Where to Get Business Financing When the Big Banks Won't Give it

Gathering business funds from a big bank may be out of the question right now. But just because certain banks aren't giving it, doesn’t mean that tens of thousands of small business owners don’t need it.

Just like there are various roads, highways and/or streets that one could take, all leading to the same destination, there is more than one route that a small business owner could take that leads to business financing.

Community Banks

Instead of giving up after an inability to secure a small business loan through a big bank, consider your local bank. According to an article titled "Community Banks Increase Small Business Loans," small business owners may have more luck at the small bank down the street than the big well-known branch. "As the credit freeze continues and the recession deepens, many community banks, generally defined as having less than $10 billion in assets, are reporting an uptick in loans and credit lines to small businesses," writes Stacy Perman in the Business Week article.

In fact, a small business owner who was interviewed in the article said the community bank he used was "easy to get a hold of and responded quickly to anything and everything [he] needed."

According to the article, "community banks make 20% of all small business loans, even though they represent only about 12 % of all bank assets." "Furthermore…about 50% of all small-business loans under $100,000 are made by community banks," writes Perman.

Drive down your neighborhood street. You may notice a community bank or two that you never even knew existed. Your small business funds just might lie behind those doors.

Merchant Cash Advance

The merchant cash advance is another option for business financing when the big bank falls through. Merchant cash advances work differently than bank loans, allowing lenders to provide small business financing for small business owners who have no collateral, less-than-perfect credit scores and/or who have not been in business for over a year.

The merchant cash advance utilizes credit card factoring, a process that allows borrowers to receive cash upfront and repay it through their businesses’ future credit card sales.

The merchant cash advance is often considered a more convenient form of business financing for many reasons. These reasons include looser requirements, the possibility to receive cash in as little as ten business days and a flexible repayment procedure that goes with the flow of business, as a small percentage of daily credit card sales is used to repay the advance.

In order to be eligible for a merchant cash advance, usually, a small business owner must own a business that processes at least $5,000 in credit card sales each month. The applicant must have been the owner of that business for at least six months.

With the merchant cash advance, small business owners have the opportunity to receive $5,000 to $500,000 for their businesses and the funds can be used however they choose. Many lenders also allow borrowers to renew their advances about every three to four months.

Small business owners need to know that big banks are not their only option. Tough times are times for innovation and give small business owners the opportunity to learn more about the financial world and how to get money for their businesses in any circumstances.

Merchant Cash Advance
Get up to $500,000 with a merchant cash advance.