Many small business owners are waiting for the fallout from the latest rounds of negotiations on the Fiscal Cliff before making any major decisions. But there are others who need to do something now to shore up their cash flow. Waiting another two to three months is not an option.
Big banks seem to cater more to big business than the smaller companies. Despite improvement last year, the December 2012 Biz2Credit Small Business Lending Index shows that the big banks ($10B+ in assets) still approve less than 15% of loan applications from small business owners.
Small business loans are structured so that management has the ready cash that is needed in the short term and with payments that are easy to manage. Lenders tend to look at factors other than just credit scores, like accounts receivable, sales history and typical cash flow. Loan and payments can be customized for the borrower.
If you examine your books and it is clear that you send your billing out by the 10th of each month, but the money does not seem to come in until the 20th-25th, a small business loan can help you pay your bills if they are due during a period of the month when you are in a cash crunch.
Applying for small business finance is easier than it used to be. Technology has reduced paperwork and provided quicker turnaround times. Platforms like Biz2Credit.com can get an answer in several days instead of several weeks. Thus an anxious company owner can have cash in the bank sooner rather than later. Funding might come from a bank, but borrowers are also matched with credit unions and non-traditional lenders such as Community Development Financial Institutions (CDFI), micro-lenders and merchant cash advance lenders, to name a few.
This article was submitted by Mary Branca, she has a Bachelors of Journalism from the University of Georgia and spent 20 years in marketing management with national companies in the Southeast, Northeast and Midwest. She has combined her marketing experience with her passion for writing.