Small Business Finance – Helping Small Businesses in a Big Way

Small businesses often need a business finance facility time and again and usually, the collateral comes from the owner’s personal assets.  This is why small business owners pay closer and more personal attention to their businesses. But what happens when personal assets are not enough?

One of the difficulties that small businesses face is keeping cash flow positive and access to small business finance facilities.  Oftentimes, there’s too much paperwork, the need for more valuable collateral and a higher loanable amount.  What’s more, conventional financing institutions such as banks find that small businesses have very low survival rates and they consider them high risk clients. 

It is a good thing that small businesses have other credit facilities they can turn to. The application process is much easier with minimal documentation and a stress-free repayment system. There are two types of small business finance options - business cash advances and unsecured small business loans (without collateral).

                These alternative funding facilities do not require business plans or extensive financial statements and near perfect credit scores. All they do is evaluate their applicants based on capacity to pay and the current market conditions.  Capacity to pay is based on daily sales volume, so previous sales records are necessary.  Payment is taken from a percentage of the daily debit/credit card sales – usually 10%. It is up to you to determine how much you need and how much of your profits you are willing to part with.

These small business finance facility has no fixed interest rate but it does incur cost of money, so you do need to assess how much financing you need and how much it will cost your business in the long run.  Daily payments or loan term is usually made between 3 months to 18 months depending on the loan amount or the value of the daily payments.

                Do not underestimate or overestimate the funds you need.  Falling short of your financial needs won’t be of much help and overestimating could add unnecessary burden to your business and put a strain on your cash flow.  Keep in mind that the higher the amount borrowed equals higher cost of money.

                Small businesses have a tendency to renew their loan account after a complete loan cycle.  This is why it is important to review the business’ performance before the loan cycle ends.

                Small business finance facilities are meant to help small businesses face the challenges of daily operations, the hurdles of innovation, research and much needed marketing to boost sales and market presence.  The financial boost goes a long way and it also helps small business in a big way.  Growth for small businesses also means the growth of the institutions that finance them.