Alternative Financing Relieves Small Businesses Facing Tight Credit Markets

Small businesses continue to seek alternative financing while banks and financial institutions tighten the credit markets with lowering credit card limits and closing lines of credit or severely reducing lending levels. These shrinking credit avenues force business owners to revisit traditional bank loans and SBA loans…only to be uncomfortably reminded why traditional lending seems next to impossible for small and start-up businesses to access.

As recently reported in the Washington Post, “Small businesses are ‘getting hit from both sides,’ said Sandy K. Baruah, acting administrator of the SBA, because even the companies that have long relationships with financial institutions and are in solid financial condition are no longer getting new loans approved and are having existing lines curtailed.”

Fortunately for many small business owners, they have been able to make productive use of merchant cash advances. Where traditional loans seek low-risk business opportunities and full collateralization of the loan, merchant cash advance companies take on the risk of the advance and, instead of collateral, use the pledge of a percent of future Visa and MasterCard sales to secure repayment.

As an alternative business financing avenue, business cash advances do not have a set pay-off date or a fixed schedule of payments. This frees business owners from the worry of late payments and their attendant charges and penalties. The increase or decrease in sales simply speeds up or slows down respectively the final pay-off of the advance.

What many merchants most appreciate about business cash advances is the fast application, approval and funding timeline. First-time business owners are usually approved and funded in less than two weeks. No large financial paperwork with the added expenses of working with accountants needs to be prepared.

US Business Finance Corp has helped many businesses meet their operating capital emergencies or cash flow shortfalls. Contact our small business financing specialists to apply for your merchant cash advance. Don’t let the tight credit markets ruin the end of your year!

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Filed under: Alternative Capital, Business Cash Advance, Business Finance 101, Money Matters - Business, National Economy