Press release 1 business term loans turning to alternative sources
Business Term Loans turn to alternative funding sources
Published on: Mar 4, 2016
Transcripts - Press release 1 business term loans turning to alternative sources
Business Term Loans Turning to Alternative Sources
For Immediate Release
Many business owenrs are solwly waking up to what many other commerical enterprises have
discovered: It’s easier to pan for gold than to get a short term bank loan. It’s surprising that
small businesses are no longer the only ones seeking alternative funding sources to resupply their
business term loan services.
According to Bloomberg and Moody’s data, Sears Holdings Corp, Toys ‘R’ Us and Burger King
Worldwide have all reached out to acquire alternative sources to shore up their softening
But, the private sector is not the only one, either. School boards are using business term loans to
ensure that they can meet the needs of their schools’ budgets, until tax revenues are finally
dispersed or bond measures are approved for a vote. For example, one school board had to file
suit against all the residents of its district because they did not want to consider raising property
taxes sufficiently to cover expenses.
Does this indicate that the economy is worse than the GDP would have us assume? It’s too
early to tell. The choice of using alternative short term loan sources to fill gaps in anticipated
growth margins has more to do with the loan regulations placed on banks since the recession
began in 2008. There are now several methods of obtaining funding for 6 – 18 months than there
was just a few years ago.
Wesley Yuhn in a discussion group at a recent conference for financial advisors pointed out that
businesses are now able to sell part of their outstanding invoices to a factoring service as well as
using a merchant cash advance solution to solve temporary cash flow issues.
Loans are available for business that accept recurring credit card payments and based on the
businesses card receipts. The automobile industry, especially the pre-owned market, is using
alternative loans right now to tide them over during expected seasonal dips. This industry was hit
harder than most others on a national scale and is in the final cycle of recovery, if the economy
holds to its current growth rate.
In late September (9/23/2014), Forbes examined online funding sources for small business
capital replacement. According to their analysis, these online resources are expected to
fundamentally alter the way that small companies are able to acquire capital.
Rather than labelling these alternative options as predatory lenders which was the assessment of
more traditional lenders just two years ago, the Forbes article suggests that they are generating
more competition and providing better customer experiences than what the stodgy, smoke-filled
back room players continue to offer.
Financial gurus have long stated that a solid economy is dependent on small businesses being
able to operate at reasonable profit margins and that multinationals cannot hold up an economic
recovery unless small businesses soft sales become stronger.
Many alternative players are being underwritten by equity investors who see the benefit of
providing capital to small businesses as a means to increase the rate of the national economic