Business Cash Advance Blog

A new Treasury report shows that "the nation's biggest banks have reduced their small business lending by more than $10 billion over the past six months", and its also been reported that the SBA has decreased the number of loans they back by 36% in 2009. In response, President Obama ordered Treasury Secretary Tim Geithner and Small Business Administration head Karen Mills to hold a conference to "determine what additional steps we can take to get credit flowing to small businesses that want to expand and create more jobs."

The problem is most small business owners don’t have the time to wait for the government to figure out a solution, if there is even a solution to be had. Business owners have turned to credit cards, but limits have been drastically decreased and interest rates have been drastically increased. All while owners are getting turned down left and right for help, their businesses are suffering. However, several small business owners across the U.S. have turned to an alternative lending option where they are given up-front capital in exchange for a small portion of their future credit card receivables.

This form of business financing, a business cash advance, was typically used by businesses that were unable to obtain bank and government loans due to poor credit; however, due to the current lending freeze, even creditworthy businesses are taking advantage of cash advances. The process to obtain a business cash advance is much quicker than a bank loan, the requirements are less strict, and there are no monthly payments. The advances are paid back through the cash advance provider debiting an agreed percentage of the business’s credit card sales, which allows a business to maintain a cash flow by only making payments when credit card transactions occur.

Companies like Business Cash Advance.com have been the lifeline for a tremendous amount of small businesses this year, and its anticipated to be the same for 2010.

In the meantime, while government officials, banks and credit card companies battle through finding a solution to the small business lending crisis, business owners need to consider alternative financing sources, such as business cash advances. There is no time to play the waiting game with the government unless businesses want to go out of business.