The global financial crisis has made it quite difficult for companies, especially small businesses, to get business loans. Ironically, it is also in this situation that smaller companies often need additional capital infusion to boost income. You may need to get small business loans to acquire a better business location, construct a new building, renovate your premises, pay for new equipment, fixtures or furniture or increase inventory and working capital.

Most Small Business Loans Require Collateral

To get business loans, even small business loans, is a major challenge.

First you need to identify which among the many types of small business loans you need. Small business loans ranging from $5,000.00 to $35,000.00 are called micro loans. For larger needs, such as for the acquisition of land, buildings and other major fixed assets, development financing is what you should find. There are also import export loans as well as franchise financing. Do your research to find out if you are qualified for small business loans guaranteed by the U.S. Small Business Administration or SBA.

Any of these small business loans will require extensive preparations and paperwork. As a small business owner, you will need to prove your credit worthiness through a personal credit history report. Lenders will also require a business plan which includes your credentials as the business owner, your company financial statements, business assets and an analysis of your market. All of these should be packaged in a professional loan proposal which presents how the loaned amount will be used to strengthen the business and how you intend to repay the loan. Most of all, you need to present your loan collateral – the assets you will put up to secure the loan.  

Quick and Easy Small Business Loans with No Collateral

For smaller acquisitions or day to day business needs, there is a way for entrepreneurs to get small business loans easily and quickly with no collateral. This is through merchant services.

Merchant services provide credit card services to businesses. This enables them to accept and process payments through credit cards or debit cards either through face to face purchases, online transactions, or even by phone or fax. Merchant service providers supply terminal equipment for card swiping, as well as the necessary software and high speed IP solutions.

Most businesses need credit card services since consumers routinely pay for goods and services through credit cards and debit cards these days. If your business has not taken this step yet, you may have been missing out on more than half of your income potential.

These same merchant services also provide the solution for your small business loans. Collateral-free loans can be availed of through their cash advances, with the loan amount computation based on the monthly credit card revenue your business generates. Credit card sales requirements may be as low as $3,000.00 a month. You will not be asked for collateral since your future revenue is your collateral.  

The best types of merchant cash advances do not require fixed monthly payments nor do they impose deadlines on loan payment. A certain percentage is instead deducted automatically from your credit card revenue each month to go towards loan payment. This way, you never have to worry about loan amortization.

Once your cash advance has been fully paid, you may apply for another one. It is like having a revolving credit line. Make sure that you compare the terms of several merchant service providers, though, and read the fine print on contracts. There are so many merchant service providers competing for your business that you’ll surely find one that fits your needs.

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Setting up a home-based business may be a more cost-effective alternative to setting up a major company, but it may still drain the limited resources of a small business owner. To keep the business going, small business loans will definitely be necessary. These can be availed of through credit card services. This article will show you how.

First, you need to set up your home based business. Do your research on the type of business you want to establish. Find out what licensing and zoning requirements you need to meet and ensure that you meet them all. Do not attempt to cut corners here.

Get the services of an accountant, even if only on a consultancy basis, to help you set up your books and records correctly from the start. Ask for help in determining deductions so that you can plan on your business expenses. Establish a routine for keeping strict records of all income and expenses right from day one. Keep all business related receipts, invoices, client records, bank statements, bank deposit slips and canceled checks.

Being home-based, you need to set aside a particular place in your home just for your business. Make sure it can accommodate all the necessary equipment. Check that you have the appropriate electrical outlets and have them installed if needed to avoid overloading your system. Set up rules to keep the area insulated from household noise and disturbances.

Have a business phone installed that is separate from your residential line. Avoid having your children answer the business line. Install an answering machine to take calls when you are out or occupied.

Get a post office box so that you can use that address in your official stationery and other documents, keeping your business profile professional. Hold client meetings in rented conference rooms or set business meetings in good restaurants.

One of the most important steps in setting up your home-based business is to acquire credit card services that will enable you to accept credit card payments and debit card payments. These credit card services provide all the necessary software and hardware for you to be able to process payments in person, online or by phone. This step alone already expands the customer base that you can access.

Credit card services will also serve you well once your home-based business begins to feel the need for additional capital. When you need to get small business loans, you will not have to approach banks which are most likely not sympathetic to small home-based businesses.

The need for small business loans usually comes when the home-based business is already at least a year old. At such time, your home-based business would have created an average monthly credit card sales record with your credit card services company. You can refer to that when you approach your credit card services company for small business loans, sometimes called cash advances.

Credit card services do offer small business loans to their clients based on average monthly credit card sales, without the need for any collateral. The aforementioned average monthly credit card sales guarantee your company’s capability to pay the small business loans. Payments will be automatically deducted as a percentage of future credit card sales. This arrangement frees you from worrying about the amortization for your small business loans, too.

As soon as you pay up your small business loans completely, you are automatically eligible for new small business loans for as long as your home-based business is getting a good monthly average in credit card sales. With the help of credit card services, you can continue to expand and grow your home-based business.

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In the midst of the global economic crisis, many small businesses are on the brink of closing down if not enough capital infusion is found. It is now even more difficult to get small business loans from banks, though. Ironically, the exact reasons why small businesses need such small business loans – the fact that business has slowed down and profitability has plummeted – are the same reasons why banks turn them down for loans.

Small businesses now have to be more resourceful in finding alternatives to small business loans.

Government Grants and Contracts Instead of Small Business Loans

The American Recovery and Reinvestment Act signed by President Obama in February 2009 caused the pumping of billions of dollars for the revitalization of the economy. Because of it, there are plenty of government grants and contracts available to small businesses. These can be alternatives to small business loans.

But how can small businesses avail of the stimulus program?

The Association of Procurement Technical Assistance Centers (APTAC) has the responsibility for helping small businesses obtain and perform federal, state and local government contracts. It has Procurement Technical Assistance Centers (PTAC) throughout the country, ready to help small business owners to get registered and find opportunities in the area of government grants and contracts. Counselors assist small businesses in filling out bids, proposals and quotations.

The PTAC holds seminars teaching small business owners all the ins and outs of government legalese, including acronyms and registries. A one-day seminar with PTAC covers what small business owners may take months to learn on their own.

The PTAC then helps small businesses with Central Contractor Registration (CCR), a requirement for doing business with the federal government. This registration can be so complicated that some companies take two days to do it when the PTAC counselor can help them get through it in 15 minutes.

Local PTACs will be of help in acquiring state and municipal contracts.

Other resources that small business owners should consult include the Small Business Administration (SBA) which also coordinates with the APTAC; the General Services Administration (GSA) which acts as the government’s purchasing department and provides information on becoming an approved vendor; the Federal Business Opportunities website (fbo.gov) where federal contract opportunities currently available are posted; and the Small Business Innovation Research website (sbir.gov) where grant and funded research opportunities for small businesses are listed.

Cash Advances from Credit Card Services Instead of Small Business Loans

Another alternative to small business loans are cash advances from credit card services. This option is much easier than winning government grants and contracts.

Most small businesses are already availing of credit card services that enable them to accept payments by credit cards or debit cards. This is practically a requirement to doing business these days, with people hardly paying cash for goods and services. Many small business owners do not know that they could avail of cash advances from these credit card services, though, and that such advances can actually equal small business loans.

The amount that a small business can borrow is based on its average monthly income from credit card sales. This is so because the cash advance does not require collateral and future sales receivables from credit cards stand as the collateral. Payment will also be done through automatic deductions from those future credit card sales. There will be no set monthly amortizations. Instead, a certain percentage of the sales will be allotted as payment. The small business owner, therefore, need not worry over where to find cash for loan payments.

Cash advances from credit card services are the best bet of small business owners as alternatives to small business loans.

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Bad credit is one of the main reasons for bank loan denial. A credit score lower than 580 will most likely ruin your chances for a business loan. Multiple credit checks also lessens your chances for approval. And of course, a recent file for bankruptcy will ensure denial on your request.

Fortunately, there is no reason for despair if you belong to this group of people. There are now available alternatives for getting a small business loan, regardless of your bad credit. It is important, however, that you understand your circumstances before jumping into these alternative means for a business loan.

You can opt for an unsecured personal loan in such cases. But before you do, consider these factors first. One, how much do you need as a business loan? Factor in the numbers and come to a close estimate of how much you really need. Two, how much can pay each month. You have to note that personal business loans often have higher interest rates per month and if you’re not careful, you might become more in debt than you actually were, before the business loan. And three, will you be making minimum payments? Avoid making minimum payments because it actually costs more in the long run.

A business cash advance is also one way of securing the money you need. A small business loan through cash advance is  relatively an easy process to go through as compared to borrowing money from a bank. Most small business, even if they do have good credit, have often little asset and property. This is what makes business cash advances a good alternative for small entrepreneurs in need of immediate money. The only important thing your business should have is access to credit card services (i.e. you accept credit cards for transactions). You just need to have your business’ credit scores established. The best way to do this is to separate your personal credit from your business credit. It is recommended that you control most, if not all, of your business credit needs from only one of two credit card service providers so you have better chances at getting approved quickly. Lastly, your business will need to have gained $2,500 to $4,000 as minimum credit card sales per month.

Most cash advance providers base the amount of business loans by average monthly credit card sales, and of course, your actual need for capital. A business cash advance as a business loan is recommendable because the processing time for approval of your business loan can be as short as 3 days. Since newly opened small  businesses encounter a lot of time constraints with suppliers and clients, easy and immediate access to additional funding is always a plus. Furthermore, cash advance as a small business loan now comes easy with the help of the internet. You can apply for a business cash advance online and have it approved the next day. The business loan will be directly deposited into your account once it is approved.

Use your small business loan to purchase new equipment, marketing, pay debt or taxes, or pay the payroll. Banks and big lending companies are now not the only way of getting a small business loan for your immediate business needs. Fast, online cash advance is now the new means of making your business grow and compete in whatever market you are thriving on.

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To achieve financial independence, experts encourage even currently employed individuals to consider entrepreneurship. Setting up your own business, no matter how small, is touted as one of the best ways toward building the foundation for wealth. Those who are concerned about having a safety net need not take the plunge recklessly. One can start setting up a small business even while employed.  

Of crucial use to small businesses are credit card services and small business loans. The entrepreneur needs to know how to avail of these tools and how to effectively wield them for maximum business growth.

Credit Card Services

A small business would do well to get reputable credit card services in order to prosper in the current business climate. Availing of credit card services will enable it to accept both credit card and debit card payments. This is true either for brick-and-mortar businesses or internet based online businesses. After all, most consumers nowadays routinely use credit cards or debit cards for payment purposes. It only makes good business sense to be well-equipped for the needs of credit card users and debit card users as well as for the needs of customers who pay in cash.

Merchant services provide credit card services covering a wide range of solutions for the processing of credit cards and debit cards as payment options. These credit card services include traditional terminal equipment at point of sale, where credit cards or debit cards are swiped. It also includes software and high speed IP solutions for both traditional commerce and e-commerce. Credit card and debit card payments can, therefore, be accepted in person or through the internet, by phone or by fax.     

Small Business Loans

Any business – whether a small start-up business, a medium-scaled one or a big business company – will be needing an infusion of additional capital sooner or later. Additional capital is always needed for expansion, additional inventory, additional manpower, new systems, new equipment or a new physical layout.

Capital is not always easy to come by, though. The original investors’ personal coffers may have been emptied by the earlier outlays. Prospective investors may not be keen on shelling out funds in times of crisis. Businesses, therefore, have no choice but to seek business loans.

Getting business loans is a difficult process. Even small business loans are not readily approved. Be prepared to present a lot of documentation and paperwork. For small business loans, the proprietor’s personal credit history is taken into account and related references need to be submitted. Of course, the company’s financial statements are just as important in proving the feasibility of the business and its capacity to repay its business loans. Having a detailed business plan will show your business strategies and projections, demonstrating your business acumen.

Unfortunately, even with all the requirements completed, applications for business loans – including small business loans – are, more often than not, disapproved.

Solutions

Some merchant services provide a comprehensive solution for the needs of small businesses in relation to credit card services and small business loans. The set up is elegantly simple. A small business need only avail of the company’s credit card services to be eligible for merchant cash advances. These cash advances are actually small business loans, except that there is no need to go through the complicated application process for business loans. Repayment is made very easy and worry-free, too. A certain small percentage is built into the credit card processing rates to take care of the advances. This way, repayment is actually done automatically in a very affordable manner and according to income flow.

Small business owners would, indeed, be wise to look into these timely business solutions.

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Many small business owners have been disappointed when their applications for small business loans were disapproved by banks under the Small Business Administration’s program for America’s Recovery Capital. According to an article written by Robb Mandelbaum in the August 12, 2009 edition of The New York Times Online, “the program is off to a slow start.” It seems that most banks are reluctant to approve applications for small business loans.

Mandelbaum reports that the Small Business Administration’s program has $255 million to give away, enough to give small businesses 10,000 loans reaching as much as $35,000 each. However, two months after the program was launched, there have only been 1,127 small business loans released, with a total of $36.8 million.

Sources are saying that banks are not very keen on participating in the Small Business Administration’s program because giving the small business loans would not be very profitable for them. Paul Merski,.chief economist of the trade association Independent Community Bankers of America, said, “There’s not a lot of profit motive in a $35,000 loan stretched over six years.” Bob Seiwert from the Center for Commercial Lending and Business Banking at the American Bankers Association reveals that, because of strict underwriting standards, servicing the small business loans becomes even more expensive.

The banks have also found more ways to restrict the approval of small business loans with the Congressional restrictions on loan eligibility. According to Congress, in order to qualify for the Small Business Administration loans, small businesses need to be both struggling and viable. That means the business should have had an “immediate financial hardship” such as a 20 percent decrease in revenue. However, the business must also be at least two years old with proof of positive cash flow in one of the previous two years. It should also submit a two year cash-flow projection proving that it will be able to afford loan payments.

Because of the Congressional restrictions, banks are more likely to approve small business loans from their existing clients. Merski said, “From a financial perspective, it really is a loan that makes sense for an existing customer. You’re not going to have to put out a lot of resources to do a very costly underwriting. You know the business.”

Those who are working in support of small businesses are very much disillusioned. An example is Alex Cooper who is a counselor at the Pima Community College Small Business Development Center in Tucson. He said he had assisted almost 30 small business owners with their loan applications but none of them had been approved. “It’s a disappointment. I thought the banks would be more interested in the community and try to help small businesses,” he said.

When the applications for small business loans are disapproved by banks under the Small Business Administration’s program for America’s Recovery Capital, small business owners still have another option. They can get the equivalent of small business loans from their credit card services.

Credit card services provide their clients with the ability to accept payments through credit cards or debit cards in person, online or through the phone. Clients who have established a certain minimum in average monthly credit card sales are qualified to apply for cash advances that are like small business loans. Payments are automatically deducted from future credit card sales.

If you are a small business owner, you do not have to go through the hassles of applying for small business loans with banks who are reluctant to participate in the Small Business Administration program. Get your trouble free small business loans from your credit card services instead.

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