Hard Money Loans

If you find that you are having difficult when looking for a business loan then there are a number of different potential funding avenues that you may want to investigate. In fact, you may want to investigate these alternative financing methods even prior to beginning the business loan application process.

In regards to obtaining debt financing, the alternative to this in general is that you could seek to raise capital from angel investors or a venture capital firm. These companies specialize in making equity investments into companies that have substantial growth potential. However, unlike a business loan, an equity investor will require that you sell shares of your business to the individual or investment firm. Additionally, many professional investors will want a substantial say in regards to the direction of the company, and they will want to sit on the board of directors.

Another alternative to a traditional business loan is a business line of credit, which much like a business loan, can be secured by real property that you already own. If you do not require one lump sum of capital in order to launch of expand your operations then it may be in your best interest to secure a line of credit that you can drawn down as needed. Much like a business loan, a formal business plan, personal financial statements, credit checks, and collateral checks will be required to secure this type of financing.

If you are already in business, you can also obtain a cash advance on your accounts receivables or credit card receivables based on your monthly volume. However, these business loans usually carry very high interest rates as they are secured ultimately by your customers’ ongoing ability to you. This is often referred to as factoring, and this method of obtaining a business loan or line of credit is really only appropriate if you operate a capital intensive business.

Business cash advances are a great alternative to the traditional business loan, but there are some small business owners who cannot take advantage of this method of business financing.

Home-Based Businesses

In order to qualify for an advance, the business loans alternative, a merchant must run his/her business out of a storefront/office. Why? Since merchant loans are unsecured and require no collateral, merchant cash advance providers are taking a big risk when they advance small business owners up to $500,000.

Merchants who operate from an office or store-front will usually have a business lease. A small business owner who is held to a lease is more likely to continue running his/her business until his/her advance is fully repaid.

Non-Merchant Businesses

One of the selling points of the business loans alternative is the flexible method in which it is repaid. Rather than requiring merchants to make monthly, out-of-pocket, fixed payments, providers deduct a small percentage from a business’s daily credit card sales. This procedure takes place for six to eight months, until the advance is repaid.

Non-merchant businesses who do not process credit card sales will not be able to partake in the repayment method that business cash advance providers use. Therefore, they are ineligible for advances.

Merchants with Unresolved Bankruptcies

Small business owners who receive merchant cash advances cannot have unresolved bankruptcies. Merchants who have filed for bankruptcy in the passed, but have resolved the issue may still be eligible for a business cash advance.

If you own a office/storefront business that processes credit card sales and you have no unresolved bankruptcies, the business loans alternative may be right for you. Get a free online quote today!

Author: Gaston Castro
Article Source: EzineArticles.com
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The Capital Access Network recently surveyed 276 small business owners in the fields of restaurant/hospitality, health/medical, retail, service, etc, all of which accept specific credit cards within their businesses. 87% of the surveyed business owners feel that access to a readily available line of credit is important, especially in today’s economy. And although 76% of those business owners still feel that banks are one of the most trusted sources of capital, 42% feel that it is important to have a back up plan, in case the bank does not come through.

For a small business owner, there are many reasons why a bank would not approve a small business loan. These reasons may include poor personal credit history, low business cash flow and lack of collateral. A small business loan may also be denied if the business in question has not been in existence for three or more years. Therefore, a person who is just embarking upon his/her entrepreneurial journey, attempting to finance a startup business, is very likely to have difficulty finding a bank that will approve a loan. This has created a catch-22, producing a desire for alternative sources of small business financing.

87% of surveyed business owners who requested capital and were not provided these funds by their banks, stated that the banks did not offer an alternative method of funding, and 69% stated that they would consider an alternative had the bank proposed one.

Although many banks may not be offering alternative ways for small business owners to receive funds, there are other options. Many companies offer small business cash advances to business owners. A small business cash advance is similar to a loan, as owners are offered a large amount of money and required to pay it back to the lender. However, these cash advances are easier to obtain than bank loans. They have fewer requirements and utilize an automatic repayment plan where the lender deducts a percentage from each credit card sale until the cash advance is completely paid off.

These cash advances are specifically designed for small business owners who are unable to get approval for a bank loan, therefore providing the alternative that 69% of surveyed small business owners would have considered if offered.

According to a survey released by the Federal Reserve, many banks have admitted to tightening their lending practices over the past three months. Credit risks are increasing and the economy is weakening “…due to rising energy costs, turbulence in the secondary credit markets…and the anticipated impact of relaxed underwriting standards over the past few years…” sates the survey. The survey predicts these tightened practices to continue over the next year, possibly producing more potential seekers of small business cash advances.

Author: Gaston Castro
Article Source: EzineArticles.com
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Unsecured business loans can be very difficult to get. There are many factors a bank is going to consider that might make it impossible for you to achieve a positive response.

Unsecured business loans are loans for a business where the company doesn’t have to put up any collateral for the loan. These loans are common for very successful businesses that show a lot of revenue and assets. It is very difficult for most people who want an unsecured loan for a business to get a good response from a bank if they don’t meet many different stipulations.

The stipulations usually required from a bank when you are asking for unsecured business loans usually require good credit. You must have a high credit score. The company must have a proven track record of high revenues and success for the past year or two. The company must show more assets than liabilities and not be in the negative on the books in any way.

There are alternatives to unsecured business loans if lenders are not seeing the big picture that you do. The best alternative to a lender giving you money is through a friend or a family member. If you have a friend or a family member who has the money to help you with the money you need then you won’t have to worry about getting turned away from the banks. A friend or family member also won’t charge you large interest rates like a bank will either.

Coming up with the money yourself is the second alternative for unsecured business loans. Obviously the reason you need the loan is because you need the money. However, you might be able to sell some of your assets or start a savings program with your revenue so you can avoid getting turned away from the lenders. This is the best method because you won’t have to pay anyone back for the money later.

Another alternative to unsecured business loans is by finding government grants for your small business. There is millions of dollars that goes unclaimed every year and if you can get a grant you won’t even have to repay the money but show the government that you spent it on your business. This is an excellent idea for any type of small business because you don’t have to pay all grants back. Grants are free money the government sets aside for small businesses as a way to stimulate the local economy. Most small business owners never consider business grants before they ask a lender for money.

If you continue to get turned away for unsecured business loans you should consider an alternative for your company. There are many alternatives to unsecured loans that you should think about. The best ways to get money rather than asking a lender is by saving it yourself, asking friends or family members, and even looking for governmental grant programs for free money. There are many alternatives to getting a loan from a lender. Doing the proper research will help you with your endeavors.

Author: Anthony Griswold
Article Source: EzineArticles.com
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Until recently, merchants had not been actively looking for an alternative to small business loans.But recently bank lending has dwindled and the recession’s steady grip on the employed, the unemployed and entrepreneurs alike, has sent business owners on a frenzied search for alternatives to small business loans.

Myriad magazines, newspapers and blogs, etc., have given advice about business loans alternatives, including angel investors, venture capitalists, and p2p lending, but one of the best small business alternatives is the merchant cash advance.The merchant cash advance is considered one of the best alternatives due to its multiple selling points, which are as follows:

Unsecured
Being able to get business funds with no collateral is an excellent deal, especially today.Small business owners enjoy the fact that with business cash advances, they can get up to $500,000 in unsecured business funds, which can be used with no restrictions.

Flexible
Flexible repayment procedures in which providers deduct a small percentage from borrowers’ daily credit card sales allows small business owners to focus on running their businesses rather than making fixed monthly payments.It also allows the actual payment amount to fluctuate (payments are lower when sales are lower and higher when sales are higher).

Minimal Requirements
It’s easy to qualify for a business cash advance.A merchant who has owned his/her business for at least six months, processes a minimum of $3,500 in monthly credit card sales, has at least one year remaining on the business lease and has no unresolved bankruptcies, can qualify for $5,000 to $500,000 dollars through a business cash advance.

Renewable
Merchant cash advance lenders allow borrowers to renew their advances when they’ve completed 60 percent of repayment.Renewing is fast, easy and convenient.

Get a free online quote today!

Author: Gaston Castro
Article Source: EzineArticles.com
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