![]() Researchers earlier in the pandemic saw an uptick in business applications but smaller growth among what the U.S. Some of these potential new businesses may be empty economic calories.On the other hand, nine states saw business applications increase - but only four by double digits.Six other states also saw drops above 20%. Louisiana (31.2%), Ohio (30.2%) and Mississippi (29.8%) saw the biggest dips. 42 states saw business applications decrease, with 24 states dropping by double digits.This eclipsed the 13.5% year-over-year drop between April 2021 and April 2022. Nearly 78,000 fewer business applications were filed in May 2022 than in May 2021. The number of business applications dropped 15.6% in May 2022 - the biggest year-over-year decline this year.You can calculate your working capital by subtracting the business’s debt liabilities due within a year from current assets that you can convert to cash. Your working capital refers to the available money you have to fund your company’s day-to-day operations. While high D/E’s are common in some industries, your goal should be to keep your business’s D/E ratio as low as possible. This metric helps a lender understand how likely you are to cover new debt based on the debt you’re already paying. Your company’s debt-to-equity (D/E) ratio measures the proportion of your company’s debt divided by shareholders’ equity. Some business owners choose to use their personal assets - including their homes - as collateral on a business loan. Lenders typically like to see that the borrower has a thorough understanding of the financial operating cycle of the business.Ĭollateral is an asset that lenders can legally seize if you can’t make payments, including company buildings, equipment and accounts receivable. In most cases, you’ll need a credit score in the 600s to qualify for financing, although certain lenders and loan types may allow scores as low as 500.Ī cash-flow projection shows when money is collected, when cash goes out and what’s left. Your credit score is a data point lenders use to determine your reliability as a borrower. This is key for lenders, as a business that has a proven track record of revenue over the past two years is a more attractive borrower than a company with spotty revenue over the past six months. ![]() In general, a business that’s been around for a couple of years is more stable than a startup. As such, they’ll look at several different debt, asset, credit and operational factors to judge your risk as a borrower. Small business lenders want to know that your business and credit history are relatively stable. Simple interest rates starting at 4.80% for 26-week repayment 11.29% to 30.12% interest rates on loans issued directly by Funding Circle
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