Start a Flea Market Business

So you just gotta have a storefront  business .

Why not start a flea market  business ?

Flea markets are entrepreneurial hotspots. You could most likely do some market research into what people want to buy and what they are buying at your local flea market.

Over 500,000 vendors sell from America’s 5,000 flea markets. There are 150,000,000 people who shop at flea markets annually.

Here are the reasons you may want to open your start a flea market  business  before starting a traditional  business , taking the plunge and signing a long term building lease.

a. Flea markets offer a low cost entry into  business 

Get your sales tax license and a county  business  license and you are virtually ready to go. You can rent a booth for a day, a weekend or by the month. If it doesn’t work out, you’re out of there without losing thousands.

b. Flea markets are great for part time entrepreneurs.

You may be holding down a part or full time job and need the income. No problem. Start a flea market  business  on the weekend or work the flea market daytime and work a job nighttime.

c. Flea markets are a great place to liquidate merchandise.

Let’s say you have a great source of slightly blemished goods at a cheap price. The flea market may be just the place to liquidate them.

d. The flea market may become your full time  business .

Many an entrepreneur decided to try something new and liked the flea market so well that they just stayed there and never move on to a storefront elsewhere.

e. Flea markets are great for niche marketers.

Let’s say you just want to sell something like pickles, handmade pretzels, dog collars, or a specialized clothing. It may be hard to build a storefront around a niche. With the flea market traffic that is already there it could work.

f. Start with virtually no advertising.

Just  business  cards and maybe flyers and you are ready to go. The flea market has already advertised so you have immediate traffic. Now just be friendly and engage the customers and let’s make some sales.

g. Start with very little capital.

Flea markets allow someone with just a trunkload of merchandise to get started. I have a good friend who went to prison due to a partnership dispute. When he reentered society he had next to nothing. With a small purchase of liquidated goods he was able to build larger every week with his profits. Today he has a large flea market  business  and also wholesales to other dealers.

h. Give yourself a plan B.

Start a flea market  Business .

I have a relative whose wife has a good job and expects a good retirement. In today’s market, even her government job is at risk. She started her own jewelry  business  as a hedge against a possible layoff. She works flea markets, small shows and eBay to build her  business , which was started with minimal outlay of funds.

i. Start with minimal  business  fixtures.

Usually just a table, a couple chairs and possibly some display racks and you have all you need to display your goods at the flea market. You can continue to improve things as you build your  business  from week to week.

j. A good add on for the Home  Business  Entrepreneur.

Some of us don’t like to be tied down to a regular work week. Most flea markets offer all kinds of different  business  models. Some are only open weekends and others offer the option to have a storefront open a full work week. Some entrepreneurs like to have their schedule flexible. This is harder to do in a traditional brick and mortar  business  without hiring employees.

So what do you do to get ready?

First, visit the flea market you may want to sell at.

Talk to the vendors. Check out the traffic. Check out the cost of a booth. Some flea markets are online and you can do much of your research ahead of time.

Get your licenses. If you’re not sure what you need ask some of the vendors at the market. They will know, as most of them will have the licenses.

Get your tables, chairs, merchandise, price labels, snacks, cooler for drinks and so on ready ahead of time. Get some ones, fives and change. You can use a cash bag, a nail belt, fanny pack or a cash register to keep a control on the cash.

Get a good nights sleep and get to the flea market early to set up. That way you’ll have time to make a quick run back if you forgot something or have a snag setting up.

Good luck as you Start a Flea Market  Business .

5 Small Business Ideas for Big Business Profits

Just because you have a small business, it doesn’t mean you can’t think BIG! Some of the best marketing ideas come from the minds of small business owners. It is their ingenuity that allows people to reap big rewards even on small investments.

Below are 5 small business ideas you can begin implementing today in your own business to increase your customers and overall bottom line.

  1. Create your own contest – Market research has shown that contests work. Whether it be your 10,000th customer, a quiz that you send all of your clients, or having folks simply fill out a slip of paper, you can instill excitement in your business with a well run contest. Offering prizes such as big screen tv’s, ipods, computers and the like will definitely get folks talking about your business. Take pictures of the winners and post them everywhere!
  2. Offer discounts/deals in exchange for a customer’s email address – Email addresses are valuable. Your job is to build a huge list of them and stay in touch with your customers via a regular email newsletter! The easiest way to build a list is to offer the other person something in return. A discount off their next purchase is a great incentive. Start building your email list today and by offering a discount off of a future purchase, building a huge email list will cost you nothing upfront and depending on your profit margin, may actually make you money at the same time!
  3. Issue a press release whenever you can! – You might think nothing you have to say is press worthy but nothing could be further from the truth. Promoting an employee, sponsoring an organization, a huge sale, and a contest like the one mentioned above are all great reasons to create a submit a press release. Even though you may not get a front page story, your press release will help you in other ways. You can use the release in your own email and online marketing AND, when submitted to the right press release sites online, your business can get a boost in the search engine rankings as a result.
  4. Get video and written testimonials NOW! – In the age of the internet, utilizing video is one of the great small business ideas that can really reap huge benefits. Simply grab a flip cam (or your smart phone) and video tape your clients saying something nice about you and your business. Post this video on your website and build a huge list of them! Let your clients get new clients for you! If a video is not possible, a written or emailed message is the next best thing. Keep every single one you get and show them to the world!
  5. Own Google – No, I am not talking about ponying up a few billion and buying the mega search site, I am talking about owning the search results for your particular business or area. For instance, if you own a pet shop in Pittsburgh, Pa, then if someone types “Pet shop in Pittsburgh” you want to be one of the first results that comes up. This is easier said than done, but taking some time to learn about Search Engine Optimization, or SEO will help you get closer to achieving this goal. There are many things you can do that cost little or nothing to help your website rank higher with sites like Google.

There you have it, 5 small business ideas that if implemented properly and consistently will definitely increase your new clients and profits.

Business Hubs: Your Business Information Center

Those who want to harness the power of the Internet for growing their business; a business hub is where they will find a variety of resources as well as marketing tips and strategies. The Internet has changed the way businesses operate and reach customers. Businesses have to match their strategies to this new arena. Most traditional marketing methods will not work online, so they have to learn new marketing strategies for increasing their online presence.

There are plenty of Internet marketing methods-some are niche-specific, while some work across different industries. Marketing online is relatively more affordable than traditional advertising. When approached the right way, they can give your company the boost it needs. But where is the best place to go to learn those marketing strategies?

A business hub, which also known as web hub or vertical portal, is a website dedicated to providing content, information, and services to businesses within a particular industry such as health care and IT. While some serve as meeting ground for businesses and customers, it tends to focus more on the needs of businesses than industry customers.

As a business-to-business website, a business hub can serve as your gateway to essential information on how to grow your business. They typically cover information specific to a niche, but they may also include general marketing information (e.g. Facebook marketing, article marketing). Some also offer industry analysis or business design. Here are some of the most common business marketing strategies covered by business hubs.

  • Article marketing.Article marketing is a method of promoting a business or company by publishing keyword-optimized articles in web directories. When properly done, it is an effective tool for reaching broad audience and showing them your expertise.
  • Cloud Marketing.This is the collection of different Internet-based marketing services, allowing marketing functions to operate more efficient and effectively.
  • Consumer Generated Marketing.This is a marketing method that directly involves participation of audience in marketing products or other activities of business.
  • Facebook Marketing.This looks at Facebook as a platform for marketing one’s business and reaching audience.

Summary of Benefits Business hubs share 3 common aspects:

  1. Marketing resource.Business hubs are great source of information on how a company or business can thrive online. It gives you quick access to different marketing strategies and other relevant information-tools you need to stand ahead of the pack.
  2. Niche-specific information resource.Because it caters to niche markets, you don’t have to sort through millions of web pages to find the information most relevant to your industry. If you’re new to online business and don’t know where to start or what direction to take next, you may find the answers in a business hub.
  3. It serves as a directory of different businesses in the industry. Most keep a listing of companies offering industry-specific services. All in all, business hubs function as a reference center for people who want the ins and outs of an industry in particular and the world of Internet-based business in general.

6 Ways to Finance Your Small Business

Finding money can be one of the biggest hurdles for a small business owner. Whether you desire to open a chain of restaurants or an Internet-only business, capital is required to fund your dreams. Here we will explore the different types of funding available to you:

Debt financing includes any money you will pay back. It does not require you to give up equity in your company and can be a good choice for entrepreneurs who have not been able to attract the attention of investors. This type of financing usually requires personal collateral and will require you to pay interest.

  • Loans – Loans are available from a variety of sources, including local banks, the Small Business Administration and non-profits. Requirements vary, but they are usually credit-based and will require you to pay interest. Some economic development organization microloans may take into account character as well.

Equity financing requires you to give up a portion of your ownership to investors in exchange for their money.

  • Friends and Family – For most business owners, this is the first stop when looking for funding. Your friends and family members know your character, and the process to get money is usually much shorter than other methods. Even better, most will not request a stake in your business in exchange for funding. Even though you know these lenders personally, make sure you get all agreements in writing.
  • Angel Investors – These are high-worth individuals or groups of people who exchange their industry expertise for a portion of your company’s equity. These investors can be hard to find, and some only focus on certain sectors. An Internet search may uncover the angel investors in your industry.
  • Venture Capitalists – These companies are usually interested in established companies or start-ups that will quickly be poised for sale or public offering. There are usually high standards for receiving this type of funding, and you must be willing to give up a portion of your control.

Other types of funding:

  • Business Plan Competitions – Many are run by local business schools and require you to partner with at least one student to enter the competition. Winning could mean networking opportunities, funding and ongoing support.
  • Government Grants – Though it is a popular belief that the federal government provides small business grants, money that you do not have to pay back, it is not entirely true. Most grants go to local non-profits that help start-ups rather than the businesses themselves. Some states do, however, provide grants for special industries, such as technology and “green” sectors. Check your state’s requirements for more information.

As you can see, there are a variety of ways to get financing for your start-up. An accountant or financial manager can help you decide which type of funding would be best for you. For more information on business financing, including sample promissory notes that can be used for family and friend loans, visit SCORE:

This article, by Dequiana Brooks, was originally published in Gemini Magazine.

Business Plan Basics #2

A business plan serves as your personal playbook for your own business. This written document serves to identify your goals and lay out your method of attack for achieving each one. Writing a business plan is essential to the success of any size of business, from major corporation to budding entrepreneurship. Many successful businessmen and women can relate first hand to the importance and necessity of developing and writing this essential document. Regardless of your level of expertise in the realm of business, do not be tempted to skip this important step in the development process. You would not think of beginning a road trip without a map, so why leap into a business without a proper plan?

The old adage states: “Individuals who fly by the seat of their pants often end up with ripped pants.” That saying could not be more applicable that in the entrepreneurial world. Regardless if you are striving to develop a multi million dollar corporation or a modest home based business to provide an extra source of income, you will find writing a business plan will aid you tremendously in addressing and accomplishing your goals. When it comes to the basics of this plan, start from the beginning. Consider writing the history of your fledgling business and be sure to include the reason why you felt compelled to enter the world of entrepreneurship. Usually, individuals leave their present jobs to work for themselves due to office politics, dislike of employers or coworkers, or unfair office standards. Whatever prompted you to start your own business should be included in your plan.

A major part of any business plan is the statement of purpose. Why did you form this company? What products or services do you offer to clients and why should they be interested in them? These questions are quite important when laying the footwork for your fledgling operation. If you find yourself unable to answer these questions, consider doing research into your goal and the potential clients in your area. Look to other businesses offering similar goods or services in your area. You may not have the advertising resources or long standing reputation to compete with these companies, so consider choosing an alternative route that will lead you to the same goal.

Money is a huge part of your business plan. Finding what source of finances that will provide funds for starting costs and pay other necessary bills is essential to the success of your business. Use this opportunity to carefully examine your usable funds and determine who will provide the money for start up costs. Usually, the topic of finance is uncomfortable, but take the time to clearly address any issues with logical, rational thinking. If you need to speak with banking representatives to apply for financial loans, take the time to do so before you write your plan. Upon writing your business plan, you should be able to account for every penny of money that has been spent or is planning to be spent on business related purchases.

Using these business planning basics will allow entrepreneurs of all skill levels to quickly and easily develop the ins and outs of the developing company. Once your business is “born” on paper, it is more likely to succeed in the real world.

Where Are The Customers For Your Internet Business?

When you start an internet business, no matter what you’re selling, you have to know exactly who you are selling to. Choosing and finding the right customers can be the difference between success and failure.

In the end, if there are not any customers who are willing to pay for what you are supplying, then no amount of marketing skill, budget or persuading is going to make people buy it. So what type of customers are out there and which are best for your internet business?

Business To Business

If your internet business sells products or services to other companies and organizations that can lead to great success. Companies and organisations are likely to have a set budget to buy products or services that will improve their overall performance, increase sales or save time. If they like what you deliver, it can lead to a long-term partnership between your business and theirs. This can provide a constant inflow of revenue without having to rely on continuously making sales from new customers.

Business To Individuals

The majority of small internet businesses sell to individuals. We all use various products and services for different reasons. You can very easily be segment your audience into niche markets that can be targeted by your internet business. Despite the fact that this is a much larger market than the business to business market, the products bought by individuals are generally a lot less than a business will buy. Also, the fluctuations of the economic climate can have a more noticeable effect on your overall income.

Evaluating The Size Of The Market

You have to take into consideration the number of prospective customers that are out there for your products. If your internet business is trying to sell a product that will only appeal to a small target audience, then it may not be a worthwhile. On the other hand, you don’t want to go for an audience that is too broad as the competition will be too great.

Testing The Market

The beauty of an internet business is that you can quickly determine what your target audience are looking for. It can be as easy as checking out online forums or social media webpages. On these websites, people can frequently be found complaining about things that make their lives challenging. This can give a clue as to possible services or products that your internet business can offer that will resolve a problem for your prospective customers or make their lives much easier.

What is Business T1?

 Business  T1 on the Go

The T1-carrier or also known as the  Business  T1, traditionally uses copper wires for both voice voice and data transfers. But nowadays, a lot have been using fiber optics for the said line for higher bandwidth purposes. What has made  business  T1 more advantageous than other  business  line connection is it can transmit more voice and data compared with the others.

Basically,  business  T1 can operate both voice and data transmission with a high speed rate of 1.544 megabits per second. At the most, it can carry 24 digital channels to operate the said transmissions. Many  businesses  have opted for  business  T1 because of the speed and reliability that it can offer them. To be specific, it is 60 times faster compared with your DSL or analog modems. The said  business  T1 line has been known to be cost effective as well because you can combine both telephone and Internet service at the same time to less the expenditures with separately having to pay for both of these services. This  business  T1 line is called the Integrated T1. On the other hand, common  businesses  which opted for this line are can centers or telemarketing companies, telephone companies and the like.

The good news to everyone is that the costs for  business  T1 have become cheaper since demands for utilizing the said line consistently increased. There are even leased T1 lines available now given by certain Internet Service Carriers (ISPs). If you want to have a higher bandwidth compared with what T1 can offer you and if you are working on a large corporation, company, or  business , T3 can be your choice. With this higher version of T1, you can have 44. 736 mbps for the speed rate.

Talking about reliability, this has been what  businesses  currently looks for in an Internet connection that is why T1 is their choice. This is only to save themselves from the idle moments they can possibly experience with an inconsistent connection during their operation hours. Because of this reason, there are event T1 providers out there which offer uptime guarantees so that  businesses  will opt for them as their providers for  business  T1.

If you want to have a good  business  T1 provider for your  business , select a broker which can help you choose the best.

Fractional T1 for Small  Businesses 

One of the most famous Internet and telephone connections for  businesses  is the T1 line connection. This is what most of them choose since it is highly reliable and very fast when it comes to its bandwidth. Though every  business  knows that it is costly, they still opt to use this one since it is cost-effective at the same time. However, this is only the case for medium to large scaled  businesses . For small  businesses , the case is different. They do not opt for the full T1 type for their  business . Instead, they choose for a different type of  business  T1 which is suitable for them. This type is what they know as Fractional T1.

Basing from its name, Fractional T1 has only a fraction of what the full T1 type can offer. However, this does not mean that your  business  will suffer slower or less reliable line connection. Even though only a fraction of the full T1 is being used for this type, still, the fastness and reliability you can get from the full one is also the same with the fractional one.

Basically, 24 channels are being utilized in a full T1 line connection. With Fractional T1, only a few selected channels will be utilized since a small  business  would not require all the channels to be utilized. One of the reasons why small  businesses  still opt for this T1 despite its not-so demanding needs is because they still want to experience the reliability and the pace a T1 can offer.

With regards to the costs of having Fractional T1 for your  business , it is expected that since only a fraction of the full T1 is being used, only a fraction of the costs of the full one will be charged to use. Technically, providers may only charge you on a channel-to-channel basis which means you only have to pay for the channels you are only using for this type.

You also do not have to worry the connection between your Internet and telephone lines with Fractional T1. The connection you have for full type T1 to the Internet Service Provider is also the same with the fractional type. So if you have a small  business  and you still want to avail of the  business  T1 experience, Fractional T1 is ideal for you.

Promoting your  Business  Using  Business  T1

 Business  T1 is what every  business  across the globe is looking for. With its high speed rate of 1.544 megabits per second and not to mention the reliability you will benefit for this line, it is no wonder why it is still your  business  choice despite the wide array of choices for Internet and telephone line connections available at the present. Aside from this, how can you promote your  business  by means of using  business  T1?

As most of you already do know, having  business  T1 as you  business  line connection means you have your own connection and that you do not have to share this with other  businesses . Aside from this, there is a constant access with the Internet connection with minimal lagging if ever you will encounter this one. If your  business  has an official website to manage and maintain, absolutely  business  T1 is the right one for you.

Basically, you are allowed to download and upload files for your  business  or website simultaneously. This also means that the given bandwidth speed of T1 will not be affected even if you do both of these. Aside from this, the said speed will not also be affected despite the fact that more than 10 of your employees are using the connection all at the same time. Moreover, if your  business  has a multiple number of branches, you can also share information or files to your other employees and customers located in your different  business  branches. In this manner, you do not have to meet them personally to process your  business  with your customers as well as with your other employees.

Another advantageous thing about  business  T1 is you can have a package deal with your T1 provider with regards to the fax, phone and email operations needed by your  business . There are providers which offer this kind of package deal. To avail of this deal, then you should be able to find a provider which is capable of doing so.

Further, in choosing the right provider in your  business  promotion, do not only dwell in what it verbally tells you about the services it can offer to you. You must be able to analyze the contract well and be sure that the said  business  T1 provider is typically for your  business . In this manner, there will be no problems occurring when it comes to the promoting of your  business .

Updates for  Business  T1 for Your  Business 

Updates are inevitable for every kind of technology that exists. One of these technologies is the T1 technology available for your  business . Since it is a very famous choice for Internet and telephone line connections,  businesses  should be vigilant of the T1 technology updates to have more knowledge regarding the said technology. In this manner, you will also identify whether there are certain technicalities which you can apply for the growing needs of your  business .

There are a lot of recent updates for  business  T1. One of these updates is the collocation bandwidth which is already applicable for the said line connection. Basically, having a collocation in your  business  will help you locate the servers you need in a collocation facility. Also, aside from this, you have an assurance that your T1 line connection for your  business  will spend less money for the bandwidth speed of your said connection.

Another information update for  business  T1 is that the difference between T1 and DS1 is determined. Every  business  must has known that they are somewhat the same. In reality, they are both the same, generally speaking. However, there is a thin line that separates them from each other. Basically, T1 is a single line which uses copper wires or fiber optics for the voice and data transmissions it offers. On the other hand, DS1 refers to the service your T1 line can provide to your  business .

Moreover, for your information, you can actually share the costs you have to pay for your bandwidth speed with T1. How can this happen? If your  business  is located in a building with other  businesses  residing in it, just ask permission from them to share your T1 connection to them for the benefits they can also received. Aside from this, you can also share your T1 connection if you are located in a  business  park. In this manner, you do not have to pay a quite large amount of money for your T1 bandwidth connection.

These are some of the updates which can add-up to the knowledge you already have for  business  T1 technology. These will certainly help you determine if it is helpful for the growing needs of your  business  as well.

Call For Small Business Owners Who Want To Improve Profits By Online Business

I recently read a statistic that said only 20% of small business owners have a local presence online. But even if we also noticed a big change in the world of advertising where companies are beginning to recognize that any number of old conventional ways of marketing their businesses have become increasingly less effective.

Small businesses today is not as if it were 10 or 15 years. Business owners and managers should be more creative in where they promote their business. They need to see big business and imitate what is more successful, they also set and achieve higher goals.

A good example of this is cinema, which often now see new movies are released that are advertised on Web sites like YouTube and MySpace, where large and small entrepreneurs can not be both the level of play much more than they could ever recover.

It was not long ago that the producer of the film small businesses create a well-known movie called Borat has been characterized mostly online. This film has achieved great popularity continued to go to another movie called Bruno, who started mostly by using a combination of web marketing and TV commercials.

This gives small business owners, a large amount of valuable agreement.

However, approximately 80% of future activity in the rest of home entrepreneurs, entrepreneurs of small businesses and even larger organizations that are not active on the Internet advertising and marketing their businesses, particularly, it is conceivable that are increasing their presence on the web are doomed to fall far behind their competitors.

Every time I come, I see a little additional business, which generally seems to sprout almost line from scratch and it makes me laugh a little each time. It is good to find people who for whatever reason have a light bulb in their head telling them…. there is no better time than now to decide things in new directions, helping other small businesses to achieve the most successful developers.

This just leaves us all to speculate on the remaining groups of small businesses, who are still spending $ 800, $ 1,600, or perhaps more to be able to build a brochure, send mailers to the event is not directed at market places, or leave the radio without thinking, hoping that their potential buyers are attentive to the real thing, when you play in the advertising channel.

Then there is the small business operator, however I feel it is a wise decision to publish community newspapers with a plug in your industry. With many jobs about 3 nights a week and is now looking to give their people a lot more advertising online is not difficult to see that maybe these people understand the trend.

Small business owners are advised is very important.

If you or someone you know has a small business and it is not already being promoted through the network if there is a site that has been created to address the issues necessary for your customers, and if you do not have is there to help customers who want and need to get exactly what you have to make people today when they need it, they will choose another location.

Want to know more or have a story that could help others? Please share by posting your comments below. You can only change someone’s life for the better.

How to Get Financing For Your Small Business

In today’s hostile economic environment, access to capital is the primary differentiating factor between those businesses which have been able to expand and gain market share versus those that have experienced enormous drops in revenue. The reason many small businesses have seen their sales and cash flow drop dramatically, many to the point of closing their doors, while many large U.S. corporations have managed to increase sales, open new retail operations, and grow earnings per share is that a small business almost always relies exclusively on traditional commercial bank financing, such as SBA loans and unsecured lines of credit, while large publicly traded corporations have access to the public markets, such as the stock market or bond market, for access to capital.

Prior to the onset of the financial crises of 2008 and the ensuing Great Recession, many of the largest U.S. commercial banks were engaging in an easy money policy and openly lending to small businesses, whose owners had good credit scores and some industry experience. Many of these business loans consisted of unsecured commercial lines of credit and installment loans that required no collateral. These loans were almost always exclusively backed by a personal guaranty from the business owner. This is why good personal credit was all that was required to virtually guarantee a business loan approval.

During this period, thousands of small business owners used these business loans and lines of credit to access the capital they needed to fund working capital needs that included payroll expenses, equipment purchases, maintenance, repairs, marketing, tax obligations, and expansion opportunities. Easy access to these capital resources allowed many small businesses to flourish and to manage cash flow needs as they arose. Yet, many business owners grew overly optimistic and many made aggressive growth forecasts and took on increasingly risky bets.

As a result, many ambitious business owners began to expand their business operations and borrowed heavily from small business loans and lines of credit, with the anticipation of being able to pay back these heavy debt loads through future growth and increased profits. As long as banks maintained this ‘easy money’ policy, asset values continued to rise, consumers continued to spend, and business owners continued to expand through the use of increased leverage. But, eventually, this party, would come to an abrupt ending.

When the financial crisis of 2008 began with the sudden collapse of Lehman Brothers, one of the oldest and most renowned banking institutions on Wall Street, a financial panic and contagion spread throughout the credit markets. The ensuing freeze of the credit markets caused the gears of the U.S. financial system to come to a grinding halt. Banks stopped lending overnight and the sudden lack of easy money which had caused asset values, especially home prices, to increase in recent years, now cause those very same asset values to plummet. As asset values imploded, commercial bank balance sheets deteriorated and stock prices collapsed. The days of easy money had ended. The party was officially over.

In the aftermath of the financial crisis, the Great Recession that followed created a vacuum in the capital markets. The very same commercial banks that had freely and easily lent money to small businesses and small business owners, now suffered from a lack of capital on their balance sheets – one that threatened their very own existence. Almost overnight, many commercial banks closed off further access to business lines of credit and called due the outstanding balances on business loans. Small businesses, which relied on the working capital from these business lines of credit, could no longer meet their cash flow needs and debt obligations. Unable to cope with a sudden and dramatic drop in sales and revenue, many small businesses failed.

Since many of these same small businesses were responsible for having created millions of jobs, every time one of these enterprises failed the unemployment rate increased. As the financial crisis deepened, commercial banks went into a tailspin that eventually threatened the collapse of the entire financial system. Although Congress and Federal Reserve Bank led a tax payer funded bailout of the entire banking system, the damage had been done. Hundreds of billions of dollars were injected into the banking system to prop up the balance sheets of what were effectively defunct institutions. Yet, during this process, no provision was ever made that required these banks to loan money out to consumers or private businesses.

Instead of using a portion of these taxpayer funds to support small businesses and avert unnecessary business failures and increased unemployment, commercial banks chose to continue to deny access to capital to thousands of small businesses and small business owners. Even after receiving a historic taxpayer funded bailout, the commercial banks embraced an ‘every man for himself’ attitude and continue to cut off access to business lines of credit and commercial loans, regardless of the credit history or timely payments on such lines and loans. Small business bankruptcies skyrocketed and high unemployment persisted.

During this same period, when small businesses were being choked into non-existence, as a result of the lack of capital which was created by commercial banks, large publicly-traded corporations managed to survive and even grow their businesses. They were mainly able to do so by issuing debt, through the bond markets, or raising equity, by issuing shares through the equity markets. While large public companies were raising hundreds of millions of dollars in fresh capital, thousands of small businesses were being put under by banks that closed off existing commercial lines of credit and refused to issue new small business loans.

Even now, in mid 2012, more than four years since the onset of the financial crisis, the vast majority of small businesses have no means of access to capital. Commercial banks continue to refuse to lend on an unsecured basis to almost all small businesses. To even have a minute chance of being approved for a small business loan or business line of credit, a small business must possess tangible collateral that a bank could easily sell for an amount equal to the value of the business loan or line of credit. Any small business without collateral has virtually no chance at attaining a loan approval, even through the SBA, without significant collateral such as equipment or inventory.

When a small business cannot demonstrate collateral to provide security for the small business loan, the commercial bank will ask for the small business owner to secure the loan with his or her own personal assets or equity, such as equity in a house or cash in a checking, savings, or retirement account, such as a 401k or IRA. This latter situation places the personal assets of the owner at risk in the event of a small business failure. Additionally, virtually all small business loans will require the business owner to have excellent personal credit and FICO scores, as well as require a personal guaranty. Finally, multiple years of financial statements, including tax returns for the business, demonstrated sustained profitability will be required in just about every small business loan application.

A failure or lack of ability to provide any of these stringent requirements will often result in an immediate denial in the application for almost all small business loans or commercial lines of credit. In many instances, denials for business loans are being issued to applicants which have provided each of these requirements. Therefore, being able to qualify with good personal credit, collateral, and strong financial statements and tax returns still does not guarantee approval of a business loan request in the post financial crisis economic climate. Access to capital for small businesses and small business owners is more difficult than ever.

As a result of this persistent capital vacuum, small businesses and small business owners have begun to seek out alternative sources of business capital and business loans. Many small business owners seeking cash flow for existing business operations or funds to finance expansion have discovered alternative business financing through the use of merchant credit card cash advance loans and small business installment loans offered by private investors. These merchant cash advance loans offer significant advantages to small businesses and small business owners when compared to traditional commercial bank loans.

Merchant cash advance loans, sometimes referred to as factoring loans, are based on the amount of average credit card volume a merchant or retail outlet, processes over a three to six month period. Any merchant or retail operator that accepts credit cards as payment from customers, including Visa, MasterCard, American Express, or Discover, is virtually guaranteed an approval for a merchant credit card advance. The total amount of cash advance that a merchant qualifies for is determined by this three to six month average and the funds are generally deposited in the business checking account of the small business within a seven to ten day period from the time of approval.

A set repayment amount is fixed and the repayment of the cash advance plus interest is predetermined at the time the advance is approved by the lender. For instance, if a merchant or retailer processes approximately $1,000 per day in credit cards from its customers, the monthly average of total credit cards processed equals $30,000. If the merchant qualifies for $30,000 for a cash advance and the factoring rate is 1.20, the total that would need to be repaid is $30,000 – plus 20% of $30,000 which equals $6,000 – for a total repayment amount of $36,000. Therefore, the merchant would receive a lump sum of $30,000 cash, deposited in the business checking account, and a total of $36,000 would need to be repaid.

The repayment is made by automatically deducting a pre-determined amount of each of the merchant’s daily future credit card sales – usually at a rate of 20% of total daily credit cards processed. Thus, the merchant does not have to write checks or send payments. The fixed percent is simply deducted from future credit sales until the total sum due of $36,000 is paid off. The advantage to this type of financing versus a commercial bank loan is that a merchant cash advance is not reported on the personal credit report of the business owner. This effectively separates the personal financial affairs of the small business owner from the financial affairs of the small business entity.

A second advantage to a merchant credit card cash advance is that an approval does not require a personal guaranty from the business owner. If the business is unable to repay the merchant cash advance loan in full, the business owner is not held personally responsible and cannot be forced to post personal collateral as security for the merchant advance. The owner removes the financial consequences that often accompany a commercial bank business loan that requires a personal guaranty and often forces business owners into personal bankruptcy in the even that their business venture fails and cannot repay the outstanding loan balance.

A third, and distinct advantage, is that a merchant credit card cash advance loan does not require any collateral as additional security for the loan. The future credit card receivables are the security for the cash advance repayment, thus no additional collateral requirements exist. Since the majority of small businesses do not have physical equipment or inventory that can be posted as collateral for a traditional bank loan, this type of financing is a phenomenal alternative for thousands of retail businesses, merchants, sole proprietorships, and online stores seeking access to capital. Such businesses would be denied automatically for a traditional business loan simply because of the lack of collateral to serve as added security for the bank or lender.

Finally, a merchant credit card advance loan approval does not depend upon the strong or perfect personal credit of the business owner. In fact, the business owner’s personal credit can be quite poor and have a low FICO score, and this will not disqualify the business from being approved for the cash advance. The business owner’s personal credit is usually checked only for the purpose of helping to determine that factoring rate at which the total loan repayment will be made. However, even a business owner with a recently discharged personal bankruptcy can qualify for a merchant credit card cash advance loan.

Since the cash funds being lent on merchant credit card advances is provided by a network of private investors, these lenders are not regulated or affected by the new capital requirements that have placed a constraint on the commercial banking industry. The merchant cash advance approvals are determined by internal underwriting guidelines developed by the private lenders in the network. Each loan application is reviewed and processed on a case-by-case basis and approvals are issued within 24 to 48 hours from receipt of a complete application, including the previous three to six months of merchant credit statements.

The merchant credit card advance industry is growing at a pace that is exponential as it fills a void once occupied by commercial banks. Merchant advance loans are the industry of the future in small business lending and private lenders and business owners alike are flocking to this still virtually unknown market. For more information on merchant credit card advance loans and business installment loans, go to

Online Small Business Banking

In the digital age every bank has an online presence, from my little credit union to the big national players. However, not all banks are geared toward serving small business via the internet and, while they all offer you a lot of promises and maybe a flashy new toaster oven, not all of them offer you the services that you need at a competitive price. Here’s what to look for and how to spot those that offer online small business banking from the poseurs.

Customer Service and Big vs. Small Banks

One thing that you may read is how important it is to “cultivate relationships” with your banker and how important your banker is in expediting and even deciding whether or not you get a loan. While this may still be true in the smaller banks, in larger regional or national banks you will never, ever meets the person who approves your loan. A buddy of mine who was a big shot at a major bank before ditching it all to go into the Peace Corps said that the big banks create a strong separation from the banker that you meet, who is basically a sales person, and the person who decides, who is basically an accountant. So skip bribing your banker with chocolate truffles or bottles of bourbon. In fact, if you already bought the “gifts,” just send them here and I’ll gladly dispose of them for you for free!

Similarly, once the recommendation for business people was to keep all their banking with one bank, in order to build up a relationship of trust with that bank. Now, however, the idea of relationship is breaking down and, thanks to the internet and the relative ease of online banking, small businesses can cherry pick the best services off a smorgasbord of banks just like the Bigs do. In fact, the biggest reason that I can see of deliberately keeping all services with a single bank is not having to remember more than one sign-on, password, and pin!

What Your Bank Should Be Able to Do for You

Business Checking Account

One of the essential elements of running your own business is treating it as a separate entity distinct from your own personal affairs or the affairs of your other businesses or investments. Failing to treat your business as a separate entity opens up numerous potential legal and tax consequences that could end up being very costly or even financially disastrous to you. Opening up a business banking account is one essential act that helps establish your business as a separate entity. For most business the key to the checking account is functionality, forget interest rates and a few dollars difference in cost. The key questions are:

  • Can you use the web site to pay pre-pay bills, transfer money, accept online payments and whatever other essential services that your business might need?
  • Are you able to easily download information from the online site to QuickBooks Online or whatever other accounting software that you might be using?
  • Do they have the highest level of online security that is convenient for you?
  • Are they relatively light on “hidden fees” that $5 and $10 you to death just to be able to perform regular, essential operations of your business?


Small businesses run by new entrepreneurs often have lower standards of security and this is especially true when it comes to banking and banking online. The smalls just don’t have the expertise nor the payrolls stuffed with I.T. professionals to keep up with the Trojans and frauds that cyber-criminals use to prey upon the unfortunate, and the unwary. You want the highest level of security possible but without making it so inconvenient on yourself that you aren’t fully able to take advantage of the online services. For example, while I was a Peace Corps Volunteer in Guatemala I often had to do my banking from internet cafes, and not always with my laptop that was impractical to lug around. When Chase, my original bank, changed the security so that I had to go through a complicated and time-consuming process every time I tried to access my account from a different computer I had to change banks (rather, I added a new bank) because that just wasn’t doable for me.

Loans and Lines of Credit

Loans are a prime area of shopping around and using the power of the internet to shave a fraction of a point off the interest rate. However, if you can’t pay the loan through an electronic transaction between the bank of your checking account and the bank that services the loan and make that payment for free then who cares about a little reduction of the interest rate. I like to look around for the best deal and then ask my primary bank if they can match it, just to keep my life as simple as possible.

Credit Cards

One of the easiest ways to make payments these days is by credit card and you will want at least one that is exclusively used for business purposes. There is no “best” credit card for small business and usually your bank will be able to provide you one. Keep in mind that you want one that is easy to set up and maintain electronically, that is widely accepted (especially if you travel for business), and has a high enough limit for what you need. Remember that building up credit for your business is just like building up credit personally, the better your history the higher your limit will be.

In Conclusion

Starting up a small business can be intimidating and the days when you could have a banker hold your hand and guide you through the process are long gone. The flip side of that is the incredible amount of information available to you at your fingertips. Another advantage is that you are no longer geographically limited, a world of banks is waiting to serve you! Just remember to keep in mind the services that you need, those that you don’t need, and those that you need but could be found at another bank for a better price. Happy banking!