96% of banks have reduced small business lending

Too Tight

96% of banks in the nation have increased or maintained already tight restrictions on small business loans. Loan officers are looking at merchants' personal credit scores, usually requiring at least a score of 700. They require collateral more often and of greater value. Banks are limiting the amount that they will lend out to a small business owner if approved and restricting how that money can be used. A relatively new form of funding, called a Merchant Cash Advance, is proving to be a better answer.

A Changing Economy

The tightened bank restrictions come at a poor time for small business owners and our economy. In past recessions it was the strength of the nation's small businesses that pulled the economy out of the slump. This recession has changed the way customers spend money and handle their shopping. Few small businesses are able to adapt to the new consumer habits because of a lack of funding, and the tightened bank restrictions are preventing merchants from getting credit to fund the changes. In fact, one of the main reasons business owners cited their venture didn't survive was because of no or poor funding.

Personal Assets – Not Enough

Many business owners have been trying to survive by using personal assets as collateral or personal pledges. The recession's effects are long reaching, though, and assets such as real estate, stocks, and other valuables have dropped in worth so it can be extremely difficult to gather enough collateral to procure a bank loan. Many assets that a bank can't immediately make a profit on, such as food, liquor, niche clothing, or property in a slow to sell area aren't likely to even be considered. With a Merchant Cash Advance, business owners can avoid the restrictions imposed by the lending industry because a Merchant Cash Advance isn't a loan.

Better Than a Loan

A Merchant Cash Advance from Fastpoint Financial is a better option for small business owners. There are fewer restrictions, a faster approval period with most merchants getting their cash in days, and a repayment method that is linked with how well the business is doing. With a small business loan a merchant has to pay an exact amount each month without regard to how the business is doing. With a Merchant Cash Advance a small percentage of credit and debit card transactions is automatically collected when the accounts are settled. Once the advance is paid off, which often happens in under a year, that's it. A Merchant Cash Advance is really simple and an ideal option in this economy.

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If this recession is to turn around, it needs to be because of the strength of the nation's small businesses. Without adequate funding, though, businesses will continue to falter because they can't adapt to changing consumer habits. A Merchant Cash Advance from Fastpoint Financial can help provide merchants with working capital and help them avoid the restrictions and hassles of a small business loan.