Small Business Financing Solutions for Entrepreneurs

Article Contributed by Chris M

A typical dilemma today for young business owners is that they operate their new business with inadequate funding. These entrepreneurs believe that they will “get by.” The unfortunate reality is that most businesses cannot succeed under this premise because good customer service is generally the first sacrifice to be made in a tight budget. This is a fact for businesses just starting out as well as businesses that have been operational for years. Management will cut back employee hours and any extras that usually makeup enhancing customer experience. In order for any business to develop and expand with some form of success it will require all operations to run at maximum efficiency. A business does not have to cut back on important expenses during tough economic times if it acquires additional funding.

Business financing has started to become more easily accessible as numerous new private loan providers join the business funding industry. Despite the fact that banking institutions continuously refuse businesses access to funding, a large number of new private business loan companies are giving small businesses the working capital they need.

Many of these lenders provide you with business loans according to a business’ month to month gross income. This makes approving an application much easier so credit worthiness isn’t a major approval factor as it would be with most major banks. Business owners will not be subject to in depth credit checks so the application and financing process is also much faster. These types of business loans are called a merchant cash advance or an ACH business loan.

A merchant cash advance is a transaction between a lender and a merchant to acquire future credit card sales at a reduced price. The application process for this type of funding is usually very fast as there are no massive credit checks or document requirements. The amount of a merchant cash advance loan made available to a business owner can be as much as double the monthly gross income. The merchant cash advance as well as any extra fees are repaid with a portion of each credit card or debit card sale the moment it is generated via electronic payments from the processing company. For businesses that process credit and debit cards a merchant cash advance is a good resource for short term financing.

There are however a variety of small businesses today that collect their monthly gross revenues without the use of a credit card processing company. Manufacturing companies, construction companies, and a lot of small retail merchants only collect checks or cash as a payment option. A large number of online lending companies today offer ACH loans as an alternative financing solution for organizations that don’t feature credit cards as a type of payment. The loan company provides the business owner a bulk payment which is also an agreement to purchase a part of future gross sales at a discount. The payments to the lender are similar to a merchant cash advance whereas a portion of the revenues are deducted as they are deposited in the business account. An ACH loan is an excellent loan option for organizations that don’t utilize credit card processing.

In order to determine that you’ll be working with a reputable lender a business owner needs to view the lender’s web-based profile. Shield Funding or AdvanceMe are examples of a reputable lender with an ‘A’ rating and the both companies have been providing small businesses with funding for almost a decade. Whether you process credit cards or not, there are business loans available online today that can help you maintain the quality of your business through difficult economic times or the early development stages.

About the Author

Chris M writes for Shield Funding, a leading provider of business loans to many of the nation’s small to medium-sized businesses. Go to the website to learn about merchant cash advances, unsecured business loans, and several other important small business lending products.