3 Reassuring Small Business Funding Tips for Established Businesses
Many small business owners report having difficulty financing their businesses. Whether because of a lack of collateral, bad credit, or anything in between, there are many roadblocks that can stand in the way of business owners and their dreams of improvement. However, there are a few things that business owners should know that can help them get over the first mental hurdles they will face when it comes time to start looking for financing. Small business funding is more scarce now than it used to be, but it has not simply gone away. the American entrepreneurial spirit will always find a way to fill the gaps left in the economic climate, and small business owners in particular are a hardy bunch. When it seems as if business funding from loans and grants is a pipe dream, and that every lender and credit union you visit is eager to turn you away, take a deep breath and consider these three key points.
1) First of all, there is more than one way to get business funding. Entrepreneurs of all stripes will most likely be aware of the major types of small business loans that exist. These include secured and unsecured business loans, equipment financing, and even bad credit business loans in some cases. However, they are generally not aware of the wide array of small business loan alternatives that are specifically made for business owners who are dissatisfied with the traditional lending establishment. A merchant cash advance represents one of the most business optimized financial products of this stripe. One can be obtained with minimal paperwork and down time, making it an attractive option for business owners who are already in business but are looking to grow beyond the constraints of their existing cash flows.
2) You have bad credit? Don’t panic. Bad credit is seen as the kiss of death by banks these days. After the financial crises that rocked the lending world, banks tightened up their requirements and one of the easiest ways to do that was to cut off business owners with bad credit scores. Unfortunately, this has the adverse effect of punishing entrepreneurs with healthy businesses who may have bad credit for any number of reasons including identity theft and poor credit card management when they were younger. Even unpaid student loans can have a hefty toll on the credit of an otherwise healthy business owner. The most obvious avenues toward funding will generally be cut off if you do have a bad credit score, but as stated above, a merchant cash advance or other non-traditional business funding program takes a more personalized approach, getting to know you and your business and holistically evaluating your needs.
3) You can build a relationship while building your business. An example of how relationships can make a big difference when it comes to small business funding can be found in this story. One of our clients came to us with a business they were managing that was making enough to get by, but not enough to grow. Having been turned away by all of the banks she applied to before coming to us, she was not optimistic about what we could do for her since she had bad credit and was the owner of a beauty salon, which is generally viewed as a high risk business model. After receiving her first round of business funding, she was able to add more chairs to her salon and increase her business. Because she established a relationship with us and proved that she was the responsible business owner we thought she was, we were able to continue providing her with direct capital and our funding amounts grew along with her business. This approach is unique, as Horizon is not a traditional bank. We are a direct funding source that takes the time to understand the needs of our clients, many of whom were unable to find funding before they discovered our services. As a word to all small business owners who are upset with their situations and feel stymied by their financial issues, there are options out there for you, if you take the time to look for them.
Hopefully these three pieces of advice will reassure those who are low on faith when it comes to getting financial assistance for their established businesses. Good luck to all, and please feel free to learn more about merchant cash advance as an alternative to small business loan programs.
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