3 Places To Search For A Business Loan

As banks continue to make the news about not providing loans to small businesses, more and more entrepreneurs are looking for new places to find capital – capital to help them grow or sustain their companies.

Banks are not and have never been the only place for business loans.  But, banks do offer some of the lowest rates which can help in the affordability of the payments.  Thus, if your business doesn’t qualify for a bank loan – then, make that your goal.  Find other ways to fund your business until that point that you do qualify.

There are three (3) main places to start your business loan search:

1) Google or Similar Search Engines:
The problem here, with most of the major search engines and similar directories, is that the information is not always the most relevant.  Example, your small manufacturing company is seeking a business loan to expand your operations.  You search for “small business loan” and the first 5 pages of the search results relate to business cash advances. 

While business cash advances may be solid business loan options, they are based on a company’s credit card receipts – something that many small manufacturing don’t have. 

Thus, you waste a lot of time wading through those results.

The reason is that these business cash advance companies are very good at their SEO for key words like business loans – thus they rank high but do your business no good unless that is what you are actually looking for.

2) SBA’s Site (sba.gov):
Great site with a lot of information.  However, they focus more on SBA loans and lenders then other relevant types of loans and lenders.  And, most SBA loans still have to go through your bank – so you are right back in the same situation.  However, the SBA’s site does offer some good resources and advice.

3) Business Money Today’s Free Search Function:
Here, business needs only to select (from drop down menus) a few criteria about their business (no personal information required).  Then, they can compare business financing companies that not only have the types of loan programs your business is seeking but these companies actually want to work with you.  And, you can compare them as apples to apples. 

Many of these financial companies provide a certain type of business loan only and thus have programs to meet almost all businesses needs or stage of development (it is their only business after all).

There are no costs to be listed in this search function or any costs to use it – it is free all the way around.

The only requirement (requirement for those wishing to be listed) is that they are actual funders and not some fly-by-night company looking to make a quick score before moving on.

If your business is in need of a business loan but you are just not sure where to start, check out these options.  You just never know how easy it really can be.

Would You Like A Business Loan With Your Caramel Macchiato?

No, this is not a loan to cover the cost of your coffee.

Starbucks is seeding a new business loan fund with $5 million.  Starbuck’s customers can also donate to the program.

Starbucks, through this new business loan program called “Create Jobs For USA”, in conjunction with the Opportunity Finance Network® (OFN);

“will provide loans to underserved community businesses.”

In fact, Starbucks thinks that for every $5 in donations, the fund will leverage some 700% or $35 of financial support to these businesses.

According to CEO Howard Schultz, “We’ve got to thaw the channels of credit so that community businesses can start hiring again.”

So, if you are also looking to help your local community grow new businesses and you are a customer of Starbucks, then by all means donate as your $5 donation could really make an impact.

Or, if you are a small business in an underserved community and have no hope of securing a business loan from your local bank, this program may just be right for you.

Personally, it is nice to see Starbucks giving back a little given the price for a cup of coffee.

We at Business Money Today wish them much success in this endeavor as all small businesses can use any and all help these days – starts November 1^st.

For More About This Program, Please Visit The Create Jobs For USA Site.

Can You Get A Business Loan With Bad Credit?

The answer is yes! 

There are many ways to get a business loan with bad credit.  In fact, there are business loans based solely on the performance of your business. 

And, isn’t that what you want – a loan based on your business and not on you (the business owner)? 

Some new lenders have figured out that there are missed opportunities in the small business market – strong companies that have business owners with bad credit – and thus have created new business loan products just for them. 

One in particular is a Bank Statement Loan.  If your business continually deposits cash into your bank account, you can factor that performance for a business loan. 

These new lenders will look at your past 6 months bank statements and lend to you based on your average bank balances.  No credit score required. 

Thus, if your business is still generating revenue and needs a business loan but doesn’t want it based on the owner’s credit – these new loans may be worth a look.

Read more about these bad credit business loans.

Raising Capital For Your Small Business

In the market for a business loan to start or grow your new business?  Well, this might be your first real business challenge – one that will make or break your company. 

Accessing capital from traditional resources like banks and other financial institutions is almost out of the question these days unless you bring tons of assets and cash flow with you (some things that most new businesses or start-ups just do not have – or, if they do have them then they don’t need outside financing like business loans or working capital lines of credit). 

So then, what is your business to do? 

It starts with management – meaning managing the problem; just like you will eventually manage your employees, customers, suppliers, production, etc.  The only real difference is that if you do this right in the beginning, you might not have to ever do it again. 

Some simple tips to manage your capital raising process are: 

• Understand your true needs.  Don’t guest but know.
• Work with other parties who, in the end, want what you want.
• Utilize the resources and networks your already have – you just never know what you might uncover. 

To see more detail on the above tips and better understand how your new or small, growing business can raise capital today, please see this Business Money Today article.

The State of Small Business Lending

The Office of Advocacy, part of the Small Business Administration, has just released several new reports / studies regarding the current state of small business lending and its impact on these smaller firms.

Two of these reports follow:

“Bank Liquidity Pressures and the Availability of Bank Credit to Small Firms: Was the 2007-2009 Credit Crisis Different?,” authored by Joe Peek, finds that liquidity of bank assets became a factor in the financial crisis, as healthier banks tended to shy away from small C&I and small CRE loans.”

A copy of the report is located at:
http://www.sba.gov/sites/default/files/files/388tot.pdf and the research summary can be found at: http://www.sba.gov/sites/default/files/files/rs388.pdf.

“The Growing Impact of Credit Unions on Small Business Lending,” authored by James Wilcox. State and national data for banks and credit unions for 1986-2010 show credit unions may have provided extra business lending in response to reductions in bank lending.”

A copy of the report is located at:
http://www.sba.gov/sites/default/files/files/387tot.pdf and the research summary can be found at: http://www.sba.gov/sites/default/files/files/rs387.pdf.

If you are in the market for new capital, these reports could really save you a bit of time and a lot of headache by simply understanding the current issues around accessing credit and who is actually provide business loans to businesses like yours.

Lending Programs For Others: Why Not Here?

According to CBSAltanta.com in an article titled, “Clintonlaunches business loan program inHaiti”

It seems that former President Clinton has launched a new $20 million small business loan program inHaiti.  In fact, the fund program has just funded $415,000 to local company that produces colorful goods such as carnival masks, sculptures and paintings for export.

Great.  Love these types of programs and it really makes one feel good that the people ofHaitiare getting some form of help to revitalize their devastated economy.

But, what about us here in the good oldU.S.A.?

Why don’t we have programs like that here?  There are many areas in our country that have been devastated by high unemployment and decades of poor economic growth.  These areas could use programs like this to help them rebuild and grow new small business that can export products, create jobs and bring new wealth into those communities.

I just don’t understand how we could even attempt to help other countries when we can’t even help ourselves.  Why not getAmericaback on its feet first – them we would be in a position to help everyone else in the world if that is what we want to do.

But, helping others first might make Mr. Clinton feel good about himself, but what happens in a few years when we too are just as devastated – who is going to launch a business loan fund for us?

We have to get on our feet first – use that $20 million fund and many more like it – to help rebuild our country first.

It’s almost like asking someone who has just lost both of their legs to run a marathon in support of others who just lost their legs.  Might look good on paper and make the news but it just does not make sense.

What do you think?

New Small Business Lending Initiative By The SBA

The SBA is kicking off a new lending program (Intermediary Lending Pilot Program) to fund start-up businesses, newly established or growing businesses in underserved markets.

The program will provide lendable funds to intermediates in those areas who in turn may fund (make loans to) local businesses for up to $200,000.

As part of the 2010 jobs act, this program is intended to increase access to capital for many businesses that might not be able to obtain capital (money) elsewhere as well as, hopefully, allow these businesses to create and fulfill jobs.

Initially, the program will fund the following 20 communities who can start making local small business loans.

Then, in 2012, will fund another 20 underserved communities.  Plus, if all goes well and congress approves more funding, this program will continue into 2013.

I personally love the idea behind this program – getting more small or new business funding opportunities so that they can grow locally. As they lift up their communities, they will lift up their states.  As states lift up, they will lift up our nation.  Any economy growth in this country will have to start as a grass roots growth initiative and it is nice to see the SBA recognize this.

But, I have two issues this program that I fear will make it irrelevant in the long-run.

1) The program states, “The new Intermediary Lending Pilot Program will provide direct loans up to $1 million to 20 community organizations or intermediaries.”  My problem is these community organizations are not accountable to anything or anyone but themselves. 

I fear that these organizations will provide these funds or approve these small business loans, not to companies that will actually put them to the greatest use in their communities, but to companies and other groups that fit either their own social or political agenda.

Thus, instead of these loans helping businesses who actually need help and could do the most with it for their communities those that benefit will merely be the community organizations themselves and a few of their select friends or personal projects.

I have personal experience with these types of programs.  When I ran a business incubator, our state offered an investment programs (similar to a venture capital fund) for technology companies who would create jobs as well as bring in new money and highly sought after talent into the state.

The problem was that all applications from our region for this investment programs had to go through a community organization in a sister city.  What happened during the first four quarterly application periods was that all outside application were denied.  The only applications that were accepted and presented to the state were their own local application related to life science companies – funding and growing local life science companies was the main mission of this community organization.

But, when these applications were reviewed by the state for final approval, they were denied.  Thus, not only did the technology companies we sent to this fund via their applications lose out on this opportunity, but our entire region lost out due to the self-interest of these so called “community organizations.”

2) Take a look at the list of supposedly underserved communities that will be funded this year. These are all very large cities in areas and states that should be able to take care of their own.

It seems that this list was chosen not based on need or potential but based on political clout, political favors and the number of union organization.

I live inTexasand I can guarantee you thatAustinis not underserved!  Just because their local politicians overspend for their own good does not mean that these community are either underserved or in need out SBA intermediate funding.

So, again while the principals behind these programs are very solid in creating new economic growth, it would seem that they were taken over by the ever growing political animal in our country – which I fear will render this program null and avoid in the long-run.

What a shame – but, I guess only time will tell.

Do you think this is a legitimate program to help small business or just another way to push our taxpayer’s money into politically important areas?

To read more – see this article by Market Watch

Will Missing The Debt Ceiling Really Decrease Your Chances For A Business Loan

The quick answer is that it really shouldn’t.

While many banks and other financial companies do get much of their lendable capital from the government – and, if the government’s rates rise – they should pass that along to the banks; who will pass it along to you.

But, most banks no longer price their business loans base on their costs of funds.  Most either base their loan interest rates on what investors who buy their loans require (usually more than they can make from other investments) or based on their own investors – those investors that invest in these financial companies and expect a certain level of return.

But, the likely answer is yes.  The reason is that these same financial companies will use any excess to raise rates – in fact, even before this debt ceiling debacle even came to a head a few weeks ago, they had already started to use it to raise both their rates and fees.

We have to face a simple fact of business life right now.  With uncertainty in business (which we have faced for years now) and with increased uncertainty from consumers (a growing phenomenon) – prices are going to rise across the board.  Which means that business loans are going to be even harder to get and if/when received will cost much more.

We think that this trend will continue until after the 2012 elections next November.  The reason is that everyone is looking to our government to fix these problems but our government is only concerned about the next election and staying in or changing the power structure.

Until that is over and behind us, we, businesses and consumers, are simply just going to have to bare the brunt of it.

Let’s just hope that it doesn’t get so bad that we cannot get out of it in 2013!

Looking for a business loan today – before they dry up even more?  Try our free business loan search function.

Small Business Lending On the Decline Again!

The SBA just released its Quarterly Lending Bulletin and the news is not good for small businesses seeking business loans.

Overall small business lending is down and continues to trend down.

Large banks have decreased their lending to small firms by some 4.9%.

The only bright spot is that small banks are stepping up to fill this lending gap. But, they seem to be struggling to meet all the demand.

Small banks increased their lending to small business by some 3.1%. While trending in the right direction, no where near enough to make up from the losses from larger banks.

See the SBA’s Bulletin:

New Form of a Business Cash Advance

Business Cash Advances have been around for a while. A business cash advance is essentially an advance against your businesses future credit card sales.

Thus, if you have your customers paying by credit and debt cards, a business cash advance company could advance you or your business (let’s say) up to 6 months of your current monthly volume (each company has their own level at which they advance).

Thus, if your business is bringing in $10,000 a month from credit card sales – you could potentially receive $60,000 or more in a working capital cash advance.

Then, your business would pay it back – say at 5% per month. This means that the advance company would take 5% of your monthly credit card sales ($500 in this case) until the advance was paid back to include all fees and interest.

The problem here is that these advances can get a bit expensive over time and as they have become more main stream in business financing (since the bank disappeared) they are getting harder for business owners to qualify for (these advance companies are all competing for the best companies and – like the banks – are forgetting about everyone else).

But, leave it to a couple of ingenious entrepreneurs to come up with a new form of cash advance that fills this new funding gap left behind by all these other main stream players.

These new lending products offer:

Lower interest rates (sometimes 30% to 50% lower),
No upfront fees,
No new equipment to buy or a requirement to change your processor,
And, for business owners with very low credit scores.

We have just recently been reading about and researching these products and have to say we are a bit impressed. There is a huge funding gap for Main Street and other smaller businesses that these new products just might fill.

Now, we are not promoting these products and not all businesses will qualify (especially if your business is not retail or service) but, if your bank keeps saying ‘no’ – this might be an option to help your business turn the corner.

Just search for alternative business or merchant cash advances – then compare them to traditional business cash advances or to each other to see which you would qualify for best.