Where’s The Money? Finding Financing For Small Business Ventures

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http://www.ifthebanksaysno.com | In today’s tight credit market, entrepreneurs can struggle with obtaining financing to buy or start a business. Non-bank lenders can help, and a deal-maker can help entrepreneurs put together financing for new ventures.

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Where’s The Money? Finding Financing For Small Business Ventures

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Overview Many small business entrepreneurs operate under two mistaken beliefs: One, they’re going to get financed by a bank. Two, they’re going to get all their financing from a single source. In truth, banks only do a small fraction of all small business lending. To get the funding they need, entrepreneurs will need to seek funding from non-bank lenders.

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Credit Market Tight Banks have historically been tight-fisted with small business borrowers. On average, banks provide only about 7 percent (7%) of all small business financing. In the immediate aftermath of the 2008 financial crisis, banks provided only 1 percent (1%) of all small business financing. Between 2008 and 2013, lending to small businesses by banks decreased 27 percent (27%), according to Bloomberg Businessweek. Even if you can get a bank loan, it likely won’t cover all the funding you need.

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SBA Loans: Attractive, But Difficult If you can get a bank loan, chances are it will be backed by the Small Business Administration. These loans, guaranteed by the government, have low rates but often also have some stringent requirements, such as: 20 percent (20%) down payment 100 percent (100%) lien against business and personal assets Owner financing requirements force existing owners to finance 10 percent (10%) of the loan and be on standby for two to five years.

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Other Options Entrepreneurs who can’t get the funding they need from the bank have other options such as: Grants Private investors Money brokers Corporate credit building These sources have drawbacks that entrepreneurs should be aware of, however.

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The Problem With… Grants – They don’t often cover all the money that you need. There are many hurdles to getting awarded a grant. Private investors – Often make terms that are detrimental or unacceptable to the entrepreneur. Corporate credit building – Most programs are expensive and as they are based on credit building techniques that worked prior to the 2008 financial crisis, they provide disappointing results. Money brokers – High costs, often adding 10 percent (10%) or more to your debt. Also can negatively impact your credit by shopping your loan, causing a high number of credit inquiries. .

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Non-Bank Lenders Non-bank lenders provide a superior option to entrepreneurs seeking start-up or acquisition funding. Benefits of these lenders include: Non-bank lenders specialize in making small business loans. Unlike banks, who are looking for reasons to turn you down, non-bank lenders are looking for reasons to approve you. Fewer restrictions than private investors. Fewer hurdles to jump through than grants or bank loans.

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Possible Funding Sources Some sources of funding entrepreneurs can piece together from non-bank lenders to fund the start-up or acquisition of a business include: Equipment leases Equipment sale-lease back Merchant advances Supplier credit Supplier loans Tenant deposits Accounts receivable financing

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How Beyond Breakeven, Can Help Beyond Breakeven, Inc. can help clients find start-up and acquisition financing and improve the operations of their new businesses. We can connect entrepreneurs with many lenders who want to help small business owners realize their dreams. We can provide long term planning that will help owners establish, grow and eventually sell their businesses profitably. Once your business is off the ground, we can analyze operations to increase efficiency.

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About Beyond Breakeven, Inc. Beyond Breakeven, Inc. advises entrepreneurs on how to acquire businesses with minimal risk to their own finances and how to boost business performance. We structure deals that utilize funding sources that do not require down payments or collateral while most often times providing 100% of the funding needed to start or buy a business. Accredited by the Better Business Bureau with an A+ rating, we have a reputation for excellent client service and success. For access to a free video training series on the secrets of business funding visit http://www.ifthebanksaysno.com/

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