US Business Finance Blog

Avoid Your Small Business Suffering From Banks Reduced Lending

Posted on February 25th, 2009 by Author

Small businesses relying on traditional loans from banks are suffering in the ongoing economic downturn. However, companies that explored alternative business financing venues have been able to avoid the tight credit markets and keep operating, and even growing, using merchant cash advances.

The Federal Reserve’s Senior Loan Officer Opinion Survey reported that 75% of the surveyed banks had made their lending standards more stringent for small businesses trying to obtain loans. As a result of lower sales and loss of credit lines and small business loan opportunities, small businesses are more apt to let go employees and cut benefits.

US Business Finance Corp has found that small businesses with Visa and MasterCard merchant accounts have been able to tap business cash advances quickly to handle short-term capital emergencies, inventory buying or meeting quarterly tax payments. Using bursts of business that various holidays bring, many merchants see their cash advances getting paid off sooner.

Merchant cash advances are alternative funding solutions where the finance company takes on the funding risk and does not demand securities or collateral. In 2008, the Small Business Administration (SBA) saw its 7(a) loan guarantee program back only 70% as many loans as in 2007. Many small businesses have found the SBA’s raised loan criteria to be just as stringent as the local banks and don’t see the need to wade through the additional paperwork only to get turned down for an SBA-backed loan.

Small businesses using personal credit card cash advances instead of merchant cash advances find themselves in a double-bind, paying high interest and lowering their credit scores in order to fund their business. The double bind initially serves to build the business and cash flow that banks want to see, but hinder later loan applications due to the lowered credit score.

With business cash advances, credit scores are not affected and payments are made sooner with the increased cash flow. Small businesses regularly use the alternative financing to set their business up for better terms with traditional financing sources.

If your small business is in need of a fast capital infusion for meeting payroll, inventory needs or cash emergencies – turn to the merchant cash advance specialists at US Business Finance Corp. Our experts are ready to help you with the fast application process and get your business back in top form.

Merchant Cash Advance Companies Missing The Banks’ Pain

Posted on February 19th, 2009 by Author

While banks seek federal bailout funds to stay in business, merchant cash advance companies continue to make sunshine in the form of company cash advances so businesses can make hay … or sales or needed infrastructure upgrades or inventory increases.

While banks suffer from the repercussions of making loans to the wrong people, merchant cash advance companies continue to follow their business plan of providing cash advances to small and mid-sized businesses based on average monthly credit card sales. Without needing inexperienced financial meddling from Washington to make the situation “better”.

At a time in America’s economic history when credit is hard to obtain, even by solid business ventures that formerly had no problem accessing loans and lines of credit, merchant cash advances are providing the pressure relief valve on the capital markets. In an up or down economy, business goes on – just the pace of business adjusts to the opportunities and setbacks. Sometimes the “invisible hand” of the marketplace seems to be pushing and sometimes holding a business back.

US Business Finance Corp works with business owners to provide a capital infusion in a timely manner, only secured by promise of repayment from future MasterCard and Visa credit card sales. The amount of the business cash advance is derived from the average sales of the last several months. Differing from loans, the merchant cash advance company takes on the risk of the advance – the owner does not provide any personal or business assets or equity as collateral for this form of alternative business funding.

Merchant cash advances work as a pressure relief valve in several ways:
– the business gets a fast cash infusion to meet financial emergencies, inventory outlays or due invoices,

the business owner does not take on additional risk to obtain the alternative funding,
no fixed payments are due,
no late penalties are ever charged, and
no collection calls are ever placed.

Since the merchant cash advance is repaid with a small percent of the MasterCard and Visa credit card sales over the next six to nine months, there is no fixed payment schedule or amount. With no fixed payment schedule, the business owner can not be late making repayments – hence no late charges or collection calls!

If you are looking to improve you businesses cash flow and connect your business with a secure, trusted and readily available alternative business funding avenue, contact the small business pros at US Business Finance Corp. We explain the benefits your company receives and how easily it is to apply – and to repay. Don’t wait for the banks to fix their problems when your problems need fixing today!

Alternative Financing Relieves Small Businesses Facing Tight Credit Markets

Posted on December 22nd, 2008 by Author

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!

Auto Repair Shop Merchant Cash Advances Beat Most Business Loans

Posted on December 15th, 2008 by Author

Auto repair shops needing for more operating capital are finding merchant cash advances a quicker and more accessible alternative business financing than bank loans. Auto repair business expansion may include upgrading repair equipment whose price tag means leasing or financing. US Business Finance Corp’s merchant cash advance funding is a proven source for immediate cash to meet repair shop financial needs. Merchant cash advances are a cost-effective option to leasing that both secures your operating capital for your shop while keeping your new equipment free from liens or security interests. Also, no personal guarantee is needed from the repair shop owner – US Business Finance takes on the risk of the advance!

Commercial equipment leasing financial institutions secure your lease with the purchased repair equipment used as collateral. With our merchant cash advance, you use a portion of your future Visa and MasterCard sales to obtain the purchasing funds upfront – no collateral, no personal guarantee, no major changes to your Balance Sheet. Often auto repair shops find the new equipment allows the work flow to go faster, creating more sales that pay off the cash advance well within the usual 6 to 9 month repayment period.

Since your equipment is purchased with a cash advance and not a lease or a loan, there never is a late fee, late payment, fixed payment schedule or interruptive phone calls looking for payment. Since a US Business Finance Corp merchant cash advance is not repaid from your auto repair shop’s cash flow from insurance companies, clients’ cash payments or payments from American Express or Discover credit cards (these payments go 100% to your meet your cash needs) only a percentage of a portion of your income is used to repay the cash advance.

The speed with which US Business Finance Corp responds to your merchant cash advance application means your repair shop can proceed quickly to get new repair equipment, advertising or pay upcoming bills, like quarterly IRS payments, on time. Our rapid approval and cash advance process usually takes less than ten business days. Once your merchant cash advance is approved, the money is transferred directly to your auto repair shop’s bank account.

Contact the merchant cash advance experts at US Business Finance Corp and see how our alternative business financing can assist you in meeting your company’s working capital needs better than traditional loans and commercial equipment leasing options.

American Express Closes Business Lines of Credit

Posted on December 11th, 2008 by Author

With many businesses surprised by American Express closing it business line of credit as part of its positioning for federal bail-out, many retail store owners are quickly turning to the alternative business funding option of merchant cash advances. US Business Finance Corp extends business cash advances to merchants who accept Visa and MasterCard charges on sales. These business cash advances are paid back over a few months from a fixed percent of future credit card sales.

With the Thanksgiving to New Years consumer spending season starting, the need to keep operating capital flush has many merchants feeling the pinch of a reduced or closed business line of credit. With time of the essence, the short qualification period of business cash advances appeals to many businesses who do not have the time available to go through the laborious traditional bank financing route.

With a merchant cash advance’s no need for collateral, this alternative financing route does not add additional liabilities to a company’s Balance Sheet in the fourth quarter. The lack of collateral is due to US Business Finance Corp taking on the lion’s share of the risk, a risk banks and traditional lending institutions do not accept.

Is this blind faith? Not really, US Business Finance Corp has the experience of working with owners and we know how hard they work to make their businesses a success. Traditional financing, in some ways, appears to be geared to businesses whose level and history of success leaves them in no need of financing. Typical businesses that are new or growing have a harder time meeting the criteria for bank loans.

With business cash advances, owners can use their future sales, based on their past track record as a way to raise capital. US Business Finance Corp’s company cash advance does not tie up your future sales as factoring does, but simply takes a certain percentage of the sale until the cash advance is repaid. Typically this period is from six to nine months.

If your line of credit has been closed or reduced, turn to the financing experts at US Business Finance to see how our merchant cash advances can turn your future sales into current capital.

Alternative Financing Grows With Bank’s Credit Crunch

Posted on December 3rd, 2008 by Author

Alternative financing, such as merchant cash advances, are growing in popularity with businesses due to their accessibility and speed to funding. As the FDIC reports at second highest number of “problem banks” since 1995’s high of 195 banks.

For most of the 171 troubled banks (2% of FDIC-regulated banks), the problems started, not from lending to the commercial sector, but from the high level of questionable subprime home loans. However, businesses and the entire nation’s economy feel the repercussions of the banking crisis.”We’ve had profound problems in our financial markets that are taking a rising toll on the real economy,” said Sheila Bair, FDIC chairman.

Merchants who formerly could depend on a line of credit from their bank or access to business loans have felt the squeeze of tougher loan criteria and lowered levels of available lines of credit. Other businesses have felt the entire disappearance of their line of credit.

With a merchant cash advance, alternative business financing companies, such as US Business Finance Corp, help businesses improve their operating capital picture by tapping future MasterCard and Visa credit card purchases. By “preselling” their sales, merchants access most of the cash of the future sales with the cash advance funding. As the future sales manifest, a small percentage of the sale goes to repay the merchant cash advance.

As banks regroup and attempt to assess what their risk on their current loan portfolio, alternative lenders continue to take on the risk of the business cash advance and not burden businesses with the need to pledge assets against the business cash advance. In times of tight and sometimes sporadic cash flow, business owners do not need to worry about being late on the cash advance repayment or any late fees.

US Business Finance Corp experts have treated their phones as business hotlines lately answering questions and helping applicants as more businesses find the relief business cash advances afford.

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