Financing For High Risk Businesses: Small Business Loan Alternative

The Small Business Administration announced last week that it will begin disbursing emergency loans to certain small businesses. Under the program, the SBA will make only 10,000 such loans, leaving many small business owners to look for other sources of financing for high risk businesses.

As part of the American Recovery Capital program, businesses that meet certain criteria can receive up to $35,000 in SBA loans designed to help struggling businesses pay debts, leases and notes. To qualify, a business must have experienced a 20% drop in sales, revenue or working capital, been in business for at least two years and employ no more than 500 persons companywide.

Through SBA-approved lenders, the Small Business Administration will administer the program. Lenders may not charge fees on ARC loans and the SBA pays the interest on the loan. The interest rate for these loans is set at the prime lending rate plus 2%, and is fully guaranteed by the SBA. Borrowers are not required to make any payments on the loan for 12 months following receipt of the cash, but the loan must be repaid within five years, once payments begin.

According to SBA estimates, as many as 30 million small businesses in the US may qualify for the loan program, but the limited amount of available cash means that ARC loans will be unlikely to provide a significant boost to most struggling small businesses.

For business owners who are looking for a viable small business loan alternative, Rapid Capital Funding offers a business cash advance program that can put cash in your account within hours of receiving your application.

With a business cash advance, you can pay bills, expand your business, remodel your business space, purchase or lease new equipment, make needed repairs or do whatever else you like. There are no restrictions on how you spend your merchant cash advance. There are also no long application forms to fill out, excessive documentation to provide, personal guarantees to make, or minimum monthly payments to worry about.

About ninety-five percent of businesses that accept Visa or MasterCard and have monthly sales volumes of $2,500 or more qualify for a business cash advance. Businesses with bad credit qualify, too. Contact Rapid Capital Funding today for more information on how a business cash advance can put money in your pocket.

Photo Credit: Colin Peterson, via Flickr

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