Since 2008, the number of small businesses in the U.S. has climbed steadily. At the same time, small business bank loans have become increasingly more difficult to obtain. Without the ability to borrow cash from a traditional bank when it’s needed to grow their business, more entrepreneurs are turning to alternative financing options for the working capital they need. —
Some small business financial consultants have discovered a growing market niche in helping small business owners discover non-traditional specialty lenders and innovative financing tools. Orange County, California consultant Fred Cornejo is launching OC Financial business loan brokerage firm in Long Beach, offering a variety of tools that help small business owners find capital where it hasn’t been found before.
According to Cornejo, borrowers looking for alternative or innovative capital sources are not only business owners who can’t get funding from traditional banks due to less-than-perfect credit or high risk history, but include small business owners who simply want to try alternatives to the bank. Market opportunities offer some perks that traditional bank loans can’t such as quick access to capital and short-term financing when such an option makes sense.
In 2013, Pepperdine University’s Private Capital Access Index revealed that 71 percent of small-business owners it interviewed were able to borrow cash from friends and family while only 27 percent qualified for bank loans. Fifty-eight percent of those surveyed financed their company with personal credit cards after striking out at the bank.
A small-business financial consultant today needs to be able to help business owners easily access capital when they need it. They should be able to underwrite small business loans and have access to a selection of loan products that meet their clients’ varied financing needs.
Companies like OC Financial evaluate alternative loan products and sort out the best options for their clients, offering expertise and guidance to help small business owners select a workable option for borrowing and improving cash flow.
For instance, a merchant cash advance is a form of unsecured credit financing that allows a business to secure cash now and pay it back in a portion of future sales. This working capital financing provides business owners with quick access to amounts ranging up to quarter of a million dollars, working capital that can be used for any need the borrower chooses.
Most business owners need short-term operating capital at some point. Operating capital insures the business’s ability to maintain and grow its operations while managing both maturing short-term debt and immediate operational expenses.
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Release ID: 72080