As Max Business Loans points out, the economy is slowly recovering but the small business credit market continues evolving. Large banks still have low approval ratings for business loans, and small banks have started to fill this void and approve more than half of the applications they receive.
Alternative lenders are still one of the best sources of funding for small business owners and entrepreneurs in 2013, particularly business owners with bad credit. Despite improvements in the market, most small business owners know that walking into a large commercial bank for a quick and easy loan is a thing of the past, but Max Business Loans shares seven alternative funding options for small businesses and entrepreneurs, even those with bad credit.
Purchase order financing, according to the company, is a popular form of financing that has been around for a long time. This option involves third-party financing companies, which pay a factory to manufacture goods for the business. When the financier is paid, it takes a commission and delivers the goods.
Cash advance loans are another form of small business loans that are available to established businesses of all sizes. Small businesses in particular use this funding option for quick money and then pay it back in installments that come out of future sales.
Cash flow financing, on the other hand, is an option for established businesses with bad credit. Using this option, alternative lenders use a business's expected cash flow to provide a loan for expansion or other purchases, so the loan is not based on credit.
Factoring is another option and it's one of the most popular forms of alternative lending as business owners can tie repayment into business receivables. With factoring, a small business may get cash for outstanding invoices by applying to a firm known as a factor. Many service industries participate in factoring by running credit card transactions through their factor's merchant terminal. The business receives money upfront for invoices, while the factor takes a share of the money.
Max Business Loans also points out that micro-lending is widely popular and many cities even sponsor these programs to encourage small business growth in their communities. Micro-loans offer smaller amounts than Small Business Administration loans, in general, and most businesses that use micro lending programs have very little business credit history.
Finally, Max Business Loans points to two newer options that have become possible through the Internet. Crowd-funding is an option for start-ups, as they can tap into a huge investor pool, although this option usually requires a unique or interesting concept that interests people. Peer-to-peer lending is also possible through the power of the internet. This option allows business owners to turn to peers for short-term loans using online lending clubs. While credit worthiness is a factor with peer-to-peer lending, individual investors can choose to participate in high risk loans for a higher return on investment.
As Max Business Loans explains, there are really dozens of ways small businesses can find the funding they need to grow, although some require thinking outside the box. Max Business Loans offers a range of loan services for small businesses and entrepreneurs, including cash flow financing and payroll cash advances. Business owners may apply for a loan online.
Max Business Loans is a direct lender focused on helping America's small business owners find the funding they need. They offer funding to everyone with lower rates and higher amounts based on qualifications and no credit check is necessary. Lending is based on business income and any business with cash flow can be funded.
