Small Business Finance

Small Business Finance: What You Need To Know   Happy to associate with SeekCapital that provides consulting services and funding procurement to small businesses in a quick and efficient manner. This article originally appeared on seekcapital.com by Jon Zacharias.    Starting and running a small business without having some form of credit is nearly impossible. Many small businesses do not make it simply because they’re under-capitalized. One month where sales and expenses budgets cannot be met could signal the end for business that could otherwise have succeeded. Others find themselves unable to grow their operations owing to insufficient access to the necessary funds. The answer may appear to be simple: get a loan and grow your business. However, getting a small business loan isn’t always easy.   Tips for Super Organized Small Finances   Pic Courtesy: Solopreneurdiaries Getting a Bank Loan Since the recession, the FIDC has ensured that small businesses who apply for loans are subjected to very close scrutiny. The Dodd-Frank act of 2010 has effectively limited the possible sources of funding for small business. Many analysts feel that in doing so, economic recovery was slowed. Whether this is true or not, small businesses in need of additional capital often find themselves unable to secure conventional bank loans. But is a conventional loan best for your business? The convoluted application process takes a great deal of time and effort and few loans are granted. In addition, repayment terms are highly inflexible. Small businesses are increasingly turning towards alternative lenders in order to get the business finance they need quickly, successfully and under less onerous repayment terms than banks allow.   The SBA 7A Program   Pic Courtesy: Fundera   Getting the Small Business Administration to guarantee all or part of a bank loan might sound like a great idea in theory, but the program has been widely criticized for its limitations. Once again the application process is complex and lengthy and not all businesses can afford to wait up to three months to get finance approved — if it’s approved at all. Then too, the SBA isn’t actually offering the finance itself. The small business entrepreneur still has to work through a conventional bank and banks remain reluctant to supply credit to small businesses. By 2011 a Gallup survey found that although 88% of businesses had access to credit, only 29% were lending from banks despite the SBA program. Read On: Getting Out of Debt  For Good Using These 7 Powerful Tips What Banks Don’t Take Into Account The main problem with getting bank loans is that banks want to see guarantees that you’ll be able to pay back the money. That’s fair enough, but instead of looking at how good your business’ chances of success are, they look at financial history. That makes things difficult for a newer business that doesn’t have the track record banks are looking for.     Remember, banks aren’t investors, they’re lenders. If the business or its owners don’t have the kind of credit history they’re looking for, they won’t issue the loan. Nowadays, financiers can use algorithms to project business income, but banks don’t use these tools when deciding whether you’ll get a loan.   Other Financing Options Getting finance fast, especially startup business loans, can be crucial to the survival and growth of small businesses, especially startup business loans. Since the banking sector isn’t making things easy for them, small business owners are increasingly turning to alternative sources of finance that offer them faster turnaround time, rate their creditworthiness based on the business itself and offer plans with flexible repayment options. Merchant Cash Advances Businesses that handle a volume of over $5000...