Where is the Funding for Small Businesses in America?

As the United States economy struggles to rebound from the collapse in 2009 and subsequent recession, finding sources of funding for a small business isn’t quite as easy as it once was. The lending climate for small businesses in America is still in a bit of disarray, according to an article by the Washington Post. The article shows that federal officials, lenders and business owners aren’t in complete agreement about the availability of traditional financing to today’s small business owner... The Small Business Administration is touting an increase in funding for small business, but even a $70 million dollar bump in the Impact Investment Fund doesn’t stretch very far among the many applicants looking for resources. While conventional funding for small business is a bit more elusive than in years past, there is still funding to be found for the creative entrepreneur who’s not afraid to think outside of the proverbial box. Whether you’re looking for financing to expand your business or just to keep the operation running through a rough patch, there may be more funding options out there than you realize. Creative funding programs have risen out of the ashes of the 2009 collapse. Also referred to as “alternative financing”, here are some examples…



True Business Credit Cards

Using the strength of your own credit to offset a dearth of business credit is a reliable way of generating funding for your small business expansion, or just to keep things running through difficult times. Flexible terms mean that you’ll generally only pay interest on the amount of money you actually use, and credit lines of up to $200,000 are available. They’re much easier to obtain approval for than traditional business loans, and won’t damage your personal credit in the process. The key is making sure you apply for true business credit cards and not just personal credit cards with your business name on them. A true business credit card may approve based on personal credit scores but the credit line will not show up on personal credit reports. This protects your personal debt-to-limit ratios and balances your overall credit load. Business Finance Store has a special program which includes these type of cards.



Revenue and ACH-Based Lending

ACH loans, or Automated Clearing House funding, is a financing option that is growing in popularity as a source of funding for small business. While most alternative financing requires that the applying business have the capability of processing credit cards in order to be eligible, ACH loans are available to merchants that don’t process credit-based transactions. These flexible loans are based upon gross deposited revenues on a weekly or monthly basis into a bank account, and typically only require that an existing business be in operation for six months. Credit history and requirements are a bit less strenuous, which makes ACH loans more accessible to the majority of small business owners than more traditional financing.



Crowdfunding

The global scope and scale of the Internet means that you’re able to access an unprecedented audience as compared to business owners from generations past. The rise in popularity of crowdfunding sites takes that reach and pairs it with fundraising options that allow you to solicit donations or incentive-based financial gifts from potential clients and customers from around the world. Instead of paying out cash to fulfill the terms of a loan, you provide investors with reward incentives for their donation. An added bonus of the crowdfunding model is that it gives your client base a sense of ownership and emotional investment that inspires customer loyalty and promotion.



Retirement Funds Investing

When you use your personal retirement account to finance expansion or to keep your business afloat during a trying period, you’re able to obtain cash without penalties or taxable distributions. You’ll also be drawing from debt-free income, meaning that you won’t be taking on an additional expense in the form of loan repayment for funding your small business.



Navigating the complex world of small business funding in the aftermath of a financial crisis is challenging to say the least, but our experts are available to help you make the best possible decision for your business in times of financial hardship.



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