As the credit market for small business lending continues to feel the aftereffects of the great recession, small businesses are still struggling to obtain loans from the traditional banking establishment. In a recent article that appeared on, former SBA Chief Karen Mill’s Harvard Business School paper was cited revealing just how tough the recession was for smaller businesses, as well as the resulting “credit crunch” on the part of banks whose after-effects are still being felt today. The paper revealed the thought processes behind banks deciding to move away from smaller loans, since within traditional banking the costs of underwriting a hundred thousand dollar loan are comparable to the costs of underwriting a million dollar loan, but with a lower profit margin for the bank. Alternative capital allows these markets to be served quickly and effectively. One of the reasons why alternative capital represents the potential for introducing major change to the way banking works is that within the industry, a different approach to

Onboarding is an important component of the client experience, and every small business should spend time optimizing the way in which new customers are introduced to their brand as well as appraised of customer support information. The same way that you make efforts to integrate new employees so that they can make the maximum Making a positive impression as a brand can pay dividends through the length of a relationship, making it easier to interface with clients who trust in the professionalism and experience behind your business. Create an automated onboarding email. There are a few ways that your business can set up an automatically triggering onboarding email. If you are using a lead form on your website, programming an email welcoming a new customer to your service is a decent idea. Aside from this, you can also create steps that will automatically generate an email in CRM suites, such as SalesForce. An onboarding email should include relevant information for new customers, for example: A brief introduction

The difference between gross revenues and profit within a small business can be significant when overhead is brought into the picture. A business that is making many thousands of dollars in gross revenues may find that its actual profit margin is far below what one might have guessed offhand. Comparing the numbers between gross revenues and profit within your business can help create a more illustrative picture than looking at gross revenues alone, which is often the first thing that business owners do when reviewing monthly sales activity. Taking a deeper look at the accounting behind a small business, in particular a business that may be in extenuating circumstances due to bad credit, is an important part of management and should be done regularly enough to capture significant sales data. Monitoring gross revenues is important should business owners seek alternative capital. How much small business owners can qualify for when applying for bad credit business loan alternatives is directly influenced by their gross monthly sales, so

In the aftermath of Hurricane Sandy, the US Small Business Administration was widely criticized for what many saw to be a sluggish response to the natural disaster, where many businesses that needed aid in the form of SBA backed loans were not able to have their applications processed within 30 day, with the average of 51 days turnaround for disaster loans. Now, watchdogs tasked with monitoring the Federal organization claim that the numbers posted by the SBA were padded by a large number of fast redirections of applicants for bad credit business loans. As reported by, 40% of the total disaster loan requests processed were bad credit loan requests which are typically diverted out of the main application channel within 3 days. Bad credit business loan applicants would significantly effect average processing time. If 40% of the reported applications processed were quickly diverted to other relief channels, removing them from the average processing time would have major implications regarding the average processing time of the

Social media is considered by some small business owners as the great equalizer, while others think of it as more of a nuisance than a tool, however for a wide range of businesses there is a large utility in promoted posts and advertisement whether or not they are actually updating their page every day, week or month. However, in order to make sure that they don’t simply waste money trying to get a desired result from their social media marketing there should be a set of procedures that they engage in. Typically a business on a budget should avoid grasping for their target audience by sending out a pricey and poorly targeted blast, which is different from using social media promotion in order to figure out what message an already identified target demographic responds the best to. Posting regularly on social media can help identify where to allocate paid boosts. If at all possible, small business owners who are really serious about boosting the reach of

While obtaining business financing to have cash on hand is a valid strategy in its own right, many times small business owners, in particular those with bad credit, will choose to take financing in order to make a purchase or a hire that adds value to their business. Adding value that can pay back their purchase over time is a prudent  way to deploy funding. Bad credit can keep business owners from getting traditional loans, but through alternative capital, bad credit applicants can still obtain the resources they need to invest in opportunities for business growth that can pay them back. Equipment purchases. A bad credit business loan alternative is able to be used much more quickly than a bank loan, making it possible to take one out in order to take advantage of a limited time offer on a piece of equipment. It’s also a potential solution for a demand from a client that can only be met with a new piece of equipment. Before

Bad credit business loan alternatives give business owners who can’t meet the criteria for traditional business loan programs options for gaining liquid capital. For those whose bad credit would otherwise prevent them from pursing important opportunities for growth, they can be a valuable tool. One common aspect of this type of financing is that an advance is generally able to be renewed for better terms provided that the business is still making sales. For those who are able to use their initial advance to grow, the availability of another round of financing can potentially open even more doors when used in a strategic way. Compound on successful marketing. One common reason that business owners apply for bad credit business loan alternatives is because they are looking to invest in marketing in order to grow their customer base. Should they discover a technique that is producing a large amount of return, when they become eligible for a renewal they may seek to allocate that available capital into

  Bad credit business loan alternatives allow small business owners with poor credit scores to gain access to capital, but work differently than traditional loans. While these products can help businesses by providing financing where they would otherwise not be able to get it, the costs are higher than a typical loan and can vary greatly depending on the company, the credit and sales strength of the applicant and the number of times they have taken out an advance. In order to make sure that a business owner’s application goes through with the highest chance of being funded, they should be aware of a few important aspects of their business that they should get in order first. Research the companies you are considering. Just like a traditional bank, providers of business loan alternatives come in many sizes and some will naturally be disposed to work with greater or lower levels of risk. The higher the perceived risk on the part of the business applying for financing, the

Across the country, local journals and National news sites alike are publishing articles on the reticence to hire new employees among small business owners. Some of the reasons hiring freeze include a lack of sufficient cash flow caused by a need for more clients or by market share taken up by tough competition. In an article from the Associated Press, both the pressures to attract new business and the fear of losing current income streams are stopping small business owners from adding jobs more aggressively. Both of these concerns ultimately come down to the problem of not having steady cash flows, which can be hard to predict with both fast changing market conditions and the looming memory of the recent Government shutdown and the shadow of the great recession. Business owners should finance strategically to maintain productivity. Offering overtime programs to employees willing to work longer hours is one of the techniques the business owners in the AP article used in order to get things done

While the credit market for small business owners in the wake of the great recession has seen traditional loan options evaporate for all but mid to large sized businesses with viable credit, the need for working capital on the part of small businesses outside this range has not gone away. On the contrary, in order for businesses to effectively grow, many will at some point need to take a business loan, bad credit loan alternative or other type of financing. In the case of businesses that are growing but have very little in the way of assets, one option for procuring financing is to leverage their history of sales growth as the main criteria for underwriting a cash advance. Even if the business owner does not have collateral, such as a home or equipment, that they would otherwise use to secure a bad credit loan product, they can use the information contained in their last three months of banks statements to demonstrate to a financing

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