Crowdfunding is catching up but small business loans still rule

Posted by GeorgeVelvet on January 13th, 2014

A latest concept of fundraising that even got a welcome from President Barack Obama is crowdfunding. The result of this was his signing of the Jumpstart Our Business Startups Act in 2012. The act now makes it legal for entrepreneurs to collect donations from customers to raise funds for their businesses. This concept of business funding seems simple but is it that simple? Time will tell… But till the time everyone settles around this concept small business loans will continue to rule the US market.

For any organization money is a lifeline. Through crowdfunding an entrepreneur can take money from their family and friends to ensure that their company doesn’t die. This is one of the fastest modes of getting business funding today. Venture financing and angel financing are there but they have lengthy processes and cannot match up to the speeds required by the small businesses.

The US government does offer help in the domain of small business funding through its Small Business Administration (SBA) agency. However, there is a catch in SBA backed lending. When you visit the SBA website there is an important paragraph that you must go through. It goes like this…

“SBA does not offer grants to start or expand small businesses. SBA's grant programs generally support non-profit organizations, intermediary lending institutions, and state and local governments in an effort to expand and enhance small business technical and financial assistance.”

Getting an SBA backed loan requires a business to fulfill many criteria. One has to submit their business purpose and they have to be eligible based on the size of their business, their use of the proceeds from the loan and also the nature of their business. One has to have strong personal and business credit history and in most of the cases collaterals are required. While SBA has helped many small business owners since 1953 in the current business scenario a small business owner may need loans faster than what is possible going the SBA way. Crowdfunding is there (as I mentioned earlier) but small business loans from specific financers are the fastest.

Imagine being eligible for small business loans basis your business volume through credit cards. Yes, this form of business funding is possible. Visit the websites of some of the lenders and fill the application form and you could have the money in your account within 2 working days of loan application. If your business accepts credit card payments you can get cash advance basis the monthly business volume through the card POS machine. There are some small formalities to fulfill and you will get an approval by close of day and the money in your account the next working day.

Small business loans are required by small business owners are not as cash rich as some of the largest US companies. This form of business funding is extremely flexible and perfectly suits the needs of small businesses. There is plenty of information on the internet and you should find out more.

There are different types of Business funding available for small businesses. However, small business loans provided by some specialist financers beats everything else in terms of speed and convenience.