According to the Biz2Credit small business lending index, approvals for small businesses from big banks fell in October, the first decline in 7 months of growth, dipping by 0.2% from 20.6% in September. The slight decline still reflects some of the strongest numbers since the beginning of the Great Recession, and as business confidence continues to increase (although not necessarily the perception of success), both hard and soft indicators of economic recovery seem to be moving in the right direction, albeit at a sluggish pace. Business owners may be more wary about debt now than at the beginning of the recession. One factor that may effect loan volumes is the fact that small business borrowers have been reticent about taking on debt, with many only seeking financing when it comes time to make capital improvements that are simply outside of the reach of their normal cash flows. For some with bad credit, seeking bank financing has been a relatively fruitless endeavor, with the alternative being seeking

Financing is an often mentioned yet poorly understood aspect of running a business. In addition to being vital when looking for business loans or bad credit alternatives, it’s important to understand in terms of pricing and time in the course of the day to day. In an Entrepreneur.com article, BlueVine CEO and Founder Eyal Lifshitz offered some perspective on common financing errors made by small business owners, with the last point focusing on discounts related to expediting collections. The article points out that when a discount is offered in order to get paid faster, financing comes into play. A 10 percent discount for up front payment would seem advantageous, until compared with a scenario wherein financing is obtained for the month at a 4% rate for the month, allowing for cash on hand to last the month, with the full collection amount being gathered in the 30 day term. In the end this strategy saves the business owner 6% of what they would have lost

As reported by Yahoo Small Business, the WAIN Street monthly business default index reports a decrease in default rate for small business loans from the first half of the year by .11 percent for a rate of 6.98 percent, with rates at pre-recession levels. Additionally, the index revealed that the lowest default rates were concentrated around the smallest of the small businesses included in the index, with a 4.05 percent default rate among sole proprietors and 5.65 percent among those with fewer than 20 employees. With strong credit performance coming from these businesses, it bodes well for the growth of their credit options going into the next few quarters. The smallest SMBs have had some of the hardest times applying for financing from traditional banks. The fact that they are some of the strongest performers when it comes to paying back debt obligations makes this fact even more pronounced, however, due to excessive costs related to underwriting small business loans that do not slide with the

  While on a case by case basis, entrepreneurs can vary widely in both their enjoyment of their lifestyles and their approach towards managing their businesses, according to a report issued by Global Entrepreneurship Monitor last year, when it comes to overall satisfaction women have the edge over their male counterparts. Forbes reported on the findings, in addition interviewing female entrepreneurs who related the engagement inherent in being a business owner as one of the draws of the lifestyle. The results of the survey offer some encouragement to female business owners, who can often experience difficulty starting out disproportionate to their male counterparts when it comes to courting funding from VC’s and applying for loans. The study revealed that, while female business owners who had passed the start up phase of their business growth generally reported higher levels of contentment than their male counterparts, during the start up phase they were actually less likely to be content than male entrepreneurs. On top of this, in

Alternatives to small business loans have grown both in popularity and exposure over the last few years, primarily because of a lack of other financing options for many small businesses that don’t meet the heightened credit requirements many banks adopted in response to the Great Recession. While bank lending to small businesses has ostensibly thawed, it is still not enough for the majority of small business owners, many of whom are either too small, don’t possess enough collateral, or are too new to successfully approach a bank. Alternative capital attempts to fill this gap in the credit market with financing options that are both expedited and available to businesses with financial histories that would disqualify them from a bank loan. Business owners should view alternative capital as part of their road to business loan eligibility. While alternative capital has higher costs associated with it than bank loans, the expedience with which they can be accessed as well as their wide availability make them extremely useful in

  In a press release from CDC Loan Experts, three strong reasons were put forward for business owners owning their storefronts. Firstly, purchasing a piece of commercial real estate is a long term investment that can be turned around for profit later, rented out, or kept as a business location without the obligation of rent. Secondary to this is the fact that payments for rent may be contingent on market prices and therefore subject to fluctuation. Businesses that would be forced to move in the event of a rent increase will pay the same payment for the property they are purchasing, making buying a good strategy for those looking to stay in a location for the long term. Lastly, a purchase payment may be less expensive than rent would be in the first place, with the bonus of eventually owning the piece of property. Should you invest in purchasing your location? If business owners are planing on staying in their physical location for the next ten

  We’ve already written about a variety of grant scam, where business owners are conned into paying an up front fee in the hopes of receiving free money from either the government or a private organization. The problem, far from going away, has only persisted as businesses seek whatever financial assistance they can. The promise of a grant can be so welcome that they fail to stop and scrutinize the proposal being sent to them. A recent post on the SBA loans and grants forum on the subject of loan scams was submitted by a forum user who claimed that they were offered a loan, but the materials that they were given for their “application” were completely irrelevant to their business, instead probing for personal information. This type of manipulation relies on misconceptions surrounding who provides small business grants as well as what businesses are able to apply. The perception that there is free money out there is harmful to business owners, allowing them to

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

Small business owners with bad credit have financing challenges which make it more important that they pay attention to their cash flows. The dearth of traditional small business loans for bad credit applicants means that for financing they will often have to seek out a working relationship with an alternative capital provider, where bank activity is more important than credit when underwriting. Additionally, the marketing budget of their company has to be tightly managed in order to ensure that it is able to create ROI, since every dollar that goes out the door needs to be made back with little room for error. In order to make sure that they are not losing money, small business owners should strive to create good habits for themselves and be cognizant of the effects of their budgeting choices. Choosing to invest in one area on a limited budget means that you may have to divert resources from another, making identifying the strongest performing areas of your business into

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