5 Things Business Owners Must Consider During Growth or Survival Periods

By Karlene Sinclair-Robinson

Growing a business in today’s market is all about survival of the fittest. Surviving through the uphill battles of being an entrepreneur is critical. Surviving through the growth stages of the business is just as vital as when your business is in a negative cash flow period or downhill mode.

How you survive through these stages will determine whether your business will be around or close for good. It is important to define ways to deal with the ups and downs in business. You must defining key strategies to stay afloat through.

Here are five (5) things to consider when faced with either survival or growth periods and you need access to capital to finance for your business:

1. Who are your clients?

It is important that your client base is clearly defined. If you have clients in all three sectors—business-to-business (B2B), business-to-government (B2G) contracting opportunities, and business-to-consumer (B2C)—you must understand the dynamics of each sector and the significance of how these dynamics affect your access to capital, especially in the non-traditional lending arena of alternative financing.

2. Who is guaranteeing payment?

It is important to understand the payment methods your clients might use to pay you. Whether you receive payments from the government, a business, or a consumer, this information will dictate the type of financing your small business can use for future growth or for the survival of your business.

3. How do you receive payments for goods and/or services?

Each business owner determines what methods of payment are acceptable for their business. Payment methods could include cash, checks, direct deposits, credit card payments, and online credit card payments using sites such as PayPal or AlertPay. You may also invoice your clients and allow them terms, such as 30 days, to pay. These payment methods will dictate how your small business can access working capital and what financing source is best suited for your business.

4. What are your payment terms?

Business owners often give their clients specific terms to pay their invoices. This method is primarily used when invoicing clients against services they have used or products they have received. The average payment term is 30 days but this does not mean your clients will pay during this time period. When your clients cannot pay your invoice within the terms you have agreed upon, you are holding a paper that is not worth much. In this situation, you will need to revise your payment terms or obtain financing to help your business stay afloat until your clients pay the money they owe you.

5. Why have traditional bank lenders turned you down?

It is important to understand why your bank turned you down for a business loan or line of credit. Being a bankable customer is always the goal, but you might not always be considered as one. To regain the status of being bankable, you will need to fix a number of things first. In the interim, you will have to select non-traditional (alternative) financing options. These financing options should be used to get you back on track, and alternative financing sources will work with you and your bank if you are a good fit.

Remember, it is about staying in business, providing great goods and/or services, and employing individuals who will give your business an outstanding reputation. Do not be afraid to diversify your business, if that is what you need to do to survive. Sometimes staying on the same path is not the best approach. You might have to adjust the route you are taking to achieve the business success you desire.

Why Micro Loans Could Be The Answer to Many Small Business Owners Financing Needs

By Karlene Sinclair-Robinson

Small business owners, if you have never considered accessing a Micro Loan, you might want to take a look at this viable financing option. Some of you might think that these types of loans are used only in Third World countries. Perhaps you have heard of lending sites such as Kiva.org, which primarily finances individuals living in countries other than the United States who are starting their own businesses.

Micro Loan financing is one of the best small business financing options available in today’s tight lending climate. This type of financing has been around for many years. Micro Lenders have finance entrepreneurs to the tune of billions of dollars worldwide. There are many other financing options available, but this type of financing has survived the recent financial storm and continues to grow exponentially.

To know if a Micro Loan is a good fit for you, first, determine if a small loan amount is adequate for your business. Next, consider the criteria you must meet to be approved for a Micro Loan. There are many types of Micro Lenders and they all have different processes in place to either approve or decline your loan request

The answers to the questions below will help to determine if a Micro Loan is right for you:

* Why should I use a Micro Loan? Large numbers of Micro Loan requests have continued to be approved since the financial crisis hit in 2008. Prior to the economic downturn, lenders would typically take two to three weeks to approve a loan request. Since 2010, traditional loan approvals have taken as long as ten (10) weeks or more. Many Micro Loans are now being approved in six (6) to eight (8) weeks. This time-line is, of course, based on factors that must be taken into consideration on a per client basis.

* Where do I access a Micro Loan? These loans are available through local, regional, national, and international sources. These sources have their own guidelines for approving loans. Some of these lenders are privately held “for-profit” companies, while others are “nonprofit” or “not-for-profit” organizations.

* What do I need to access a Micro Loan? The lender will require such documents as your credit report, itemized “Use of Funds” list, cash flow statements, bank statements, and any other document the lender deems necessary for them to feel comfortable in approving your loan request.

* How do I qualify for a Micro Loan? You will qualify for a loan based on the requirements of the Micro Loan lender you use. These lenders will request enough documentation, collateral, and other information to make them comfortable with the risk they are taking to loan you money.

* Does my type of business fit this loan option? Each Micro Loan lender sets their industry specific requirements. You’ll need to determine if the source you’re working with will finance your type of business. If you don’t know your industry category, check the NAICS codes system (North American Industry Classification System) at http://www.census.gov/eos/www/naics/.

Many of you may have tried unsuccessfully to get loans from traditional financing sources such as banks. Perhaps your lender did not explain clearly why you failed to qualify for a business loan. Maybe you did not prepare well for traditional financing. For example, if your credit score was too low, or you didn’t have sufficient collateral to offset the risk associated with the loan amount you requested.

If this is the case, a Micro Loan could potentially improve your financial situation. This loan option is a great way to get your business moving quickly. You can access this type of financing based on a number of factors.

Micro Loan Factors to Consider:

* Start-ups (less than 2 years in business) – $15,000 to $25,000 loans available

* Seasoned businesses (more than 2 years in business) – $35,000 to $50,000 loans available

* Loans use available collateral such as equipment, vehicle(s), jewelry, etc.

* Loan approval time-line – 6weeks to 10weeks or more (per lender)

* Some lenders lend nationwide, while others finance regionally or locally

* Types of industries – All types included with restrictions in the construction and medical industries

If Micro-Loan financing fits your small business needs, then by all means use it to grow your business or help stabilize it. Remember, it’s a loan option you can use and reuse in shorter periods of time when compared to repaying a loan for a larger amount. Be sure to prepare effectively for this or any other financing option so you can qualify and get the working capital you need.

If you don’t know where to look for Micro Loan sources, check with your local Small Business Development Center, Women’s Business Center, Small Business Technical Center, local Chamber of Commerce, or via this website’s Contact Page.

5 Reasons Why Your Website is Important to Financing Your Small Business

By Karlene Sinclair-Robinson

Today’s small business owners have so much to do when engaging their customers. Staying hyper-focused on bringing in new customers is important. It is also important when courting a financing source, whether traditional or nontraditional. When you are in need of financing, especially if you are a start-up or small business owner, your financing source will become a vital part of your business. What a lender requires is just as important as the needs of your customers. You want customers to buy your products or services, or both. You also need the lender to finance the survival or future growth of your business.

Here are five (5) important reasons to have a website:

1. Online Presence – Having an online presence gives potential lenders or investors and customers immediate access to your business. They also have the opportunity to see how you present your business in the marketplace. It is important for them to read pertinent information that enables them to make decisions that will benefit them firsthand. This information will help them determine how you view your products and/or services, and how you value your customers or anyone else who interacts with you.

2. Tells Your Story – Your website provides the information others need to make a decision regarding purchasing your products and/or services or financing your business. Your “About Us or About Me” page can be a deciding factor as to whether or not someone wants to do business with you. This page should give some professional background on you and your team, as well as the history of your business. This vital information will make your customers and potential lenders feel more confident about doing business with you. Please bear in mind that having a website is not, and never will be, the sole deciding factor in whether or not you receive the financing you need. It is a lot more intricate than that.

3. Business Awareness – Being on the internet makes it easy for potential customers and lenders to learn about you. They can research your products and/or services without having to call you or meet you in person. Having a clear description of your business and how you operate is a necessary part of making your website both user-friendly and content rich.

4. Contact Options – Lenders and customers must have a way to contact you. When they have various ways of contacting you, it makes them feel more secure about doing business with you. Remember, the web site is not for you, although it is about you and your business. It is for those individuals who prefer to visit your web site prior to contacting you, or even for those who might just want to send you feedback about your products and/or services. You never know, they might have a customer referral for you during the hours your business is closed and want to get information over to you as soon as possible. Do not hesitate to make it easier for people to contact you online.

5. Levels the Playing Field – In today’s internet-savvy world, billions of people are online daily, and most businesses have a website. You might think your start-up or small business does not need one. You might want to check what your competitors are doing. Most likely, they will have a website. Potential lenders will look at your competitors’ websites to help them understand your industry, and to determine what makes your business different or better than your competitors.

If your internet presence needs improvement, start working on it now. If you had a website, but it is no longer up and running, get it back on track. I am not suggesting that having a web site will make you a ton of money or get you the financing you need, but it levels the playing field for you when others are conducting research prior to doing business with you. I am sure you would not want your competitors to be the only ones getting this type of online exposure. Having a online web presence is definitely an advantage in the competitive world of business today.

Growing Your Small Business with Non-Traditional Financing

By Karlene Sinclair-Robinson

Small business owners are always seeking ways to grow their business. Whether you are going after business-to-business (B2B) clients, business-to-government (B2G) contracting opportunities, or business-to-consumer customers (B2C), growing your business is the foremost thing on your mind.

It is all about growing your business to the next level and beyond. How you do this takes a multipronged approach. One such approach has to be diversification in how you operate your business and how your received payment for goods or services rendered. Understanding how diversification will play an important role whether you are going through survival or growth mode.

Getting a new contract or increasing business-to-consumer clientele will shift the dynamics of your company. It is important that you continuously work your business and marketing plans to fit your business model. If you do not work these plans, you can find yourself in jeopardy of failing.

Here are some questions to consider:

* Are you effectively working your business and marketing plans?
* Can your small business support an influx of new business?
* Do you have the staff to cover the increase in services and/or product delivery?
* Can your business maintain the growth potential over a sustained period of time?
* Are you financially set up for this great opportunity?
* Do you know how you will access working capital to maintain this growth period?
* If you are not financially sound, how will you finance this growth potential?

All of the questions listed above are vitally important, even if your small business is struggling to survive. If your business has taken a hit, such as low sales or tax issues, you seriously need to know your business financing options. You also need to know how to access these non-traditional financing, otherwise referred to as alternative financing, and when to do so. Remember, timing is an important factor in all that you do.

Accessing non-traditional financing is similar to accessing traditional or institutional financing with some variables. For example, how much time do you need to obtain funds, what are your decision-making options, and what changes need to be made to achieve desirable solutions for all parties are important things to consider.

The types of non-traditional financing vary in methodology from Micro Loans, Factoring, Equipment-Lease Financing, Asset-Based Lending, Purchase-Order Financing, and even Peer-to-Peer Lending. These options may be available to you depending on the type of financing best suited for your small business, and the actual source used to finance your business.

Growing any business can and will take a lot of work. Gaining access to the necessary resources your business needs, is important at all levels of operation. Having a mindset for success and thinking “Outside the Box” when needed, is vital to the survival or growth of your business.