search engine results and your customers’ social media timelines, and you’re sure to get more sales or at least inquiries.

Digitizing your business processes also makes it future-proof. After all, over 74 percent of people already buy products online. It’s not only safer because of the pandemic, it’s also easier and more convenient overall.

Probably Yes Can Help Fund Your Startup & Get You the Equipment You Need!

With a business type that fits the needs of people during this health crisis, has solid online business processes, and follows proper social distancing measures, your business is sure to weather this storm and thrive beyond it!

Let Probably help you get the funding you need for your startup. We make small business loans easy. Call us today for details.

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Small Businesses & COVID-19: Your Government Funding Options

new building for small businesses

The safety measures and mandatory closures due to COVID-19 hit plenty of businesses, especially small businesses. The outbreak resulted in many small businesses dealing with unprecedented economic disruption, causing many to stop their operations temporarily or for good.

Outgoing President Donald Trump signed into law the CARES Act last March 27, 2020. The Act allotted $376 billion in relief for small businesses and American workers. Apart from the traditional SBA funding programs, the 2020 CARES Act also established temporary funding programs to assist small businesses during the COVID-19 pandemic.

However, as we know, the needs typically outweigh the available resources with these government programs. Therefore, it is important to understand all of your financing options, whether government-funded or not.

Paycheck Protection Program

The U.S. Small Business Administration (SBA) will grant loans of up to $10 million to eligible small businesses. With the Paycheck Protection Program, the SBA can also provide a direct incentive for small businesses to fund their payrolls.

The SBA can forgive Paycheck Protection Program loans if small businesses meet the employee retention criteria and use the loan for eligible expenses.

Other details about the PPP include:

  • Paycheck Protection Program loans have an interest rate of one percent (1%).
  • Loan payments can be deferred for borrowers who apply for loan forgiveness until the Small Business Administration pays the borrowed amount to the lender. 
  • Loans issued before June 5 can mature in two years. Loans issued after June 5 have a maturity of five years.
  • PPP loans do not require personal guarantees or collateral.
  • Private and government lenders will not charge small businesses any fees.

To apply, approach any SBA 7(a) lender or any federally-insured credit union or depository institution. Once you are successfully enrolled in the program, you gain immediate access to the loans.

Economic Injury Disaster Loans

This loan offers funds to small businesses and non-profit organizations struggling with a temporary loss of revenue. The EIDL assists applicants to meet operating expenses and financial obligations that could have been met had a disaster not occurred.

The loan’s terms include:

  • 30 years maturity
  • 3.75 percent for businesses
  • 2.75 for non-profit organizations
  • No pre-payment fees or penalties

Even if your business is denied, you can still apply for this grant, which can be used to maintain payroll, pay for employees on sick leave, and other relevant expenses.

SBA Debt Relief

As part of the Small Business Administration’s COVID-19 debt relief efforts, the organization will pay six months of interest, fees, and other operational fees that small businesses owe for all Microloans, 7(a) and 504. This relief, however, is unavailable for EIDL or PPP loans.

Borrowers don’t have to apply for this assistance. It automatically provides the following:

  • SBA will make payments with the next payment due on the loan.
  • If your loan is currently on deferment, the SBA will pay within the next payment due to the end of the deferment period.

Alternative Funding Options

Although the U.S. government is working to help small businesses with funds once again, this can take time – lots of time.

At Probably we offer working capital loans and small business loans to small business owners without the wait or snags, up to $500,00 0 in as little as one business day.

If you are in need of quick funding, Probably Yes is at your service. We provide quick and easy small business loans. Benefit from simple processes, flexible options, and immediate access to the funding you need. Apply for a loan today.

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Our Small Business Financing Options

Top Small Business Financing Options on a laptop

Probably works hard to help small businesses finance their operations, expansions, and success! We offer a wide array of small business financing options – but our three most popular are our working capital loans, merchant cash advances, and equipment financing.

Let’s look into each so that you can feel confident in your small business financing choice! Of course, if you still have questions, reach out to our knowledgeable team to learn which of our small business financing options is the right fit for you.

Working Capital Loans

A working capital loan is a loan for your small business’ everyday operations. That means these loans have shorter terms and are not used as prolonged investment funding. Think of these loans as ‘bridge loans’ to help you bridge the gap between paydays, large orders, or an influx of working capital.

Working capital loans are often used for payroll, equipment, taxes, marketing, rent, or debt payments when your business’ next payday is still a few days away. Seasonal businesses might need working capital loans to bridge the gaps when they are prepping for their busy seasons.

All small businesses have slow and busy periods, but that doesn’t mean your bills won’t continue to pile up. Use a working capital loan to help with your cash flow at any time of the month or year.

Merchant Cash Advances

A merchant cash advance (MCA) isn’t a loan but a cash advance based on your business’ credit card sales. You can apply for a merchant cash advance and have your funds deposited into your business checking account quickly, making it an excellent option for fast funding.

Our merchant cash advance looks at your daily credit card receivables more than your business or personal credit to determine approval. This means even a small business with lower credit scores or a new business without a long credit history can be approved.

While a merchant cash advance might make sense for a small business that needs cash quickly and doesn’t have a long (or high) credit history, it is essential to make sure you understand the term-limit, interest rates, and any holdback.

Ask your Probably agent to explain this small business financing option to you – as clarity and transparency are two of our core values!

Equipment Financing

Our equipment finance services can help your small business acquire new or used equipment without emptying your bank account. When you lease a piece of equipment, you’re essentially renting it while making payments for the duration of the lease agreement. Our equipment financing not only gives ownership of the equipment to your business but the equipment also usually serves as collateral for the loan.

We know that equipment is essential to keeping many businesses going, and if you use large equipment, or need multiples, it can tie up a large amount of your working capital or credit. Whether your business has one or several equipment needs, equipment financing is a way to have that equipment right when you need it, even if you do not have the full cash on hand.

Choose an equipment finance company that works in your industry and understands your unique needs for the best results and approval rates – like Probably! We specialize in equipment financing for small businesses in multiple industries, and we can say ‘probably yes’ to your equipment needs.

Contact Probably for the Best Small Business Financing Option for You!

Most banks won’t even consider helping smaller or newer businesses but Probably wants to work with you to help you grow regardless of your age or credit history. That’s why we offer small business financing options that can work for anyone.

We think that every business deserves the chance to get the funding they need to succeed – and we’ve made our business out of believing in them!

Contact Probably today to learn more about our small business financing options and how they can work for you.

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Cash Flow 101 – How to Understand Cash Flow Statements

woman applying for business cash flow financing

Cash flow statements are financial statements that show the cash in and cash out for a given company. And though this may sound quite simple, there are many confusing parts in this common business paperwork.

Cash flow statements, or CFS, measure how well a business is able to generate cash, as well as how much more they are making (cash in) than they are using (cash out). Cash flow statements are meant to show how a business is able to pay its debts and fund its operating costs and is an important supplementary document to a balance sheet and income statement. In addition, a business’ cash flow statement is a mandatory part of a business’s financial report.

Let’s go over cash flow 101 and exactly how to interpret cash flow statements!

Cash Flow Statement 101

One use of your cash flow statement is to give investors a simple way to understand how your business is running, where your money is coming from, and where your money is going.

The second use of your cash flow statement is for creditors, who use your CFS to determine how much cash your company has to fund its needs and pay its debts.

This means your cash flow statement is used by both investors and creditors to judge the financial footing and viability of your business.

Cash Flow Statements Show:

  • How a business manages its cash or cash equivalents
  • How a business generates its cash or cash equivalents
  • How a business spends its cash or cash equivalents

Components of Cash Flow Statements:

Cash from Operating Activities

The operating activities on your cash flow statement reflect how much cash is directly generated from your products or services. This means accounts receivable, depreciation, inventory, and accounts payable are reflected in your operating activities section as well.

Cash from Investing Activities

Investing activities include all sources and uses of cash from your business’s investments, such as the purchase or sale of an asset, loans made to vendors, received from customers or payments related to a merger or acquisition.

Cash from Financing Activities

Cash from financing activities may include sources of cash from investors, loan companies, or banks. Dividend payments, stock repurchases, and the repayment of loans are all included in this category. These changes can be cash in when you receive financing, and cash out when you make loan payments.

Cash Flow Statements VS Balance Sheets

Your cash flow statement is distinct from your income statement or balance sheet because it never includes your future incoming or outgoing cash on credit. It is important to remember that cash is not the same as your business’s net income, which includes cash sales and sales made on credit. This of your cash flow statement as just that – only showing cold, hard cash.

Cash Flow Statement Summary

A cash flow statement measures your business’s strength, profitability, and the potential long-term future for your company – so it is not just important, but vital to understand!

Your CFS can help determine whether your company has enough cash to pay its expenses and ultimately, stay in business. In addition, your company can use your cash flow statement to predict future cash flow and create an accurate and viable budget.

By studying and understanding your own cash flow statement, you (or a creditor or investor) can get a clear picture of how much cash your business generates and get a better understanding of your financial strength for the future.

Contact Probably for Small Business Working Capital Loans & More Financial Services & Information

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Benefits of Non-Traditional Business Financing Options

People talking about Non-Traditional Business Financing Options at a table

When banks let you down, Probably is here for you with our non-traditional business financing options. With a non-traditional business financing option, like a working capital loan, you spend less time wading through red tape and big-bank paperwork to get the capital you need faster! This is especially helpful if you are using your business financing to help bridge a capital gap in your day-to-day or weekly operational needs.

Waiting weeks for approval or spending hours filling out paperwork just to get denied the capital your business needs is hardly helpful. And that’s why Probably decided to be different – the better alternative to traditional business funding.

Benefits of Non-Traditional Business Financing & Working Capital Loans

Probably knows that a working capital loan is a great choice for bridging any gaps in operational day-to-day needs, but only if it is through a great lender. Unfortunately, big banks usually aren’t the ‘great lender’ you are looking for. In fact, most big bank applications are long, confusing, time-consuming, and will still deny you even after the hard work of filling it all out.

Working capital loans through Probably are based on your current business performance, not a requirement of years of credit history. Plus, your on-time payments help build your business credit! Here are more benefits of non-traditional business financing through Probably:

  • Approval in as Little as One Day
    • At Probably, you could receive your business funds as quickly as one business day, up to $500,000! Because we know that unexpected expenses or business opportunities don’t wait around for paperwork to slowly go through, they often require a quick business loan! We move fast to provide you access to the working capital you need, when you actually need it!
  • Our Simple Application = Your Simple Solution
    • One of the reasons we can have such fast approval is because we have streamlined our application process. This makes it easier for you to fill out, and easier for us to go over. You have a business to run, so we didn’t want to make an application that felt like a second (or third) job! We know you are busy, and that’s why our application process is fast, hassle-free, and credit decisions are rendered quickly. In fact, most of our clients complete their online application in just minutes!
  • Flexibility in Your Business Financing Uses
    • Unlike the big banks, we let you use your non-traditional business financing or working capital loan as you see fit. Buy inventory for a big order, bridge payroll gaps, pay taxes, or pull the trigger on exciting opportunities in expansion and growth. Our working capital small business loans meet you and your business right where you’re at – whatever that may be.
  • Build Your Credit, Don’t Hurt It
    • Building your credit profile for your business is important, which is why we give businesses the opportunity to improve their credit profile with each and every on-time payment we receive. Our small business loans are based on your current business performance and help build your business credit for future needs.
  • Small Business? New Business? That’s OK!
    • Probably even has non-traditional business financing options for new businesses and startups. Most lenders refuse to help new businesses, but we provide alternative business funding and financing options for startups to help you grow. Every business was ‘new’ at one point, and we want to help each one reach their full potential!
  • Repay Up to 18 Months + No Prepayment Penalties
    • We think that prepayment penalties aren’t fair. Not only will we never charge you a ‘prepayment fee’ or a fee for paying off your loan ‘too quickly’, we actually offer prepayment (or early payment) discounts on our loans and non-traditional business financing options.
  • Business Loans from $5,000 – $2,000,000
    • Whether you need a little or a lot, Probably can probably say ‘yes’! And with over 40% of small business loan applications being rejected by the big banks, non-traditional business financing options are becoming more and more popular! Don’t get stuck with your second or third choice when the big banks deny your business loan application, choose a lender who will truly partner with you.

Working Capital Loans from Probably

A survey from Richmond’s Federal Reserve Bank found that banks have an approval rate of only about 58% for small business loan applications. However, alternative lenders have a 71% approval rate for small business loans – and Probably works to get that number as close to 100% as possible!

Our working capital loans can help you finance your everyday operational needs. From purchasing additional inventory to helping with payroll, investing in new equipment, paying taxes, or other fees like rent, marketing efforts, or even general cash flow needs, our working capital loans are meant to bridge the gap between what your business needs right now and what it currently has.

Working capital loans are usually short term (not multi-year loans) however, that doesn’t mean you won’t get a great rate that works with your budget. We offer repayment terms of up to 18 months for our working capital loans, instead of the industry standard of 12 months or less. Plus, we have no prepayment fees – so you can pay it off as fast as you like!

Our working capital loans don’t require equity transactions, which means you still have complete control of your business. Plus, our working capital loans are ‘unsecured’, so they don’t require any collateral.

Contact Probably for Your Non-Traditional Business Financing Option Today