Own A Small Business? Get Creative About Financing
Owning a small business is always a challenge, but especially when the economy is in a well documented downturn.
The Federal Reserve recently noted more banks are raising lending standards for small businesses, blaming tightening credit conditions on a less favorable economic outlook. The current credit crunch’s effect on small businesses across the country leaves many unsure where to turn for financing to expand, renovate or manage seasonal fluctuations. Where can small business owners go when the bank isn’t an option?
This was the situation New York restaurateur Arlene Weston found herself in when she decided it was time to build on her Jamaican heritage and open her own restaurant. Weston applied for several small business loans, but after facing a denial she emptied her savings account and borrowed money from her grandmother. She scraped together as much cash as possible and opened a small, two-room restaurant in New York’s trendy Chelsea neighborhood.
It didn’t take long for Weston’s restaurant to become a critically acclaimed talk of the town. The original restaurant only seated 40 people and Weston saw the opportunity to expand by adding a third room. Unfortunately, she’d already tapped out her personal financial resources and appeared too large a credit risk for a traditional small business bank loan.
Then Weston got creative. Her restaurant had always accepted credit cards from customers as a form of payment so she took advantage of something called a Merchant Cash Advance through a company called AdvanceMe.
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