As reported, by the New York based Capital Access Network, entrepreneurs are facing a near crisis when it comes to obtaining financing to maintain or expand their business. In recent years, small businesses have been credited with jump-starting the economic recovery and improving unemployment. Unfortunately these same businesses are under-capitalized and as many as 90% run the risk of failure during the first five years.
The research highlighted that businesses have a low awareness of alternative funding options and and often benefit from these funding options. The survey asked small business owners to identify the funding methods they find appealing and sources of capital they had applied for in the past. The results stated that 90% found traditional bank loans to be appealing, yet only one in four actually applied, despite their need for capital. Of those surveyed 55% felt that loans from family and friends were not appealing and 45% did not want to “cash out” the equity in their home to finance their business. The survey found that most small business owners were only aware of traditional options; bank loans, SBA programs, and home equity options.
The survey pinpointed a lack of awareness of funding options available such as merchant cash advances, factoring, and purchase order funding. At least 73% of respondents were unaware they can sell receivables, including their future credit card sales, in exchange for access to immediate working capital. Most respondents were amazed to discover the application process was very simple and that funding can occur very quickly. An overwhelming 92% responded that they would find it appealing to have access to such financial products.
If you, or someone you know, could benefit from alternate financial products we would love to discuss some available options. Please contact us or email Kim@funding4you.com to discuss some options.