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IT and Technology Business Loans

IT and Technology Business Loans Increase Working Capital

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How a IT and Technology Business Loan Can Help Your Business

Managing cash flow can be challenging for technology entrepreneurs, especially if they’re new to the industry and don’t have sufficient funding. Additionally, tech business owners also need to pay vendors and contractors regularly, even when they’ve just started their business. While some vendors or contractors offer flexible terms, most of them demand quick payment.

Payroll expenses are often the biggest cost incurred by tech businesses, especially for software development companies. Unlike vendor payments, employees have to be paid often, and their salary cannot be delayed.

These expenses quickly drain limited financial resources.

Fortunately, there are a number of ways to finance your IT business. Most startup companies use their own seed capital to finance their business. Some may ask friends and associates to invest. Others obtain financing through angel investors or specialized venture capitalists. While these options have great benefits, they are often difficult to obtain.

At SMB Compass, we understand the challenges of obtaining financing for your IT and technology business. That is why we’re committed to working with you to help you attain the success you truly deserve.

Best Ways to Use a IT and Technology Business Loans

Running a business can be difficult, and expensive. But if you have a reputable funding partner, that believes in your potential, you might have a chance for success. An IT and technology business loan might be the answer.

Here are some of the ways you can use the funds from an IT and technology business loan:

Working Capital

The IT industry is capital intensive. You need to purchase costly equipment, hire skillful employees, retain them, and manufacture your products or services. Obtaining additional working capital will help your business get through slow seasons while you wait for revenue to generate.

Marketing and Advertising

When competing against well-established IT companies, you need try your best to keep up. Investing in advertising and marketing efforts helps to get your brand or your products and services out there. There are a wide array of loan options to help you advertise and market your business so you can gain more clients and sell more products and services.

Business Expansion

If your business is ready for expansion, you’ll need funds to grow. Business growth is never cheap. Rent, renovations, and hiring new employees all require a lot of money. An IT and Technology business loan might give your business the chance it needs to expand.

Equipment Purchasing

How can you create quality and innovative technology if you don’t have the latest IT equipment? The IT industry relies heavily on modern equipment; and it does not come cheap. An IT and technology business loan will help cover the upfront costs of purchasing equipment for your company.

Best Types of Loan Programs for IT and Technology Business Loans

SMB Compass offers different types of financing options for your IT and technology business needs. To ensure that your business gets nothing but the best, our trusted financial advisors will help you find the right loan, based on your business’ specific needs and goals.

Here are the most common types of financing for IT and technology businesses

IT and Technology Business Loans

SBA 7(a) Loans

Compared to other types of loans, SBA loans offer flexible repayment terms and interest rates. Among other types of SBA loans, the 7(a) loan is the most popular, mostly because there are few restrictions on uses for the funds.

The Small Business Administration guarantees up to 85% of every SBA loan to the lender, which encourages lenders to finance small businesses and means that it is easier for small businesses to qualify for these types of loans compared to traditional loan options. Lenders are more willing to approve your loan since they’re repaid by the SBA in case you aren’t able to repay your loan.

Equipment Financing

IT firms need costly equipment to operate. Equipment financing helps IT firms pay the costs of the needed equipment for business, without the burden of large out-right purchases. You don’t have to secure equipment financing with personal or business assets, because the equipment itself serves as collateral. If you fail to pay, the lender has the right to seize the equipment.

Technology Business Loans
IT Business Loans

Merchant Cash Advance

A merchant cash advance is a good option if your IT or Technology business needs working capital ASAP, or if you don’t have good credit. Technically, a merchant cash advance is not a loan; as the name suggests, it’s more of a cash advance.

With a merchant cash advance, lenders provide you with the funds you need in exchange for a percentage of your daily credit/debit card transactions. While a merchant cash advance isn’t a loan, it still offers similar benefits. It also has a higher approval rate than other traditional loan programs.

Invoice Factoring

Does your company deal with slow-paying customers? Invoice factoring enables your business to generate revenue from pending accounts receivables immediately. With invoice factoring, you don’t have to wait for months for your customers to pay you back. Businesses gain access to quick cash by selling their invoices to a third party – a factoring company or a lender – for a fee. The remaining balance is paid, by your clients, to the factoring company.

Equipment Financing loan
Multi-Year Term Loan

Multi-Year Term Loan

A multi-year term loan typically has a repayment schedule of two to five years. This type of loan charges low monthly payments and provides sufficient cash flow for daily business operations. To qualify for a multi-year term loan, business owners must have good personal credit, strong business trade credit, and good historical cash flow.

Best Types of Loan Programs for Hotel Business Loans

SMB Compass offers different types of financing options for your hotel business needs. We have financial experts on hand, ready to help answer any question to make sure you find a loan product that fits your needs.

Here are the most common types of financing products for hotels:

IT and Technology Business Loans

SBA 7(a) Loans

Compared to other types of loans, SBA loans offer flexible repayment terms and interest rates. Among other types of SBA loans, the 7(a) loan is the most popular, mostly because there are few restrictions on uses for the funds.

The Small Business Administration guarantees up to 85% of every SBA loan to the lender, which encourages lenders to finance small businesses and means that it is easier for small businesses to qualify for these types of loans compared to traditional loan options. Lenders are more willing to approve your loan since they’re repaid by the SBA in case you aren’t able to repay your loan.

Technology Business Loans

Equipment Financing

IT firms need costly equipment to operate. Equipment financing helps IT firms pay the costs of the needed equipment for business, without the burden of large out-right purchases. You don’t have to secure equipment financing with personal or business assets, because the equipment itself serves as collateral. If you fail to pay, the lender has the right to seize the equipment.

IT Business Loans

Merchant Cash Advance

A merchant cash advance is a good option if your IT or Technology business needs working capital ASAP, or if you don’t have good credit. Technically, a merchant cash advance is not a loan; as the name suggests, it’s more of a cash advance.

With a merchant cash advance, lenders provide you with the funds you need in exchange for a percentage of your daily credit/debit card transactions. While a merchant cash advance isn’t a loan, it still offers similar benefits. It also has a higher approval rate than other traditional loan programs.

Equipment Financing loan

Invoice Factoring

Does your company deal with slow-paying customers? Invoice factoring enables your business to generate revenue from pending accounts receivables immediately. With invoice factoring, you don’t have to wait for months for your customers to pay you back. Businesses gain access to quick cash by selling their invoices to a third party – a factoring company or a lender – for a fee. The remaining balance is paid, by your clients, to the factoring company.

Multi-Year Term Loan

Multi-Year Term Loan

A multi-year term loan typically has a repayment schedule of two to five years. This type of loan charges low monthly payments and provides sufficient cash flow for daily business operations. To qualify for a multi-year term loan, business owners must have good personal credit, strong business trade credit, and good historical cash flow.