Entrust Cash Advance Blog

Three Realistic Tips for the Overly Optimistic Business Owner

Posted on May 8, 2012 by Lily

In most cases, entrepreneurs are optimistic people. They imagine themselves being able to avoid the hassle, pressure, and lack of freedom associated with working for the man. Instead, they get to set their own rules, follow their own schedule, and use their own talent, drive, and creativity to achieve personal success. Many small business owners believe that being able to create their own work independently will be the very thing that makes their business successful since they’re the only ones who truly has a say in how to operate the business. But in the current economy, in many unfortunate cases, this idealistic attitude can lead to trouble. A large percentage of small business owners are finding that their expectations for their businesses are not being met, and that primarily due to a lack of funding, the business is not as successful as they envisioned it would be.

Here are three trips every optimistic business owner should consider in 2012 before starting a business:

1. Understand What Secured Loans and Collateral Mean For You

financial planning for small businessIf you were one of the few business owners lucky enough to receive a loan from a major bank, you might have overlooked or not thought hard about the fact that these loans are collateralized and secured. What does this mean for you? It means that in the case that you default and are unable to pay back your loan, the bank can seize your home (or whatever else you used as collateral). Even if the banks claim that they will release your home after a year, in many cases, this is not the case: the banks will seize your home unless you are able to provide alternative collateral. What many business owners fail to realize is that there are unsecured loans they can apply for where the lender, and not the business, is at risk if the business fails. This type of financing is ideal for many new businesses who are struggling in this recession.

2. Consider the Worst Case Scenario Before You Start

Face it: there is the likelihood, no matter how small you believe it to be, that your business will fail. You need to be in a position to be able to accept responsibility if this occurs, and it will be anything but easy. Your investor might sue you or otherwise find a way to try to get his money back. You might have to liquidate your investments or savings to afford the cost of losing the business. If you are in a position where these types of consequences could be permanently damaging to your life, it might not be the best time or place to start a small business.

3. The More Elaborate Market Research You Conduct, The Better

Don’t only rely on your own personal observations or those of your close friends and family when it comes to market research of the people who will be exposed to your business. Even if you think you have a solid handle on customer behavior in your community and the types of potential clients your business will reach, extensive market research could provide results that you never expected. Knowing this information before you build your business could be a lifesaver. You might find that there is a better location for your business, a more specific product to sell, or a different demographic that you should be targeting. Be sure your business plan includes this elaborate market research before you engage in any financial transactions.

Posted in Business, Finance, Small Business, small business tips, Tips and Advice | Tagged , , , , , , | 1 Comment

Manufacturers Hurting Due to Lack of Access to Working Capital

Posted on May 7, 2012 by Lily

An article published in today’s CNN Money online, titled “Manufacturers to banks: We need money now,” depicts a somewhat troublesome trend in the small business economy. Although business has returned to many industries and revenues have begun to grow, they can’t grow the business as much as they would like because of a lack of access to working capital. In the manufacturing industry in particular, although the big banks acknowledge growth among manufacturing businesses, they still believe that lending them money will be too much of a risk. This is due to the seasonality of the businesses and the short-term nature of their work. The banks claim that even if business is booming now, it will be hard for these types of businesses to pay off their loans because their contracts might end too quickly and so revenues will slow down again.

This predicament is a serious, recurring problem that has continuously stunted the growth of the U.S. economy since the onset of the Great Recession in 2008. manufacturing business financingThese businesses are unable to hire new employees, market their product to their fullest capacity, or purchase the newest supplies and inventory available to them because they don’t have that extra financial boost that will take their business to the next level.

According to Chris Free, the CEO of MFG.com, who was interviewed in the CNN article:

“Any prudent business owner knows that cash is king. When funding is tight, you go into preservation mode, you restrict appetite for expansion and this hurts the economy,” said Free. “We all feel it.”

A Solution

The article fails to point out that there is a small business financing method that has become increasingly popular for the very reason of lack of access to business working capital. Merchant cash advance funding specifically addresses small businesses, such as the manufacturing businesses mentioned in this article, who are facing limitations because banks are denying them additional financing to grow. Although many believe cash advances to be a form of small business funding that is best suited to businesses that are hurting or desperate for capital, this is not the case. Cash advances are specifically designed for businesses who are processing at least $4k a month in credit cards (or $10k a month if the business is cash only) – so it is not the case that 100% of businesses qualify. But with the numbers mentioned in the CNN article, it is clear that many of these manufacturing businesses who need additional working capital would easily qualify for a merchant cash advance which could help their businesses to hire the additional staff, pay for new supplies, and market their product. In short, a cash advance would help these businesses grow even though the banks played no part in the funding process.

Posted in Business, Business Cash Advance, Business Funding, Finance, Small Business | Tagged , , , , , , , | Leave a comment

Small Business Interview Series Application

Posted on May 4, 2012 by Lily

Small business interview series

If you run a small business, we’d be more than happy to interview you for our Small Business Interview Series. In exchange, you get free press and a high quality back-link back to your business’ website, which will help you gain exposure and boost your rankings on Search Engines!

The process is simple!

  1. We will interview your business either through a short online questionnaire or over the phone.
  2. You tell us about your business and give us answers to the questions we asked.
  3. We will feature you on the Entrust Cash Advance Blog, including a link back to your website!

    4. Email Us With the Subject “Small Business Interview Series” to Sign Up!

Posted in Uncategorized | 1 Comment