Monday, May 10, 2010

Another year of financing challenges

Small businesses will be faced with the credit crunch for yet another year according to published reports. Banks and lenders slowly continue to re-build their balance sheets although few are making any new substantial loans.

Many say we are suffering from the fastest ever shrinkage in commercail lending for small businesses and there's little if any sign of it coming to an end. Small businesses are dependant on local banks relying on them for capital, financing and lines of credit.

Until big bank finances are healthy small businesses will face challenges for financing. Alternative financing sources such as factors, venture capital groups and asset based lenders are the best bet in the short term for small business finance.

Monday, May 3, 2010

Small businesses turn to alternative funding sources for help.

Small businesses, particularly start-ups are turning to non-traditional financing sources to solve cash flow problems in their businesses and fund growth opportunities.

Many small businesses have been turned away from traditional lenders and are discouraged by the overall finance communities response to their needs. As a result many are seeking other avenues such as family members, equity partners short term investors, asset based lenders and factoring firms.

Credit is a problem for most small businesses, slowing down their ability to grow or stopping them all together. Patricularly now when institutions have revised their lending requirements and made obtaining new creidt more difficult business are looking for more creative ways to fund growth.

Be careful though. Many private investors want at least 25% ownership in a venture and banks want to secure loans with personal tangible assets.