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!

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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Bank CEOs Face Congressional Music On Bank Loans

If you thought that the CEOs of the major domestic automakers had it bad, hold on tight because the bank CEOs whose firms received a slice of last year’s TARP bailout will be testifying in front of the House Financial Services Committee today. Lawmakers are expected to demand an accounting of what exactly happened to the bailout funds lavished on banks last year, and an explanation for why more of the Fed’s capital isn’t being plowed into bank loans for businesses and consumers.

Congress has gotten more than an earful from ordinary people who wonder why the banks were not questioned as closely about the estimated $800 billion in TARP grants as automotive CEOs were grilled about their request for $25 billion in federal loans. Lawmakers will be looking for an accounting of how the TARP funds have been spent to date, and want answers about the excessively high bonuses that have been paid to bank executives since the TARP funds were released.

One burning question on the minds of lawmakers is how much of the funding has been offered to businesses and consumers in the form of loans. Among the nearly 400 recipients of the federal funds, only Citigroup has provided any information about how it has spent its TARP funding. Citi’s accounting shows that only about one-third of the money has been made available for loans.

Small businesses have been hit hard by the lack of capital available for operations and expansions in the last year. Nearly five percent of small businesses are now saying that loan availability is the single most important issue facing small businesses today. There is another source of funding for small businesses: a merchant cash advance.

Merchant cash advances are available to any US business that accepts Visa and MasterCard and has at least $2,500 per month in credit card transactions. Merchant cash advances have a limit of $250,000, so you can get the cash you need when you need it.

A merchant cash advance isn’t a loan. It’s a cash advance based on future sales. As your transactions are processed, your advance is repaid, with a small fee. There’s no monthly bill to pay, and 95% of all eligible merchants who request a cash advance get one. There’s no requirement that you have good credit, either.

If you’ve been the bank route and you’re still waiting for your cash, or you’ve been turned down by banks who won’t lend out their cash, don’t face the worst alone. Contact Rapid Capital Funding today!

Photo Credit: Chrisinphilly5448, via Flickr

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Small Business Index Shows Confidence Eroded In January

According to the National Federation of Independent Businesses, small business owners’ confidence in the economy and in their businesses dropped to the second-lowest level ever recorded by the NFIB in the organization’s 35-year history. The NFIB’s Small Business Optimism Index fell to 84.1, from 85.2 in December 2008.

The organization remains hopeful that signs of recovery will begin to appear in the second half of 2009, but acknowledges that any recovery is unlikely to begin through the second quarter of the year. In addition to the glum outlook for businesses, small business owners reported a significant decline in average employment in January, though capital expenditures remained steady in January, after falling five points in December. Nearly 60 percent of respondents reported a drop in profits in January.

The NFIB says that the number of deferred expenditure plans rose two points, but reports that owners aren’t making big plans to build inventories, and 20 percent fewer businesses expect to see their sales rise, an overall drop of 2 points. The outlook for expected credit conditions was largely negative, dropping fourteen percent from January. Four percent of respondents indicated that credit and financing are their single most important problems right now. Thirteen percent of respondents say that loans are harder to get now than in the past, and demand for loans is at a low.

The drop in loans could signal tough times ahead for some small businesses. Combined with tightened lending restrictions, some small businesses that would normally borrow to get through rough spots aren’t able to get the operating capital they need to stay afloat.

For some businesses, an alternative to a loan is a merchant cash advance. A merchant cash advance can put the cash you need in your hands right away, without the weeks or sometimes months of waiting that can accompany a traditional loan. Even businesses with less-than-perfect credit can qualify.

A merchant cash advance isn’t like a loan. Instead, it’s a cash advance on your future Visa and MasterCard credit transactions. Your cash advance is repaid as you take in new transactions. Nothing could be easier! Most advances are delivered in less than seven business days, and you can request an advance of up to 1.5 times your normal monthly credit card receipts. There are no restrictions on how the cash is used, and 95% of all applicants are approved for the advance.

If you need cash to keep your business moving, turn to a name you can trust: Rapid Capital Funding.

Source: NFIB
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Cash Flow Is King For Small Businesses

In a good economy, small businesses can afford to let a few customers slide when it comes to paying bills on time. In a tight economy, late payments cascade through the system, impacting not only the small business that isn’t getting paid, but also its vendors and suppliers, who may have to wait for payment. One or two late payers can turn an efficient small business into another late payer.

When regular collection methods don’t work, one potential solution for small businesses is to consider a merchant cash advance. A merchant cash advance from Rapid Capital Funding allows you to get the cash you’re owed now and repay it when the cash actually arrives.

By putting cash into your hands right now, a merchant cash advance from Rapid Capital Funding can help your business break the potentially catastrophic cycle that delayed payments from customers can set up. A merchant cash advance is ideal for businesses that accept Visa or MasterCard and have credit card sales of at least $2,500 per month. Rapid Capital Funding collects repayment as transactions come in, along with a small fee. As a business owner, you can pass that fee on to the late-paying client(s). Your business doesn’t suffer because your customers are late in paying their accounts.

A merchant cash advance isn’t a loan. There are no monthly bills to pay, which makes it a convenient way to get cash fast. Most merchant cash advances can be completed within just a few business days. Better than that, 95% of merchants who fit the basic advance criteria are approved for advances, even those with less-than-perfect credit.

When you need cash for your business, you need Rapid Capital Funding!

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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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Nothing In The Stimulus Plan For Small Business Financing?

While the final details of President Obama’s economic stimulus plan have yet to be worked out, some analysts are questioning whether there is anything of value in the plan for small business. Additional loan provisions and increased lending guarantees from the Small Business Administration are in the current package, but some fear that the plan will do little more than create additional governance without addressing the issue of small business financing.

The potentially expanded powers of the Small Business Administration allow the government to be a buyer in the secondary loan market. While that may seem to stimulate the loan business, many analysts are skeptical about plans to saddle the government with extra debts, likening the new SBA to troubled mortgage guarantors Fannie Mae and Freddie Mac.

Instead, advocates favor extending small business tax relief, a move that is currently absent from the stimulus plan. In the short term, small businesses need cash for operations and longer-term growth. As credit markets tighten, the access to cash has become a major issue for small businesses.

One approach that more business owners are taking is a business cash advance. Based on future credit card sales, a business cash advance supplies access to readily available cash immediately.

Business cash advances aren’t like loans. There is no monthly payment. Instead, businesses can use future credit card sales to fund their current activities. Repayment of the advance occurs as normal credit card transactions for the business are processed. Depending upon average monthly credit card receipts, a business can take up to $250,000 in cash advances.

A business cash advance is a short-term unsecured debt, so there’s no collateral. About 95% of applicants are approved for an advance. To apply for a business cash advance, a business must be registered to operate in the United States, accept Visa or MasterCard, and have total credit sales of $2,500 or more per month.

If you are interested in learning more about how a business cash advance can help your small business, contact Rapid Capital Funding today.

Photo Credit: Kamil Dratwa

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Thinking About Financing A New Business?

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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Business Cash Advances Can Provide Small Business Financing

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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Equipment Leasing Takes A Plunge In December

The Equipment Leasing and Finance Association reports that the December Monthly Leasing and Finance Index showed a drop of 13.3 percent in December, compared to the same period in 2007. The index tracks equipment-financing activity. The MLFI-25 index is used in conjunction with other economic reports to provide an overall picture of the health of manufacturing and production in the United States.

New business volume declined by 3.6 percent. One bright spot in the report shows that month-to-month new business volume increased 120 percent in December, compared to figures for November. The report also tracks the status of receivables over 30 days old. The index shows a drop of 3.7 percent in December over outstanding receivables in November. Credit approvals dropped to an all-time low of 71.5 percent and more than one-third of responding businesses reported fewer transactions in the month of December.

The availability of credit continues to affect businesses and their production capacity. The Small Business Administration reports that its 504-loan program, designed to help small firms purchase major assets fell 82 percent in the first quarter of 2009, compared to the same time period in 2008. 7(a) loans, designed to help small businesses start up, fell by nearly half.

Loan volumes are significantly lower, in part, because the programs are administered through private lenders. While the federal government backs 85% of each SBA loan, applicants must still meet tougher lending standards. Even with only 15% capital at risk, many banks feel that start-up companies and those that want to expand represent too much risk.

One option for small business owners is a business cash advance. These loans provide unsecured working capital for businesses and are based on a merchant’s future credit card transactions and are often easier to acquire than a small business administration loan or a loan from a private lender. To get a business cash advance, the business must be registered in the US, accept Visa or MasterCard and have credit card sales that exceed $2,500 per month. Unlike loans, the business cash advance can be used for anything, including the purchase of equipment.

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