Small Business Owners Turn To Alternative Financing Options

By Author: Ed Harycki
Total Articles: 1
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Ever since the banking crisis of 2008, small business financing has become very difficult to obtain. Even successful businesses are being turned down in record numbers as traditional financing sources have become extremely risk averse.

While the business press has recently started talking about improvement in the small business financing space, the improvement is strictly for the larger side of small business. This means companies producing $20 million plus in revenue per year.

This leaves a huge financing gap for the traditional American small businesses such as restaurants, retail shops and seasonal businesses. These mom & pop operations are the backbone of the economy. However, the current economic environment has made it very difficult for many small businesses to obtain financing. If you are a small business owner, you are well aware of the disconnect between lenders marketing and the reality of being approved. This situation has spawned an entire industry of alternative small business funding sources. Known as Merchant Cash Advance and Business Cash Advance providers, these sources of small business funding ...
... fulfill a much neglected niche.

Rather than focus on the small business owners personal credit and assets, Business Cash Advance and Merchant Cash Advance providers focus on the business itself to determine approval. The sales of the business are analyzed to determine how much funding a small business can qualify for. The difference between Business Cash Advances and Merchant Cash Advances is that Business Cash Advances take into consideration all of the businesses sales volume when determining how much funding to approve and Merchant Cash Advances consider credit card sales volume when approving the funding.

All types of small businesses have been turning to Merchant and Business Cash Advances for their funding needs. Restaurants, franchises and seasonal businesses have particularly embraced these funding types.

Seasonal businesses use these tools to provide working capital during the slow or off seasons. For example, a florist does most of its business during very particular times of the year. These merchants can use a Business or Merchant Cash Advance now – monetizing their future income to help smooth cash flows. No longer will the florist business be one of feast or famine as the famine season can be mitigated by the use of these funding sources.

Restaurants that have busy and slow periods also use Merchant or Business Cash Advances to maintain a steady financial picture regardless of the particular restaurant’s cash flow cycle. Those business owners who have decided to go the franchise route to obtain a proven effective business system also use these funding tools. With franchises, various fees and costs are due regardless of whether the business has been good or weak, not to mention the steady stream of working capital that’s always required for any small business. Merchant and Business Cash Advances are successfully used to assist franchisees through the slow times and whenever outside funding is required.

Not only do Merchant and Business Cash Advances from Swift Capital not require personal guarantees, the payback amount is flexible. Although it is a fixed percentage of sales, the amount varies depending on your sales volume. This means that your business will pay back less during slow times than during good times. The amount one can qualify for is also generally higher than that of traditional funding methods. These tools can be a win-win for everyone involved.

I started my career as a musician -- playing my way through college (favorite guitarist is, and always will be, Jimmy Page!). Realizing that music was a lot of fun – but unlikely to pay the bills ...I moved on to business. After getting an MBA from Kellogg (not the cereal company!), I worked for companies big and small – including MBNA – the (former) leading U.S. direct marketer of credit cards, had a stint as an investment banker at Barclays Capital in London, and started the first independent credit card company in the UK. After selling that company to one of the top UK banks – I rejoined MBNA to lead their small business lending efforts – which opened my eyes to the huge opportunity to help small business owners finance their dreams. I’ve always been an entrepreneur at heart, and have started over a dozen companies. But what excites me most is applying my creative and technology interests to create products and services that make business simpler, more enjoyable and more affordable for other entrepreneurs. And I still play a mean guitar... http://budurl.com/stcmainapril12art