Even with JPMorgan’s $6B in profit this last quarter and the economy slowly growing, small business owners still concerned about the future. They are cautious about the recovery and fiscal uncertainty and are holding onto their money. Few are investing in the economy and expect a slowdown in the next 2-3 quarters.
The business owner is still hesitant to expand, hire, or overbuy inventory. Worried about Obamacare, which kicks in soon, entitlement programs that could hurt them somehow, and the regulatory environment that this current congress has created. Business owners are still running scared. They feel comfortable saving their money and keeping it close by.
The Growth Advantage
There are a decent number that look to take advantage of this slow growing economy though. They choose not to use their own capital though and look for alternative financing through small business funding sources and alternative lenders. They do not feel comfortable approaching banks. Over the last 5 years they tried that only to have a decline notice 8 weeks after attempting to secure $50,000 or even $15,000 in financing to hire or buy inventory. It is worth it to borrow from these alternative lenders and pay a higher fee but it is tax deductible and ultimately makes sense to have the financing at the snap of a finger. Usually, alternative lenders who provide this short term capital can approve and fund within days. They don’t require reams of paper and documentation and are very responsive to small business owner’s needs.
Use For Business Financing
A common use of this type of financing is used primarily by retail establishments like restaurants, salons, clothing stores, auto body shops, and bars. These are the little guys who banks overlook at times and feel are not worth the time and money to work with. Even professional offices like doctors’ offices, chiropractors, dental offices, and alternative medicine practices use this type of fast funding short term capital infusion.
The Right Choice For Your Business
Making the decision to take on one of these capital infusions should be handled carefully. Small business owners still concerned should shop around for the best deal or better yet utilize a broker in this space to handle all the calls, find you a lender, find you the best rate and term so you can concentrate on your business and making money. Otherwise, you will be hounded by lenders requesting documentation and running your credit report multiple times. The broker in this case makes perfect sense. They are there to act on your behalf. Yes, they get a commission but first they have to close the deal and they won’t be able to pull the wool over a small business owner’s eyes. The broker knows this and is cautious. He or she wants to build a relationship with the small business owner so in the future they have the opportunity to earn again. It’s a two way street and hopefully it works out for all involved.