Effective Ways To Generate Leads For Business Loans
It is indeed crystal clear that business funding is an integral part of business success. Likewise, effective ways to generate leads for business loans.
It is important to note that all the equipment and tools required to process product will actually be acquired by money. Again, the engagement of staff in the product process and delivery will surely be enhanced by their paycheck and remuneration.
Likewise, business market share and dominance cannot be achieved without funds.
Table of Contents
Business Funding
However, business funding comes in different ways. It can be through loan, grants, personal capital, shares or bonds.
The truth of the matter is, business expansion requires outsource funding.
In most cases, many small businesses collapse and even fail because they don’t have enough funds to explore new market opportunities, as well as competing against the overwhelming pressure of mega businesses.
Meanwhile, to solve this problem, various business funding institutions were established in order to provide financial services, both for business startup and development.
These business funding institutions are not just giving out money to finance business, but also to make money through the cash they give out to prospective clients.
For instance, they give this money to business entity in order to finance its activities, with a view to getting the money back in addition with a certain percentage of increase, at a stipulated period of time.
This form of funding is called “loan”.
Now, the question each business funding institution asks is: “how do we generate leads for our business loans?”
Undoubtedly, generating leads is an important part of those businesses operations. In a broad sense, they are more concerned with how to convince prospective clients, especially small business owners, to opt for their financial products.
This is because they can only earn more money as they trade more money.
Nevertheless, this article comprehensively details the steps to answer the question.
But before that, let us have a glimpse of what loan is, its importance, including its various forms.
WHAT IS A LOAN?
In general, nobody should be scared of loan. Neither should any business owner ignore the advice of getting extra funds from a recognized financial institution.
Of course, loan may get someone into trouble if care is not taken.
However, its benefits is far more than the risk of obtaining it.
As long as you have a definite and income generating purpose, the best way to fulfill this purpose, in the midst of lack of funds and competitive pressure, is to obtain loan.
However, loan is simply an amount of money, which is borrowed by an individual, business entity or corporations, from a bank or other financial institutions, so as to financially manage and sustain their plans, with an assurance of returning it with interest at a stipulated period of time.
It should be noted that, the lender and the borrower must agree on the terms of loan before money is given out.
And up to a point, the lender could demand an offer of asset up for collateral, which stands as the main guarantor for the borrower.
Undoubtedly, the common loan for American households is a mortgage, and it is taken for buying property.
It is not only individual or business that needs loan. Governments likewise go for loan to finance some social services, infrastructure and capital projects.
While the main idea behind loan is to get funds to grow the overall money supply.
As well, interest on loan and the necessary fees serve as sources of revenue for the lender.
Loans generally are most suitable for acquiring assets, as a startup capital, and to promote business activities.
IMPORTANCE OF LOANS
Subsequently, you have been made to understand that loan is a borrowed money for a set of period within an agreed repayment schedule.
And also, its repayment depends on its size and duration, and the rate of interest.
Moreover, the various reasons why loan is good, most especially for small businesses, are highlighted below.
- Loan helps to launch business ideas. This means it serves as capital to start a new business.
- Used to capitalize on business opportunities.
- Important way to continue to build business and expand it.
- Helps business to get through a rough time.
- A source of financing for small and medium-sized enterprises.
- An avenue to manage tax burden.
- Plays a big role in keeping business finances healthy.
- Loan is a channel through which more businesses get a chance to enter into the market.
- It is most needed when there no cash at hand to finance a project.
TYPES OF LOANS
Now that the importance of loans has been shown, it is essential to enumerate the different types of loans to consider.
For instance, what type of loan is best for each circumstance and need?
Hence, let’s review ten (10) types of loans.
Secured loan
This type of loan requires some form of collateral, such as property, bonds, stocks, assets, etc, in order to secure the repayment.
Unsecured loan
It is the one that is not backed by collateral. And it includes items such as credit card purchases, personal loans, education loans etc.
Mortgage
It is a loan taken out to build house, or office space.
Working capital loan
It is the borrowed money that is used to run the business on a daily basis. It is more importantly meant for an emergency situation.
Pawn shop loan
This type of loan is obtained by taken an item of value, which has the worth of that type of loan, to the pawn shop.
Credit card cash advances
A cash advance is offered through a credit card to secure a short-term loan against the card’s available balance.
Hire purchase loan
This is loan for long-term purchase of assets. For example, vehicles, machinery etc.
Factoring loan
It is based on money owed to a business by its customers.
Payday loan
This is a high-cost but short-term loan that is typically due by the next payday.
Title loan
It is a loan obtained by handing over car title to the lender.
BUSINESS LOANS
Simultaneously, different forms of loans have been discussed. Although, our focus is on a particular type of loan, that is specifically used to finance business. And it is called “business loan”.
Indeed every business has different growth strategies, but they are all concerned about how to get more capital.
Fortunately, there are several avenues through which businesses can get extra money, whenever they are in need of more capital.
First, invest profits into the business. Second, it’s to find investors who are willing to make capital injection.
And finally, apply for a business loan.
Thus, business loan is an immediate lump-sum of cash that is infused into a business for long-term financing.
Also, it is a loan typically intended for business purposes.
Definitely businesses, especially small businesses, must have financing which is often in the form of a business loan, to get off the ground, or to keep operating.
In fact, they require an adequate amount of capital to fund startup expenses, or to pay for expansion.
Moreover, a business loan is debt that the business entity or company is obliged to repay according to the terms and conditions of the loan.
Nonetheless, business loans come in a number of different ways, such as bank loans, asset-based financing, micro loans, mezzanine financing, invoice financing, business cash advances and cash flow loans.
WAYS TO GENERATE LEADS FOR BUSINESS LOANS
Admittedly, generating leads is the most challenging part of any form of business, whether for cloth selling or business loan.
It is even easier to get customers for cloth than bringing merchants for business loan.
Therefore, if you, as the owner of a lending company, have ever asked for ways to effectively generate leads for your business loan.
Here is the definitive guide to generating those leads.
Interest rates
It is evident that interest rates determine the response of prospective borrowers to loan. Also, it is an effective way to generate leads for business loans. Thus, try to make a loan of lower interest rate available for low-class earners or small business owners.
As a result, more customers will patronize you.
Have a target market
This is another key to generating business loan leads. As this is a big industry, and the market is massive.
It is always better to limit your focus on specific clients in order to generate top quality business loan leads.
To clarify, you may stick to Traditional Merchants Cash Advance or other types of term loans.
It is a fact that merchants look for flexible loan programs with long-term payback, including better interest rate.
Identify the right audience
After having a target market, ensure that you locate the right audience that needs business loans.
Facebook, LinkedIn and Google are good platforms to research in order to find the audience that you can market to.
Use the best marketing method
There are a good number of marketing methods available for generating business loan leads
Here is the list of them.
Google Ad words
It is one of the most popular leads generating methods. It involves Search Engine Optimization (SEO) which can help you to bring your landing pages or website on the top or first page of Google. Thus, create a content around your business concept.
Social Media Marketing
This is an effective tool to generate business loan leads. In particular, it includes marketing your business loan through Facebook, Instagram, LinkedIn, Twitter, Pinterest, etc. Have your business page on them.
Email Marketing
In most cases, a great email marketing script can generate a lot of business loan leads for you. It is a cost-effective marketing method. However, to really enjoy its good result, you need to find the best email list and email marketing tools.
Press 1 Campaign
It broadcasts a pre-recorded message. To illustrate this, it broadcasts a message saying, “This is Curvex from XYZ Capitol. If you need a working capital for your business, press 1. Or press 2 to put your number on DNC list. And as soon as someone presses 1, it connects to your phone or your agent.
Problem Solving
Do not join those lenders that brag about how much money they can get a business or how fast they are able to process a loan.
Rather, concentrate on solving borrower’s problems of various kinds.
Focus Your Website
You need to simply make the website about your customers and not about yourself.
Let the website be about how you will serve the customers and how you can solve their problems.
Tribe Methodology
It is true that tribe mentality works, perhaps too well. This implies that people are willing to do business with others who are like them.
For example, a shoes selling shop will desire to work with the shoes financing expert rather than a commercial bank.
Therefore, use this to your advantage as you pick your target market, and also when creating your business content.
CONCLUSION
To sum it up, generating leads for business loans requires simple techniques but it is probably a difficult task.
However, if you can take your time and pay the price to adopt the leads generating techniques in this article, you will surely reap the benefits.
