Good News! More people are starting businesses now than before the economy tanked. Since traditional business lending is on the decline, borrowers and lenders are becoming more creative.
According to Paul Quintero, CEO of Accion East, a leading United States provider of $500 to $50,000 microloans, the company granted 19 percent more loans in 2011 than 2010. They lent $2.2 million more in 2011. Most small businesses borrow from $25,000 to $50,000 to launch their new enterprise.
Regardless of whether small business entrepreneurs obtain a revenue-based loan, short-term collateral-free loan or even a loan based on future credit card sales, borrowers and lenders are being creative.
Revenue-based financing (RBF) is repaid based on the monthly sales of the borrower. This would be a bit challenging for a startup until they had a track record of cash flow. Creative financing allows a business to launch; sometimes as an entrepreneur it is necessary to be creative and a bit daring. Be cautious about overextending your cash flow. Construct a well-thought-out business plan to know where you will obtain the money to keep the doors open and still repay the loan.
RBF can be an excellent alternative for business expansion. A business prime for expansion already has a predictable cash flow record. Lighter Capital, a Seattle based RBF lender, has increased from three investments per year totaling $250,000 to 13 loans totaling $1.5 million.
Collateral-free loans allow a startup small business more flexibility. As in any contract, read the small print terms carefully, but this can be an excellent source of cash to assist a seasonal business. Short-term collateral-free loans can provide the cash infusion to ramp up inventory before a busy season, take advantage of an outstanding marketing opportunity or expand a potentially lucrative new section of the business.
Merchant cash advances are particularly creative financing. Restaurants and businesses which process a particularly high volume of credit card transactions receive a lump sum cash infusion in exchange for a percentage of future credit and debit card sales. Factoring in the credit card processing fee charged to the merchant, this percentage could be as high as 30 percent.
All of these creative new financing ideas are alternatives to mainstream lending. Entrepreneurs are creative out-of-the-box thinkers. The creative entrepreneurial spirit founded America and continues to inspire and amaze.
Creativity in financing provides for creative in marketing
PrintPlace.com has opened the floodgates of marketing creativity. With the addition of the new brochure design templates, entrepreneurs can let their imagination go wild. Create a striking design which captures the essence of the business and highlights the strongest selling points. Create the brochure, test it with different colors and formats, and make small or large print runs. Finally it is easy to split test different designs to see which one drives the most traffic in the marketplace. Imagine professional designs without the professional cost.
Now that the financing challenges are solved, entrepreneurs can concentrate on the fun aspects of business – marketing and driving more customers to the business.
Marketing is creative and innovative. Now that the new brochure, postcard and business card design templates are launched, start creating. Keep watching as more designs will be coming. Keep checking back at PrintPlace.com to see what is new. PrintPlace.com hears the creative voice of the entrepreneur and responds.
More businesses are starting now than before the economy crashed. Entrepreneurs are creative. Design your business plan, secure your financing, and start putting your plan into action with impressive marketing. Ramp up now; hit the ground running as the economy starts to rebound.