Many small business owners are being denied loans in today’s economic climate. Banks are becoming more stringent and creating more barriers on lending for the average business owner. Every day small business owners are questioning how they can continue to expand their operations with limited access to working capital. Fiscal year 2008 was one of the largest declines in loan history according to the Small Business Administration (SBA). The SBA made approximately 30,000 fewer loans compared to 2007.
In 2009, small business owners will need alternative funding sources to seek out working capital.Most small business owners generally prefer traditional funding methods. However, when traditional funding methods are not available, small business owners should be open to alternative funding options. For example, one alternative funding option that should be explored by the small business owner is factoring (also called accounts receivable funding).
Factoring is: the purchase of a company’s accounts receivables at a discount from the face value in exchange for immediate access to working capital. This transaction is not considered a loan; because the funding source advancing the working capital is purchasing an asset. Account receivables are considered an asset to the small business owner. Factoring account receivables will allow the small business owner to fund business needs such as: a new marketing campaign, purchasing supplies for a large order that needs to be processed, or even covering payroll. Factoring is one of many an alternative paths to profitable growth for the small business owner.
Searching for working capital can be a very frustrating and challenging process but is critical for continued growth. Looking beyond traditional funding methods can create opportunity and allow your company to continue to prosper even in tough economic conditions.
Copyright © 2009 Keith Lloyd
In 2009, small business owners will need alternative funding sources to seek out working capital.Most small business owners generally prefer traditional funding methods. However, when traditional funding methods are not available, small business owners should be open to alternative funding options. For example, one alternative funding option that should be explored by the small business owner is factoring (also called accounts receivable funding).
Factoring is: the purchase of a company’s accounts receivables at a discount from the face value in exchange for immediate access to working capital. This transaction is not considered a loan; because the funding source advancing the working capital is purchasing an asset. Account receivables are considered an asset to the small business owner. Factoring account receivables will allow the small business owner to fund business needs such as: a new marketing campaign, purchasing supplies for a large order that needs to be processed, or even covering payroll. Factoring is one of many an alternative paths to profitable growth for the small business owner.
Searching for working capital can be a very frustrating and challenging process but is critical for continued growth. Looking beyond traditional funding methods can create opportunity and allow your company to continue to prosper even in tough economic conditions.
Copyright © 2009 Keith Lloyd
i dun understand bussines,,But nice Post,,
ReplyDeletekeep Blogging and sharing..
thanks.
I think you have to find banks that helps the small and medium scale enterprise or specifically Development banks. Because they encourage business expansion of enterprises. Try it.
ReplyDelete