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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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When you own a small business, saving on overhead costs is critical, and if you do not manage the costs of your operating expenses effectively and properly, it can kill your business. Of all the expenses involved that are not directly related to manufacturing your product or delivering it, expanding overhead expenses are dangerous. Here are three critical aspects that you need to be aware of concerning operating expenses or overhead:
Even in small businesses, overhead expenses have the tendency to increase, usually slowly and often times unnoticed. You may find yourself confronted with a serious situation - your overhead expenses have grown and are out of control.
Swollen overhead costs are a threat to the competitiveness of your small business as well. By the same token, lower overhead costs can become one of the best competitive weapons in your arsenal.
Creeping costs can oftentimes be insidious. Those seemingly minor costs that get added here and there start to add up. Just remember that it is very easy to add additional overhead expenses, but eliminating them can be far more difficult.
Your office space is a prime example of a major overhead expense. The big mistake that most new business owners make is that they have more space or higher quality office space than what is actually necessary. I call this one “overkill”, but the only thing that really gets killed is your cash flow and your profits. Keeping overhead expenses in check is the most ideal reason for designing and using a home office.
I consider this list of the 6 most important action steps to deal with first in order to help you save money on overhead in your small business:
1) Focus on cutting your energy costs – this is one of the major areas that drain a business’ bank account and they are continually rising. A terrific source of assistance in cutting energy costs is the government-backed program called Energy Star.
2) Control your inventory – carrying excess inventory or the wrong inventory hinders your turns on that merchandise and can ultimately cripple your operation. Inventory control software is available online and it is highly advisable that you invest in this.
3) Do you have a cost-effective insurance policy? – another critical area is business insurance. You might want to consider re-evaluating the type of coverage that you have versus what you actually need.
4) Don’t waste money by spending it on waste – sounds redundant doesn’t it? I’m referring to what it costs you monthly to have your trash removed. Try using smaller receptacles and having fewer pick-ups per month.
5) Spend less time on the phone – phone costs can be lethal. A good suggestion here is to look into converting your landline over to VoIP (an internet-based phone service provider). This is much cheaper than the standard phone service.
6) Involve your employees – believe it or not, you would be amazed at how adept your employees can be when it comes to identifying wasteful spending in your business. It is always advisable to enlist their assistance in your cost-cutting mission, just be sure that you can reward their valuable input if that is warranted.
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The us auto industry has been on its back for several years now. The situation has accelerated with the most recent credit meltdown and all three are running to capital hill seeking a bailout. It seems like under the current circumstances this request should be met with a resounding YES. If any of you paid attention last week to the latest jobless claims, over 500k for the month!
Well what are we missing? The worst financial crisis since the great depression, staggering unemployment, ECT. ECT. ECT…… Then why do the big three have to get down on their hands and knees and beg? Did AIG have to beg? Did Citigroup? The list goes on and on. The largest manufacturing industry in our nation that represents over 4 million US jobs and our government might let them go bankrupt.
There must be a better way. If I where in charge here is what I would do;
I would give them a small short term bridge loan so that they could survive over the next couple months and meet obligations. During this period I would require them to hire bankruptcy consultants and put together a plan for a packaged bankruptcy. The government would provide the financing to pull them out of bankruptcy. This would do a couple things.
Flickr Image by: Congressman Markey
It would allow the automakers to restructure with their creditors, unions, employees, and most importantly get rid of all the legacy liabilities that have been haunting them for years.
Give consumer the peace of mind that the big three will survive and come back stronger. This way we still buy cars from them because we know the government supports the industry and its survival. All warranties will be honored.
Once this is accomplished the entire industry will be poised for restructuring and will continue to thrive for many years.
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