CIT Bankruptcy Could Seriously Disrupt Retail Business Financing

Retail business financing has been rocked in the past two weeks, with news that major retail financer CIT is working to avoid bankruptcy. A bankruptcy at CIT would disrupt funding for retailers and small businesses just as these organizations are getting ready to go into the holiday shopping season. CIT is one of the nation’s largest factoring services. Factoring allows vendors to their accounts receivable for cash up front, guaranteeing that the vendor will get paid for its goods. CIT figures prominently into the vendor’s ability to get goods into stores in a timely way.

Who would be hurt by a CIT bankruptcy? Just about everyone, from giants like Walmart and Target to small retailers and restaurants. Even for vendors that don’t use CIT’s services, a bankruptcy would have a chilling effect as vendors may demand up-front payments for goods shipped to retailers, restaurants and other small businesses.

A business loan alternative known as a merchant cash advance puts the power of factoring directly to work for retailers. With a merchant cash advance, a business owner can sell a portion of his future credit card transactions to a factor, like Rapid Capital Funding. The cash can be used for anything – including paying for inventory. The business loan alternative is repaid as the sales come in. A portion of each transaction is used to repay the merchant cash advance, and the rest is returned to the retailer.

Should the unthinkable happen – a bankruptcy at CIT – merchants who seek out a merchant cash advance will still have the ability to pay for their holiday inventory. A merchant cash advance can be arranged in a matter of hours, and doesn’t rely on the credit rating of the retailer. Good credit, bad credit or no credit, your store shelves will still be full during the holiday season, thanks to a merchant cash advance business loan alternative from Rapid Capital Funding.

Photo Credit: Jason Kuffer, via Flickr

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SBA Loans May Not Give Your Business Cash

A lot is being made lately of President Obama’s plan to help small business. Buried in the American Recovery and Reinvestment Act of2009 is $15 billion earmarked for the repurchase of Small Business Administration loans. The move is designed to free up new cash for lending to other small businesses, but the effect of the changes is anything but clear.

The move is an effort to jump-start the frozen secondary credit markets, but many analysts caution that it will take a lot more than a few billion dollars to get banks to make new loans. Experts caution that the small business provisions of the bailout will help a limited few businesses. Most small businesses will not be eligible for assistance, nor will many small businesses want to take on loans to get through difficult times.

More in line with what small businesses need is the new aid recently promised by the Obama administration to the automotive suppliers. Some suppliers will be able to tap into TARP cash in order to weather the storm. These suppliers will be guaranteed enough cash to make their payrolls, and industry analysts say the plan had better work. An estimated 600,000 jobs hang in the balance, and a significant drop in the number of suppliers or the availability of auto parts could spell disaster for not only the Big 3 but any automaker who builds cars today.

Cash is what small business owners need most right now but banks aren’t lending, even with increased SBA loan guarantees by the federal government. If your business needs cash, and accepts Visa or MasterCard, you may be eligible for a merchant cash advance. Unlike a regular credit card cash advance, a merchant cash advance uses the power of your future credit card transactions to deliver the cash you need for your business today. As your transactions come in, a small portion of the revenue is diverted to repay your cash advance.

A merchant cash advance is flexible, too. You can receive as much as 1.5 times your average monthly credit and debit receipts, and because repayment is based on your transaction volume, your repayment rate remains in step with your business cycles. When your transactions increase, so does your repayment rate. When transactions slow, your rate of repayment slows, too.

A merchant cash advance doesn’t depend on your good (or bad) credit, so no matter what your credit looks like, you can still benefit from a merchant cash advance. Contact Rapid Capital Funding today to see what we can do for you.

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BA Loans Decline Despite Bank Bailouts

The Obama administration reported yesterday that Small Business Administration loans issued by banks that received bailout funds declined sharply in January, despite the added government support. In part, the administration cited the declining economy as a primary cause for the falloff in loan demand.

The bailout funds were designed to restart the credit markets, however, the money has not yet had the intended effect. Lawmakers have said that they are receiving a growing number of complaints from constituents who cannot get business loans to maintain their operations. Banks are also withdrawing and reducing existing credit lines for businesses, even when the borrowers are current on their obligations, further exacerbating the problem.

The Obama administration will now require monthly reports from the 21 banks that received federal bailout funds to permit better oversight on how the funds are being used. In addition, the Small Business Administration will now purchase up to $15 billion in loans made by smaller banks. The administration will tap TARP funds to make those purchases. The SBA purchases will give the banks the capital they need to make additional SBA loans.

If you’ve experienced difficulty in getting small business loans, Rapid Capital Funding can help. If your US-based business accepts Visa or MasterCard, and generates receipts of $2,500 per month or more in credit and debit transactions, you likely qualify for a merchant cash advance.

A merchant cash advance allows you to tap the power of your future credit card transactions to get the cash you need today. There’s no long application to fill out and no waiting. You can also get as much as 1.5 times the amount of your average monthly receipts. Good credit or bad, it doesn’t matter. A cash advance isn’t based on your creditworthiness, and you don’t have to explain why you need the money.

Contact Rapid Capital Funding today for more information on how a merchant cash advance can help your business thrive in today’s challenging economy.

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Merchant Cash Advance Could Cure Stimulus Cash Flow Problems

If you think a merchant cash advance isn’t for you, hold that thought. The long-awaited stimulus plan has been presented and passed by Congress. The American Recovery and Reinvestment Act of 2009 may hold some nasty cash flow surprises for small businesses however. The package sets aside nearly $25 billion to subsidize health care premiums for recently discharged workers. The new law calls for a 65% subsidy in COBRA payments, but the actual cash comes from the employers themselves.

Under the new law, employers can deduct the 65% premium from their federal payroll tax deposits, but the up-front cash comes from the employers themselves. If you’ve recently laid off employees, or plan to do so in the near future, and those employees have health care benefits, you could be fronting the COBRA subsidy for your employees. Further, if the COBRA subsidy exceeds your payroll deposit, you’ll need to request reimbursement from the Treasury Department. You guessed it: the reimbursement policy is not yet in place.

Health care premiums are expensive, and COBRA payments for separated employees could cost your business thousands of dollars each month. If you experience a sudden cash flow problem, how will you pay your monthly COBRA payments?

A merchant cash advance can give you the cash you need to cover COBRA payments, payroll taxes or unexpected expenses related to your business. And a merchant cash advance is fast, too. Rapid Capital Funding can arrange a merchant cash advance in a matter of days. With a bank you could wait weeks or months for loan funds.

In a recession, the difference between survival and failure is cash. If your business doesn’t have the cash it needs, contact Rapid Capital Funding today and let us show you how we can help.

Photo Credit: Wojciech Wolak

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Geithner Says Small Business Loans On The Way

Treasury Secretary Timothy Geithner says that the Treasury will have a plan together, perhaps as early as next week, to support new small business loans. He did not provide any details, but says that small business loans are one part of an overall financial stability plan, parts of which he introduced on February 10.

Geithner says that the Federal Reserve has committed up to one trillion dollars in lending plans designed to support small businesses. Two issues the plan is expected to address are banks’ continued unwillingness to lend money, and their inability to sell loans on the secondary credit markets. The small business plan is also expected to help promote student loans, car loans and commercial mortgages.

Geithner’s plan is also expected to increase government guarantees on Small Business Administration loans. SBA loan volumes have dropped off sharply in the past year, as banks become more risk-averse. SBA loans had been guaranteed at 85%, and new plans will push that guarantee to 95%.

Geithner’s plans may run afoul of a growing number of legislators in Congress who are upset by the amount of regulatory oversight given to the bailout funds to date. Geithner reiterated his position that the economy will get worse before it gets better, and that he does not see a rebound until late 2009 or early 2010.

The ability to get cash is critical for small businesses, and banks just aren’t making small business loans right now. Applicants can wait weeks or months before being turned down, or being offered loans with very high interest rates.

If you need cash for your business, consider a merchant cash advance from Rapid Capital Funding instead of a bank loan. Our process for getting cash into your hands is streamlined. In many cases, we can process your application and put cash in your account in less than 72 hours. For certain businesses that have high credit card transaction volumes, special financing plans are available. And no, you don’t need perfect credit to get a merchant cash advance.

If your business is based in the US, accepts Visa or MasterCard and generates credit and debit receipts of at least $2,500 per month, you more than likely qualify for a merchant cash advance. Ninety-five percent of our applicants do. Give us a call today and let us show you how we can help your business get the cash it needs fast!

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Fiorina Says That Small Businesses Will Drive Economic Recovery

For owners looking for small business capital opportunities in the freshly inked stimulus package, there’s not much of real value. According to Carly Fiorina, former CEO of Hewlett-Packard, small business – not government spending – will drive the economic recovery in the US. Fiorina was delivering the keynote address at the International Franchise Association meeting yesterday.

Fiorina expressed concern that the stimulus plan applies Depression-era corrections to a 21st century problem, and that the spending package won’t address the real needs of the sectors that will actually deliver the economic recovery.

Analysts have indicated that the stimulus plan isn’t by itself friendly to small business. While it does extend some tax credits and increase some caps for depreciation and other business expenses, it doesn’t do much to help small businesses expand, create jobs or spur sales.

Cash flow is a primary consideration of small businesses. Many franchise operations need a steady source of income to make payroll, buy supplies and pay bills. Other small businesses need ready access to credit, so that they can make purchases and start projects on short notice.

For these businesses, bank loans may be out of the question. Banks have restricted lending, even to businesses that have excellent credit and payment histories. These restrictions make it tough on small businesses to land contracts and deliver services in a sour economy.

A merchant cash advance may be the ideal solution for certain businesses. If your US-based business accepts Visa or MasterCard and registers credit sales of as little as $2,500 per month, your business could be eligible for a merchant cash advance.

For more information about a merchant cash advance, or to see if your business qualifies, don’t wait! Contact Rapid Capital Funding today!

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Small Business Tax Cuts Would Do More Than Stimulus Plan

SurePayroll, an online payroll service, released the results of a recent survey of small business owners and their impression of the Troubled Assets Relief Program (TARP). Nearly 75 percent of small business owners disagreed with the government’s approach to bailing out the banks as a way to jump-start the economy. Only three percent of respondents felt that the TARP plan would be effective.

The survey showed that small business owners aren’t that keen on a large spending plan, either. Only eleven percent though that massive government spending would improve the economy.

What do small business owners think will work? Nearly fifty percent of survey respondents say that tax cuts would be a better way to get the economy moving in a positive direction again. To date, the TARP plan has not resulted in increased lending to businesses or consumers, primarily because lenders can’t find buyers for new loans on the secondary credit market. Without loan buyers, increased lending isn’t sustainable and banks don’t want to service their loans themselves.

Despite the fact that banks are now flush with cash, they’re not lending it out to consumers or small businesses. This puts small business owners in a bad position. Small businesses have few options when it comes to getting the cash they need to continue or expand their operations.

Some business owners have discovered that a merchant cash advance is the quickest way to get cash fast. A merchant cash advance enables businesses of any size to use future credit card sales to secure cash. A business cash advance isn’t a loan. Credit card transactions repay the advance as they come in, so there’s no monthly bill to pay, and you get the money from your credit card sales up front. You can even request an advance of up to 1.5 times your average monthly credit card sales figures.

Rapid Capital Funding is a trusted leader in merchant cash advances. Don’t wait for the bailout to trickle down to your business. Get the cash you need now with a merchant cash advance from Rapid Capital Funding.

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Treasury’s Credit Fix May Do More To Help Small Business

More than anything else, small business needs customers. Treasury Secretary Timothy Geithner is proposing a $1 trillion fix that may loosen credit for small businesses and consumers alike. The proposal may double in size to $2 trillion by the time everything plays out.

The plan would free up consumer credit for auto loans, credit cards, student loans and small business loans by unsticking the secondary securities market, where such loans are packaged and sold to other investors. Asset-backed securities – as they are known – are used to finance an ongoing stream of loans to consumers. Loans are made and sold, and the proceeds from the sale are used to finance additional loans.

The collapse of the secondary loan market has played a large role in the tightening of consumer and small business credit, and has made it impossible for many good-risk consumers to get credit. Geithner’s proposal calls for $100 billion in TARP funds leverage the purchase of up to $1 trillion in new asset-backed securities. The plan is actually an expansion of one offered by former Treasury Secretary Henry Paulson last November.

Although the move is expected to help both consumers and small business owners, the Treasury has not said when (or whether) the program might take effect. If you own a small business, your need for good cash flow is constant. One way to ensure that your business has the cash it needs is by arranging a merchant cash advance through Rapid Capital Funding.

A merchant cash advance leverages your future credit card sales now to put the cash you need into your hands right away. Most merchant cash advances can be delivered in 72 hours or less. Special restaurant financing plans are available that can put as much as $250,000 into your bank account in seven days or less. Best of all, there’s no monthly loan payment to make. Your advance is repaid when you make your credit card transactions. Nothing could be simpler, and there are no restrictions on how you spend the money.

Don’t wait to see if the government’s plan will help you out. If you need cash, contact Rapid Capital Funding today!

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Don’t Wait For Stimulus Plan, Create Your Own Small Business Financing

If you own a small business and are hoping that the much-discussed economic stimulus plan will help you out, you may be disappointed. That doesn’t mean, however, that your fortunes are left up to fate. Despite the lending slow-down, and the downturn in consumer spending, your business can survive and thrive, thanks to a merchant cash advance from Rapid Capital Funding.

Your small business could be eligible for as much as $250,000 in cash in just a matter of days. In most cases, Rapid Capital Funding can put the cash you need into your hands in just 72 hours. Special programs for restaurant owners mean that you’ll always have the cash you need to pay your bills, expand, buy the supplies you need and weather the downturn.

If your business is registered in the United States, you’re current on your lease and you accept Visa or MasterCard with more than $2,500 in credit sales each month, you’re eligible for our restaurant financing program. Stop worrying about where the cash will come from. Our restaurant financing program leverages your future sales to deliver the cash you need right now. There are no restrictions on how you can spend your cash.

Call Rapid Capital Funding today or apply online for our restaurant financing program.

Photo Credit: Steve Woods\

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Big Stimulus Spending Not Much Help To Small Businesses

If small business owners were hoping for some direct assistance from the stimulus package passed yesterday by the Senate, they’re likely to be disappointed. According to the National Federation of Independent Businesses, there’s little in the bill in the way of direct assistance to small business owners and prospective entrepreneurs.

Small business is responsible for about 70 percent of the new job creation in the US, and in recent surveys, only nine percent of small business owners in the survey said that they plan to add workers to their payrolls in the second quarter of 2009. In fact, small business employment shows a net loss of about one million jobs between February 2008 and today, and some analysts expect small business to shed another one million jobs during 2009.

What the stimulus plan lacks, according to the NFIB, is features that will translate into new sales for small business. The stimulus plan does include a few changes to the tax code that will increase Section 179 deduction limits and extends bonus depreciation. Despite these moves, small businesses are reluctant to make capital improvements, which renders the increased tax incentives helpless.

Capital improvements take capital, and many businesses don’t have access to capital right now. Banks are reluctant to lend and borrowers are reluctant to borrow. There is a way to get the cash you need into your business right now. If your US-based business accepts Visa or MasterCard and generates more than $2,500 per month in credit card transactions, you may be eligible for a merchant cash advance of up to $250,000, depending upon your monthly credit card sales volume.

A merchant cash advance isn’t like a loan. It’s an advance on the cash your business would normally earn. The difference is that you get the cash right away, instead of having to wait for your credit card payments to arrive. Most merchant cash advances can be arranged in seven business days or less. They’re paid back as you take the credit card transactions in, so there’s no monthly loan payment to make and no bills to pay. You’re likely to be eligible even if you have bad credit.

If you need cash for your small business, contact Rapid Capital Funding today and let us show you how we can get you the cash you need when you need it.

Photo Credit: Steve Woods

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