Loading

Grow Smart Business


teaserInfographic
Close
For more information and charts about Small Business Mobile:
Powerpoint Download the PowerPoint
and See Key Highlights from the Web.com Small Business Mobile Survey
homepreneur

Search Articles

Most liked posts

Get great offers on Twitter from @NSOffers


Recent Articles

Popular Tags

advertising blogging blogs Branding business travel Capital Access Customer Service Email marketing entrepeneurship entrepreneur entrepreneurship Facebook Generational Marketing Google GrowSmartBiz GrowSmartBiz Conference Grow Smart Business Inbound Marketing Job Search lead generation LinkedIn Marketing michael dougherty mobile marketing networking Raising Capital Resources sales sales process SBSI Search Marketing seo small business small business accounting small business hiring small business loans small business marketing small business resources small business success small business technology Small Business Trends social media Technology Twitter Workforce

Categories

Posts Tagged ‘small business loans’

« Older Entries

Small Businesses Seeking Fast Cash Turn Away From Traditional Lending

May 8th, 2012 ::

By Karen Axelton

Small business owners in a hurry for funding are increasingly reluctant to apply to banks for financing for their small businesses, the Merchant Cash and Capital Small Business Finance Survey found. According to the study, many small businesses are not bothering to apply for financing from traditional lenders because they didn’t think they’d be able to qualify. Others were reluctant to apply again after having been turned down for financing in the past.

The study polled entrepreneurs who had applied for a merchant cash advance from Merchant Cash and Capital, a merchant cash advance provider, and found that 42 percent of respondents who had applied for their first merchant cash advance did so because they didn’t think they could qualify for a traditional bank loan.

More than half (57 percent) of those surveyed said they had applied for a small business loan in the past. However, a whopping 76 percent described the process of getting a small business loan from a traditional lender as either “difficult” or “extremely difficult.” And of the 57 percent who had previously applied for a small business loan, 80 percent said they were either declined or had withdrawn their application.

Merchant cash advance companies such as Merchant Cash and Capital provide unsecured financing for businesses including restaurants, retail, service, legal, medical, franchises or ecommerce businesses. The money can be used to cover needs such as inventory, cash flow, expansion, overdue payments and more.

The survey found that small business owners typically use merchant cash advances for short-term needs, including purchasing inventory, payroll, paying taxes or bills, and marketing. Financing expansion was another popular use for the funds.

Clearly, when small business owners are seeking sources of capital quickly, they aren’t looking to traditional lenders as often as they used to. “It’s no surprise that small businesses are suffering from an extreme lack of available financing from traditional lenders and their tight qualifications,” said MCC President and CEO Stephen Sheinbaum in announcing the survey results, “but the depth to which the problem has gone should be of great concern.”

Image by Flickr user myphotosshare blogspot (Creative Commons)

Tags: , , ,
Posted in Capital Access, Raising Capital, Small Business, small business, Uncategorized | No Comments »

Small Businesses Still Struggle to Obtain Access to Credit

February 7th, 2012 ::

By Karen Axelton

Nearly four years after the nation’s financial meltdown, small business owners seeking financing find themselves between a rock and a hard place. Some 90 percent of small business owners say availability of credit is still a problem for small business, reports a new poll by the American Sustainable Business Council, Main Street Alliance and Small Business Majority. The survey of more than 500 small business owners found that 60 percent of small employers have personally faced difficulties trying to obtain loans to grow their businesses.

Getting capital wasn’t always such an issue for entrepreneurs. A 61 percent majority of respondents say it’s harder for them get loans now than it was four years ago, with 29 percent saying it’s much harder. Only 9 percent of respondents say it’s gotten easier to get a loan.

What do small business owners think would help ease the credit crunch? Some 90 percent of business owners support regulatory changes that would make it simpler for community banks and credit unions to lend to small businesses. Another 77 percent support providing incentives for community banks to lend more to entrepreneurs. Specifically, by more than a 2:1 ratio, small business owners support encouraging credit unions to lend more to entrepreneurs by increasing their member lending cap from 12.25 percent of their assets to 27.5 percent of their assets.

A large majority—82 percent of respondents—also supports tighter credit card regulations, such as clearer disclosure of terms and caps on interest rates. In addition, nearly half, or 47 percent, strongly support these kinds of regulations. The survey also found that 52 percent of small business owners have used credit cards to finance their own business.

Another way small business owners think loans could be made more accessible is by reducing collateral requirements. One-fourth of those surveyed have used their homes as a source of capital for their business through a home equity line of credit. With home equity values dropping in many parts of the country, this type of collateral is no longer available to many entrepreneurs.

Finally, the majority of small business owners, or 57 percent, think that reducing the principal on underwater mortgages to the homes’ current market value would boost consumer spending, which would help small businesses regain market share. Nearly three-fourths (73 percent) said the fallout from the mortgage crisis has hurt their businesses by reducing consumer spending and demand.

The poll also asked respondents about some specific proposals put forth in President Obama’s American Jobs Act. The vast majority (69 percent) supports committing $50 billion to new and existing infrastructure projects—such as making improvements to road, bridge and water systems—that would generate new jobs and help increase consumer spending. Another 59 percent favor creating a nationwide wireless network and improving the accessibility of high-speed wireless services, which would benefit both businesses and consumers.

Read the full report here.

Image by Flickr user Rojer (Creative Commons)


 

Tags: ,
Posted in Capital Access, Raising Capital, Small Business, small business | 4 Comments »

Small Biz Resource Tip: Multifunding.com

January 19th, 2012 ::

Multifunding.com

Is your bank small business friendly? Do you want to find out all your options for a small business loan? Multifunding.com was founded by Ami Kassar, a leader in financing for small businesses, and was created to help entrepreneurs find the best financing options available on an individual basis. Applicants simply call to describe their financing story; Multifunding will create a proposal with the best possible options for you. If you decide to move forward, Multifunding will help you create the best possible application and walk you through the loan process. You don’t pay unless you get the loan. Plus, a new tool on Multifunding.com grades 6,800 banks across the U.S. using data from the FDIC.

 

Tags: , ,
Posted in Capital Access, Raising Capital, Resources, Small Business, small business | 1 Comment »

Small Biz Resource Tip: FastUpFront

July 18th, 2011 ::

FastUpFront

All business owners face a time in their careers when they need an influx of cash—fast! Whether a sought-after location opens up, or a major piece of equipment needs replacing, getting a quick loan can be stressful if your credit history is a little shaky or the repayment terms don’t meet your needs. FastUpFront offers small businesses access to money based on the business’s future credit card sales. To get the cash advance businesses must be U.S. based, must already be established and cannot be home-based businesses. Approval can take less than 24 hours and funding can be as fast as 48 hours.

Tags: , ,
Posted in Capital Access, Raising Capital, Resources, Small Business, small business | No Comments »

Getting Business Credit Still Difficult for Small Businesses

July 14th, 2011 ::

 By Maria Valdez Haubrich

Small business owners’ access to capital is still being squeezed, it seems. Entrepreneurs’ ability to get credit when they need it is easing somewhat, but is still in decline compared to pre-recession levels of access to credit, according to the most recent Wells Fargo/Gallup Small Business Index survey.

In the survey, conducted in April, slightly fewer small business owners say credit is difficult to get now than in recent years. However, nearly three times as many say credit is difficult to get compared with the number who said this in 2007.

Business owners were asked, “Over the past 12 months, how easy or difficult has it been for your small business to get credit when you needed it?” In 2007, 54 percent said it was somewhat or very easy to get credit; in 2011, just 21 percent said the same. In 2007, just 11 percent said it was somewhat or very difficult to get credit; in 2011, that figure had risen to 30 percent.

On the positive side, the percentage of small businesses describing access to credit as somewhat or very difficult declined from 35 percent in the prior survey. On the down side, the percentage saying credit is somewhat or very easy to get has remained largely unchanged since mid-2009.

Gallup notes that the collapse of the U.S. housing market continues to be a major factor in small businesses’ problems accessing the credit they need. Before the recession, many small business owners used their homes and real estate to secure business loans and lines of credit. The collapse of home values, which still haven’t rebounded in most parts of the country, combined with tighter lending practices on the part of banks, has virtually wiped out many small business owners’ only source of collateral. In many cases, this is making it nearly impossible to get a business loan or line of credit. “Returning housing to price stability or better is a key to returning easier credit to the nation’s small businesses,” Gallup concludes.

How has the housing collapse affected your business’s credit-worthiness? Are you having trouble getting what you need?

Image by Flickr User Let Ideas Compete (Creative Commons)

Tags: , , ,
Posted in Capital Access, Raising Capital, Small Business, small business | 1 Comment »

Small Business Access to Capital: What’s the Problem?

July 7th, 2011 ::

By Karen Axelton

In late June the House Committee on Small Business held a hearing to explore the state of small business financing. The Policy Dialogue on Entrepreneurship blog reported on the hearing:

Delivering a summary of his report on the State of Small Business Access to Capital, Treasury Secretary Timothy Geithner noted that lots of small businesses were concentrated in areas related to real estate and construction—the industries hardest hit by the financial crisis.

Geithner reiterated how the Small Business Jobs Act of 2010 aimed to provide small business with more access to capital through:

  • modifications to the SBA Capital Access Programs
  • a State Small Business Credit Initiative
  • creation of the Small Business Lending Fund (SBLF)

The two latter initiatives were aimed at improving the amount of capital available to community banks and encouraging them to lend to small business. However, much of the hearing focused on why these efforts don’t seem to have led to results and why small businesses are still struggling to get capital they need. The Committee chair, in particular, noted that there’s a gap between banks having plenty of money to lend, but small businesses saying that they still can’t get money from banks.

Responding to the questions, Secretary Geithner said that the Obama Administration is undertaking a five-point strategic plan to help small businesses expand and invest:

  1. Providing significant tax relief targeted to small businesses
  2. Helping small businesses obtain access to working capital on more favorable terms
  3. Regulatory reform, which includes a government-wide review to address regulations that hinder small businesses
  4. Increasing federal contracting options for small businesses and improving their access to procurement opportunities
  5. Programs to help small businesses access foreign markets and compete overseas

Will these efforts help? It remains to be seen.

Image by Flickr user Cliff 1066 (Creative Commons)

Tags: , ,
Posted in Capital Access, Raising Capital, Small Business, small business | No Comments »

Small Biz Resource Tip: Rapid Advance

June 22nd, 2011 ::

Rapid Advance

There comes a time in every entrepreneur’s life when the business could use a quick influx of working capital—whether it’s to buy additional equipment, add a new product line or fix the air conditioning unit. But there isn’t always cash on hand, especially in a still recovering economy. RapidAdvance offers a quick solution: Fill out a one-page application and RapidAdvance will tell you how much you qualify for within 24 hours. Whether you need the cash for startup or to help grow your business, RapidAdvance can help you secure the funding you need and work out flexible repayment terms.

Tags: , ,
Posted in Capital Access, Raising Capital, Resources, Small Business, small business | No Comments »

New Data on Small Business Lending: Outlook Is Positive

June 14th, 2011 ::

By Karen Axelton

Small business lending showed some positive signs in new data recently released by PayNet. The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of small business financing, increased 17 percent in April compared to the same time a year ago, Reuters reports.

While this was a decline of about 1 percent from the prior month, this was the ninth straight month that the Index had shown a double-digit increase. Those sustained gains are a good sign that small businesses are ready to grow as soon as customer demand for their products and services increases again, said PayNet president and founder William Phelan.

“The fact that small businesses are hanging in there is a good sign for the economy” Phelan told Reuters. “The data tells us [small businesses] are having more of a pause than a major contraction.”

While economic signals have been up and down recently, overall, increased small businesses is considered positive for the economy as a whole because small companies traditionally account for the majority of new hires. The Thomson Reuters/PayNet index has proven to be an accurate predictor of GDP trends about two to five months in advance.

More good news: In separate data released by PayNet recently, fewer companies are falling behind on existing loan payments. This indicates more businesses are ready to take on new loans if needed for growth.

Accounts behind by 30 days or more (considered moderately delinquent) fell to 2.06 percent in April—a typical level before the recession. Accounts 90 days or more behind (considered severely delinquent) fell to 0.64 percent in April from 0.67 percent in March. And accounts behind 180 days or more (in other words, in default and unlikely to ever be paid) dropeed to 0.76 percent of total receivables in April, from 0.77 percent in March.

Overall, these are promising signs. In recent years, small business lending had slowed to a crawl, first by banks tightening their requirements and later by small businesses reluctant to borrow because of concerns over the economy. If small businesses are showing the confidence to take on new debt, that’s a positive thing. Are you ready to take on a loan?

Image by Flickr user Steve Snodgrass (Creative Commons)

Tags: , ,
Posted in Capital Access, Raising Capital, Small Business, small business | No Comments »

Do You Know the Six C’s of Credit?

May 26th, 2011 ::

By Maria Valdez Haubrich

Are you trying to get a loan or line of credit for your small business? Then you need to know what bankers are thinking when they consider your application. One key to success in obtaining the financing you need is to understand the “six C’s of credit.” Here’s a closer look:

1. Character: Bankers will consider your personal character, which includes both your personal and business credit history. Character depends a great deal on other people’s impressions of you, including your trustworthiness and integrity. The banker will consider your references (are they, themselves, of good character?) as well as your experience in the business and/or industry. Last, but not least, what kind of impression do you make on the banker?

2. Capacity: Does your business have the ability to repay the money you are borrowing? Bankers don’t want to lend you money if it won’t have a positive result on your company; nor do they want to throw good money after bad with a loan that will just maintain the status quo. They want to see growth as a result of their investment so that they can get their loan back with interest. How soon will your business show a profit as a result of the changes you plan to make with the loan proceeds? Will the profit be sustainable and how big will it be? These are among the biggest questions bankers want answered.

3. Capital: How much capital do you and your business already have? The saying “it takes money to make money” applies here. Bankers will want to see that you have personally invested in your business and are willing to invest more. If you aren’t willing to put money into the business, why should they be? They also want to see that your equity in the business is growing.

 

4. Collateral: Collateral is extremely important in getting a small business loan. The bank will want to see that, in case the profits you project from the business don’t pan out, you have a “backup plan” for how they will get repaid. This can include a secondary source of repayment; a guarantee from a third party; or assets owned by you or your business. Intangible assets like goodwill or expertise don’t count; banks want to see tangible assets such as equipment, property, inventory or accounts receivable that could be sold to pay off the loan if necessary.

5. Conditions: This refers to the loan terms, including how much you are requesting, the length of the loan and the purpose you intend to use the money for. Conditions also encompass the current economic state of your industry and your region. For instance, if you own a restaurant and the restaurant industry as a whole is struggling, you will have to work extra hard to show why your particular restaurant won’t be affected by the conditions that are affecting other eateries.

6. Cash Flow: Last, but not least, bankers will want to know how the loan or line of credit will affect your business’s cash flow. How will you use the money from the loan? Have a detailed plan for what you will do and how it will help your business grow. The point is, bankers want to see that you have adequate cash flow to repay your loan.

Getting bank financing is still not easy in today’s economy—but if you have the six C’s of credit under control, you’ll greatly improve your chances of success.

Image by Flickr user Beast of Traal (Creative Commons)

Tags: , ,
Posted in Capital Access, Raising Capital, Small Business, Uncategorized | 2 Comments »

Most Small Businesses Use Savings, Not Financing, to Grow

May 19th, 2011 ::

By Maria Valdez Haubrich

Many small business experts urge startup firm founders to use their personal savings to finance business startup, rather than trying to get financing from outside sources. This was good advice even before the Great Recession hit, and following this advice has become even smarter since then.

Most startup entrepreneurs are heeding that advice, a new study shows. Preliminary data from the 2010 Survey of Consumer Finances, a report by the Federal Reserve that’s scheduled to be released in full in 2012, show that more than 70 percent of U.S. small businesses use personal savings or assets as a main source of business funding, The Wall Street Journal reports.

But this doesn’t apply only to startups. As the businesses grow and become more established, one-third of their owners say they still use their personal savings to run, grow and expand the business. In comparison, a mere 5 percent said they use credit cards or business loans.

Perhaps it shouldn’t be surprising that small business owners are using their own money to run and grow companies, instead of trying to get loans or outside investment. During the depths of the recession, many entrepreneurs had their loans called in by banks—in some cases, even if they’d never missed a payment. And still others were turned down for expansion loans despite having orders in hand and proof of demand for their products or services.

Such behavior by banks seems to have convinced many small business owners they’re better off relying on no one but themselves financially. In fact, out of all the small businesses surveyed (for survey purposes, defined as companies with fewer than 500 employees), a whopping 80 percent say they have not even applied for a business loan in the last five years.

Surprisingly, however, the survey also shows that small business owners’ fears of being turned down by banks may be unfounded. Of those small businesses that applied for loans, only about 12 percent were denied. And almost every small business owner whose loan was approved got the full amount of financing he or she was seeking.

If you’ve let “fear of failure” hold you back from seeking a bank loan, maybe now is the time to make your move.

Image by Flickr user Jamie Welsh (Creative Commons)

Tags: , ,
Posted in Capital Access, Raising Capital, Small Business | No Comments »

« Older Entries