Banks have been closing their doors not only to individuals, but to small businesses also when it came down to lending activities. Due to inability to obtain financing in turning down economy many businesses were forced to close their doors forever. However, a great alternative to traditional small business lending was put into place, known as a business cash advance. Virtually any business, having a merchant account and accepting credit cards as a form of customer payment can gain access to cash quickly and hassle-free.
Amount Of Business Cash Advance Is Tied To Credit Card Sales
Business cash advances are loans partially secured by payments coming from credit card processing companies. The amount of advance a business can get depends on the average monthly volume of credit card transactions. When signing up for business cash advance service a business owner would have to switch credit card processing to a lender-approved vendor. The loan is repaid through daily draw of credit card transactions, typically ranging from 15% and up, depending on the loan amount and length.
Typical loan repayment terms are around 4-6 months. Once a positive payment track is established by a borrower such process may be repeated over and over again, with higher business cash advance amounts and more comfortable loan lengths. Such business loans are similar to signature loans, as the funds borrowed may be used for any purpose.
Business cash advances are commonly known as factoring – a purchase of future credit card transactions by a lender. While there is some guarantee presented by a past credit card transaction volume, lenders undertake quite a significant risk leading to higher interest rates. On average, business cash advances feature a 35% premium on top of the principal amount borrowed. However, with low level of lending transaction volume these days, a business cash advance may be the only borrowing tool available to small businesses.
Developing a successful business relationship is no easy task, there are many ups and downs during the process and so as a small business owner it is best to understand a few of the basic business partnership pros and cons so you can evaluate if this type of business activity is right for your venture. Partnerships can allow your company to enter new markets and reach customers faster, but they will also require you to give up certain controls over the product and customer experience depending on the roles your business takes with the partnership. Make sure the two businesses are compatible on several levels and that the executive management team has open and honest communication and the chance for success will improve allowing you to increase your revenue rather than spending resources needlessly.
Pros to Business Partnerships
Ï Access to clients – The number one reason most companies enter into a partnership with another business is the opportunity for new business. A good partner will be able to make introductions and get products / services in front of your target customers.
Ï Access to new markets – By partnering with a company in a different region or country a small business can rapidly grow across the country and expand internationally without having to set up physical offices and teams in every place around the world where there are willing customers.
Ï Co-marketing campaigns – Marketing can be expensive and sharing resources for co-branded marketing campaigns can really help distribute the funds available for marketing and allow a business to be more creative with how the business and products / services are marketed.
Cons to Business Partnerships
Ï Loss of brand – A partner will be sharing the branding and recognition a product or service receives in the market. Some larger companies will require small businesses to actually white label their products to them thus eliminating the brand altogether. Depending on the opportunity this may still be acceptable to the small business due to the exposure and amount of product that is being sold.
Ï Unsatisfactory customer service – If a partner is handling the servicing and interactions with the customer concerning your product, any issues that they may be faced create a chance for an unsatisfactory experience which reflects poorly on your business. Adequate training and occasional check-up blind tests will help you feel at ease that the business partner is executing the customer service to your desired level.
Ï Delayed payments – Business partnerships are likely to have revenue share agreements or performance based compensation included in the partnership. It is very important these payment processes are clearly defined and held to. A small business can get into financial trouble when shipping large orders and not receiving payments on time.
It’s a rough economy out there today, and everyone in business has felt the pinch. People are now more vigilant of their spending habits, and buyer confidence has fallen incredibly low. But even though the economy has become tough, it doesn’t mean that is has come to a complete stop. There are still consumers in the market, keeping opportunities open to capture their interest. This can be done by putting a personal touch in your marketing campaign.
is given out directly to target customers who are likely to be attracted to the products or services of your business. You can simply hand it out to provide people with your contact details. With just a little creativity, your business card will not only market your business, service or product, but also serve as an avenue to communicate your principles to your customers. For instance, you can do this by using a catchy tag line or phrase that highlights the professionalism of your business.
Definitely, a creative and personal touch in your business cards will draw people’s attention to your business, thus, requiring you to provide your card a good design. One of the important functions of a business card is to help customers to remember your business and your products and services. Although the standard business card is 3.5” X 2”, you can still use bigger or smaller cards depending on what looks best for your business and what will set you apart from your competitions. It is not unusual for business cards to use eye-catching designs or even eccentric shapes in order to catch attention in the market.
In addition to appealing and eye-catching business cards, one other thing these cards provide is a positive image. Giving out well crafted business cards can directly result in an increase in sales and profits. After all, marketing is the key to a successful business and the business card is your direct link to your customers. With an effective business card, you can be confident that your contact information and some details about your products and services are in the hands of your prospects. This will ensure that you get good market exposure, which is won’t likely be duplicated in any other form of marketing tool.
By documenting your business you communicate to your people exactly how your business operates and what work needs to be completed by Employees filling the Positions in your business.
It is vitally important to have your business documented if you are looking to sell your business or looking to secure external funding. Well written and maintained Business Systems and Documentation adds great value to your business and will contribute to you getting more money when selling or sourcing external funding.
Important information in your business needs to be recorded and communicated to your employees in a consistent way. This information should include.
– Strategic Objectives.
– Marketing Plan.
– Company Policies and Procedures.
– Position Contracts.
– Business Systems Documentation.
– Operations Manuals.
Only one version of information should be made available in your business. It is important to have only one version to ensure that all employees have access to the most up to date consistent information.
Access to critical documents should be controlled, Documents should be made available only to Employees who need to have access. You should use a tool that allows you to easily control access to information and allows you to track when changes have been made and who has made the changes.
Documents and Data should be maintained on a secure central server with a data backup and recovery plan in place.