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How Long Can You Afford To Wait For A Small Business Loan?
Form small businesses today, the need for cash is acute. Getting cash, however, is not as easy as it once was. This inability to get cash can be deadly for a small business; that’s why so many businesses are turning to a
merchant cash advance.
Merchant cash advances are easier to get than small business loans. There are few forms to fill out, and no long waiting periods. Credit history is a major determinant in the small business loan process, but merchant cash advances work much differently.
If your business accepts Visa or MasterCard, is registered in the US and generates at least $2,500 in credit and debit receipts each month, you’re more than likely eligible for a merchant cash advance. About ninety-five percent of business owners who apply for a merchant cash advance are approved. That means you can get the money your business needs in a matter of days, not the weeks or months it would take to get your loan approved through a bank.
There’s no collateral to put up, no guarantees to make. Just cash. Fast.
Rapid Capital Funding specializes in getting businesses the cash they need fast. Advances of as much as 1.5 times the amount of your monthly credit and debit receipts are available, as are special financing programs for high-transaction volume businesses like restaurants and retail outlets.
Your advance is repaid as future credit card transactions come in. The more transactions you register, the faster your advance is repaid. When your business slows down, your advance repayment does, too. That’s why so many business owners like merchant cash advances. Their flexible repayment fits in with your monthly sales cycles.
Contact Rapid Capital Funding for more information about merchant cash advances and what they can do for your business.
Photo Credit: Pedro Simão
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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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States Aren't Always Friendly To Their Small Businesses
Some states are more friendly to
small business than others, but US News and World Report has put together a list of the seven worst states in which to start a business, and they’re not likely to be the state’s you may be thinking of. According to USNWR, these seven states could be accused of providing the least helpful or most obstructive business climates for entrepreneurs who want to start a new business.
West Virginia, Iowa, Arkansas, Maine, Hawaii, Kentucky and Montana missed the mark when it comes to supporting new businesses in their states. In many cases, education, infrastructure, taxation, research and development capabilities, access to national and international markets, information technology support and the availability of investment capital make these states among the least desirable places to start and maintain businesses.
For small business owners, some of these considerations are less important than others, but a basic consideration for most small business owners is the availability of capital. Banks and other private lenders around the country have restricted lending, making it difficult for entrepreneurs to start or expand a business.
Rapid Capital Funding can help small businesses get the capital they need. For businesses that accept Visa and MasterCard, virtually instant financing is available through a merchant cash advance. A merchant cash advance is not a loan, but an advance on your business’ future credit card sales.
As the credit card transactions come in, your advance is repaid, so there are no bills to pay. Most merchants who apply for a merchant cash advance are approved without major delays, credit checks, or other requests that a bank or private lender would make. There is no collateral on a merchant cash advance. Best of all, the advance can be in your account in seven business days or less.
Don’t wait around for a bank to approve or deny your loan application, and don’t put off expanding your business. Get the cash you need from Rapid Capital Funding today.
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Small Business Could Lose 2M Jobs By 2010
The impact of the recession could cost America’s small businesses as many as two million jobs by 2010, according to analysis conducted by Joel Prakken, chairman of Macroeconomic Advisors. January’s employment figures showed a 12th straight monthly decline in
small business employment. Overall in January, small businesses shed 175,000 of the 600,000 jobs lost in that month.
Since February 2008, small businesses have cut about one million jobs, and Prakken believes the number could double throughout 2009. Prakken predicts a tough road ahead, even after the stimulus plan is enacted. In the end, he expects small business hiring to recover first, but doesn’t see that happening much before the second half of 2009 at the earliest.
According to Prakken, the current decline outpaces the longest recent small-business decline, which lasted for ten months between August 2001 and May 2002, and resulted in a net loss of more than 380,000 jobs.
For small businesses that are trying to weather the rough economy, access to capital can be one of the biggest challenges. Banks have tightened lending restrictions, cut lines of credit and are even refusing to write small business loans that are backed by the US government. Without having access to capital, small businesses can’t expand, withstand delays in getting receivables paid by customers or handle unexpected expenses.
Rapid Capital Funding can help. With a merchant cash advance from Rapid Capital Funding, small businesses can take advantage of future sales to fund current operations. Merchant cash advances aren’t like loans – there’s no monthly payment to make. The advance is tied to future credit card sales, and is paid back each time a new credit card transaction is processed. Rapid Capital Funding can supply up to 1.5 times your business’ normal monthly credit card receipts in the form of a cash advance.
About 95 percent of merchants that apply for a business cash advance are approved, and even those with less-than-perfect credit can still qualify for an advance. If your business is registered in the US, accepts Visa or MasterCard and has at least $2,500 in credit card sales each month, you can get a merchant cash advance. Contact Rapid Capital Funding today!
Source: Los Angeles Times
Photo Credit: Abdulhamid Fadhly
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Layoffs Only Tell Part Of The Small Business Employment Story
Last month’s labor figures are out and they don’t look good. According to the Labor Department, 600,000 Americans lost their jobs in the month of January 2009. The figures include massive layoffs announced by large companies like Sprint-Nextel, Home Depot, Pfizer, and previously unscathed technology sector giants like Google, Microsoft and Intel. These numbers seem large, but
small business is also feeling the pinch.
The unemployment figures, which now put the national unemployment rate at 7.5%, only tell half of the story. The Labor Department also tracks the number of new jobs created. As the monthly numbers of jobs lost now reaches into levels not seen since the mid-1970’s, the number of new jobs being created is plunging at a rate even faster than that of the mounting job losses. Not only are large numbers of jobs being lost, but new jobs aren’t being created, ensuring that long-term unemployment is here to stay.
The impact is being felt in the small business sector. The number of small business loans is down sharply in the first quarter of fiscal year 2009. The number of franchises – a typical favorite of new entrepreneurs – is in a downward spiral. Small manufacturers are having trouble hanging on, in large part because lending volumes are down and small businesses have no ready access to cash.
Small businesses are now turning to private funding sources like Rapid Capital Funding for cash. Rapid Capital Funding offers merchant cash advances to businesses of any size. A business cash advance is not a loan. It is unsecured credit that is issued based upon a merchant’s monthly credit card sales volumes. A business cash advance provides a quick way to receive the money for credit card sales when you need it.
There is no monthly loan payment to make. Repayment of the cash advance occurs automatically as credit card transactions are processed. There are no restrictions on how the money can be used. You can use it to make payroll, buy new equipment, pay bills or increase your cash cushion. And unlike a bank loan, ninety-five percent of applicants are approved, regardless of their credit.
If you need cash for your US-based business, and have more than $2,500 per month in Visa and MasterCard sales, Rapid Capital Funding can help.
Photo Credit: Daniel Lobo, via Flickr
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Small Businesses May Get Closed Out Of Stimulus Financing
If the Obama administration was looking for a friend to small business, they won’t find one in New Hampshire Senator Judd Gregg. Gregg has consistently voted with Big Business and doesn’t believe that government has a role in helping small businesses. This puts into question the Obama administration’s apparent policy support for small business financing in the stimulus package now being considered in the Senate.
On the surface, the bill appears to provide for some small business financing, however analysts are disappointed with the package’s overall approach to supporting small businesses. Less than one billion dollars is devoted to the Small Business Administration for increased ending, along with changes that permit the SBA to buy up guaranteed loans in the secondary lending market.
While many analysts agree that the stalled secondary loan market is responsible for the sharp decline in small business lending, and they agree that direct lending is a good approach to increase the availability of cash for small business owners, the overall role that small business plays in the stimulus plan is small. Given that about 70% of new jobs created in the US come from small business, some analysts and observers feel that too much assistance is being offered to big business and to financiers, when the real economic power is concentrated in the heavily fragmented small business sector.
There’s no doubt about it, however. Small businesses are suffering from a lack of access to capital. Banks have funds to lend and loan guarantees by the federal government, but they’re unwilling to lend because they cannot tolerate even the small risk that a Small Business Administration loan currently poses. Small business owners are caught in the middle.
For some, a solution may come in the form of a merchant cash advance. Merchant cash advances aren’t bank loans that are repaid over long periods of time. Instead, a merchant cash advance is an advance on a business’ future credit card sales. As the credit card transactions come in, the cash advance is repaid, along with a small percentage. Merchants whose businesses are registered in the US, accept Visa and MasterCard and take in more than $2,500 in monthly credit card receipts are eligible to apply. No collateral is required and even merchants whose credit is not good are able to take advantage of a merchant cash advance.
Don’t wait until your back is against the wall. If you need cash to make your business run, contact Rapid Capital Funding today.
Photo Credit: Gaetan Lee
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Small Business Financing Drying Up
is shrinking, and the numbers are concerning analysts and policy-makers, who understand the importance of small businesses for the US economy. Since 2005, the dollar volume of 7a SBA loans has dropped about 17%. In the first quarter of 2009, (which began October 1, 2008) the loan volumes dropped an astounding 56% over the same period in FY 2008.
Demand for small business loans has dried up. This indicates an unwillingness of new investors to take over an existing small business, or an unwillingness to start a new small business. Compounding the problem, more than 300 participating lenders in the SBA 7a loan program have pulled out of the program altogether. This means that business owners and prospective entrepreneurs who want to capitalize their businesses have extremely limited access to low-interest funding.
One curious note: SBA loan volumes normally rise in recessionary times, as new entrepreneurs strike out on their own - often following a personal job loss. In this recession, that hasn’t happened and isn’t likely to without intervention on the part of the government, according to some experts. In this economy, the secondary credit markets have been crippled, meaning that funders can’t sell loans they’ve made to other lenders and loan servicers. The inability to sell loans in the secondary market means that there is no way for the original lenders to recapitalize for a new round of lending.
The impact of this is visible. In recessions, franchising is an attractive way for new entrepreneurs to start businesses. The number of new franchises grows in a recession as individuals who were formerly employed by another business seek out new opportunities. Franchising is a great way to enter the business world without having to work out the organizational details of owning and operating a new business. It’s also a great way for the parent company to expand.
The impact of the credit crunch is also being felt by existing small businesses that are attempting to ride out the recovery. Without having ready access to short-term cash, small businesses are having difficulty making their monthly payrolls, paying bills and staying solvent. In many cases, the financial problems are not so much a matter of declining sales, but rather a cash flow issue. Customers may take longer to pay their bills, or may skip paying bills for a month or two. These strategies have a ripple effect and impact businesses who don’t have an adequate cash cushion.
A business cash advance can be used to help small businesses weather the recession. Business cash advances work somewhat like an advance on a credit card. There are no restrictions on how the cash can be used, and the advance is repaid as new credit card transactions are made. That eliminates the monthly bills and long-term notes associated with traditional loans. Business cash advances are also much more readily available; 95% of businesses that apply for a business cash advance are approved, and the money is usually available within 7 business days.
If your business is registered to operate in the US, accepts Visa or MasterCard and generates credit card receipts of as little as $2,500 per month, you may be eligible for as much as $250,000 in immediate funding. If you’re looking for small business funding and traditional lenders can’t (or won’t) help, contact Rapid Capital Funding today for more information on a business cash advance.
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Thinking About Financing A New Business?
is a tough call to make, regardless of what the economy is doing. In a down market, however, the stakes are even higher. A poor economy reduces your options when it comes to getting your business off the ground and keeping it there. Some would-be entrepreneurs put off starting a small business altogether.
The number one challenge facing would-be entrepreneurs is small business financing. If you don’t have investors, and your personal savings isn’t large enough to front the cost of startup and to cover your own expenses while you build your business income, starting a business may not be in the cards.
There are several options for financing, but loans can be difficult to get if your credit is not pristine and your business plan has some holes in it. The Small Business Administration will back loans for both capital equipment and other startup costs. The loans are administered through private lenders and you’ll need to meet the lending standards in place at the time you apply.
Legislation under consideration in Congress right now would enable the Small Business Administration to lend directly to borrowers if no private lender will accept the loan application. In addition, the legislation would permit the SBA to increase the amount of its guarantee from 85% to 95%. Even with these incentives, private lenders who are risk-averse are unlikely to part with the capital an applicant may ask for.
You may also attempt to secure a personal loan from the bank or another private lending source. If you’re applying to a private lender, this route will be difficult to manage if your credit isn’t perfect. Personal lending volumes have dropped significantly, since many consumers aren’t interested in taking on more personal debt and few lenders are interested in writing new loans.
For some new companies, a business cash advance is a likely option. Like a credit card cash advance, a business cash advance is relatively easy to get. Business cash advances are usually based on the credit card sales of a business. Unlike a loan, there are few papers to file, and most businesses that request a business cash advance are approved.
To apply for a business cash advance, the business must be located in the United States, must accept Visa or MasterCard and must have credit card transaction volumes of at least $2,500 per month. Using a business cash advance, the lender provides payment up-front for future credit card transactions. As the transactions are made, the lender is repaid. Repayment includes a small percentage of the borrower’s daily credit card receipts.
The business cash advance is an unsecured loan. There is no collateral to put up, and the business simply conducts itself as it would under ordinary circumstances. Repayment occurs as the credit card transactions are processed, so there’s no monthly loan payment to make. Businesses can receive advances of up to 1.5 times their monthly credit card sales volumes, so you can get the emergency cash you need when you need it. There are no restrictions on what the cash advances can be used for, and advances can usually be arranged in a week or less.
If you would like more information about how a business cash advance can work in your favor, contact Rapid Capital Funding today.
Photo Credit: Dani Simmonds
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Small Business Financing For The Self-Employed
There’s no doubt that small business plays a big role in the US economy. According to figures from the US Small Business Administration, small businesses (those with 500 or fewer employees) are responsible for creating between 60 and 80 percent of the nation’s net new jobs. These figures don’t include what the government refers to as “non-employer firms” - those that provide for just one person. Small business financing can be a major problem, especially for the self-employed.
There are an estimated 21 million self-employed persons in the US right now. That’s significant because the data suggest that the self-employment picture has remained relatively stable, even in these weak economic times. Although some analysts expect to see a slight decline in the number of non-employer firms in 2009, self-employment remains a viable option, even in the toughest recessionary period the US has seen in years.
One of the biggest challenges faced by the self-employed is a lack of capital. The self-employed typically self-finance, too. Banks are often unwilling to take a chance on someone who is self-employed - even when the loans they’re seeking are backed by the federal government - because banks are highly risk-averse right now.
One type of self-employment appeals to many would-be entrepreneurs: franchises. The franchise is very attractive to people who are looking to set up their own business, yet need or want the support of one that is already established. Franchising represents a huge self-employment opportunity, provided that the prospective franchisee has the capital needed to get the business off the ground.
Buying a franchise can mean buying an established franchise from another person, or it can mean self-starting a new franchise. Start-up costs range from nearly nothing, to well over a million dollars, depending upon the kind of franchise under consideration. The bottom line is that many prospective franchisees need access to cash.That’s a tough sell to a bank when the applicant has no other viable source of income.
Fortunately, there are lending options that don’t rely on standard lending guidelines. Business cash advances, for example, can provide the cash a small business needs with few of the restrictions that banks would impose. For US-based businesses that accept Visa or MasterCard and have more than $2,500 in credit card sales each month, access to cash can be very easy, using a business cash advance.
A business cash advance can provide access to as much as $250,000 with no restrictions on how the money is spent. Use it to pay bills, buy equipment, make improvements, fund an expansion or whatever else needs to be done. The advance is based on future sales and 95% of applicants are approved.
In a down economy, the self-employed can’t afford to wait for things to get better! Get cash today with a business cash advance.
Photo Credit: Alexander Korabelnikov
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In January of this past year (2008), there was a report at Research Central and CIO Insight online stating that 186 different financial institutions (credit unions included) had been victimized by online fraud. Additionally, attacks on online credit unions had accounted for 45% of all monthly activity during 2007. Conversely, attacks against national banks had decreased by nearly 44% during the same time frame. Speculation has arisen that with a weakened economy that the credit unions are now easy targets for hackers and scam artists.
The above reports appeared to be just the tip of the iceberg for the problems that the nation’s credit unions have been experiencing throughout 2008, or possibly a harbinger of worse issues to come. It became obvious that the financial sector in the US was infected by the evidences of numerous credit losses and write-downs. Back in August, a report was released by the Wall Street Journal that five of the biggest credit unions in the US have lost considerably on mortgage-backed securities in the residential real estate sector. Entire equity bases were literally wiped out in the process.
This indicates that this housing market distress has been spreading even into the financial sectors were there is less risk involved. Gerald Hanweck, who is a finance professor at George Mason University and is a visiting scholar at the FDIC, has studied the banking industry for quite some time now and feels that the situation has been growing more serious throughout 2008.
In addition to the above, the federal regulator who oversees the US credit unions claims that the losses will most likely reverse themselves once the mortgage markets become more stable, and once these institutions become more adequately capitalized. However, there are some outside observers who are very concerned that these credit unions have underestimated how deeply the problem is running within the mortgage industry.
According to Hanweck, this is a very serious situation and it isn’t getting any better. Hanweck believes that the five credit unions have sufficient funding available to handle a deeper downturn in the situation, but he continually worries that added risk could lead to a more serious run on funds with one or all of them. Since 1990, the total assets of US credit unions have been consistently increasing from just over $200 billion to just under $800 billion as of the end of the second quarter of 2008.
Credit unions are member-owned, not-for-profit cooperatives (organizations) that lend money and take deposits like regular banks. The credit unions have become key players in the mortgage industry, and their problems are focused on the so-called “corporate” credit unions. Unlike the standard credit unions, the corporate entities do not deal directly with the consumer. However, they do provide financing and investment services to the regular credit unions who do deal directly with consumers.
According to several federal regulatory filings, the five corporate credit unions that are showing the largest mortgage-related losses are:
Constitution Corporate Federal Credit Union
Members United Corporate Federal Credit Union
Southwest Corporate Federal Credit Union
U.S. Central Federal Credit Union
Western Corporate Federal Credit Union
As of the end of May, 2008 they had reported nearly $5.7 billion in “unrealized” losses which occur when the current market value of any security drops, whether it has been sold or not.
The fact that these credit unions are experiencing grave financial strain, even though they are the most conservatively operated institutions in the financial sector, indicates that no financial sector is immune from this mortgage meltdown malady. It has also caused far-reaching damage throughout the commercial bank sector and the Wall Street financial services. Mark-downs of over $300 billion in connection with the mortgage industry dilemma have already taken place as well.
As a result of regular credit unions being too small to engage in more sophisticated investing, the corporate credit union came into being for the purpose of serving these smaller entities. A portion of the assets/funds of these regular credit unions gets placed with one of the corporate ones who in turn will invest the money. Assets of the 28 corporate credit unions (which are owned by the member credit unions) total roughly $90 billion. US Central provides the member credit unions with investment services in addition to being a service provider for the corporate ones.
Credit unions, like banks, are insured by the Federal Government for up to $100,000 per account and up to $250,000 for retirement type accounts. Seven of these regular credit unions failed in 2007, and as of August (2008), nine have failed so far. Since these regular credit unions have funds deposited with the corporate ones, a financial failure at that level would equate to losses for the regular credit unions involved, as well as losses for the depositors/members of them. Additionally, it has been 13 years since a corporate credit union has failed, but eventually, the regular credit unions involved with them did recover their funds.
From a historical standpoint, 25 years ago in 1983, Congress passed legislation to increase the United States’ contribution amount to the International Monetary Fund. There was also a conference of 13,000 government financial officials and international bankers that was held in Washington, D.C. during Reagan’s Presidency. It was the joint annual meeting of the IMF and World Bank wherein they addressed problems with the US dollar and interest rates. Of equal importance, these issues shared the stage with concerns over the deadlock of IMF funds.
As of early December, 2008 a two-tiered plan to help those institutions battered by investments in the lending and mortgage sectors has been introduced by the federal agency that oversees the operations of US credit unions. As of this coming January, 2009 the NCUA (National Credit Union Administration) will be awarded a $41.5 billion “shot in the arm” that was approved by Congress in September (2008) to stimulate some liquidity for corporate credit unions that are experiencing continually mounting losses on securities tied to mortgages and other types of home lending.
Additionally, this plan also provides another $2 billion for retail credit unions so they can cut their interest rates on mortgages that are currently held by homeowners who are struggling to make their payments on time. In addition to this, the funding has been structured in the form of repayable loans. No matter what the future holds, or what happens with the long-term viability of these troubled corporate credit unions, the NCUA is counting on the retail credit unions having a serious interest in (and committed to) preserving the entire credit union sector through these difficult financial times.
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