| By :
Kristin Gabriel
Banks usually make money by issuing loans to small businesses, and even though they are seeking more, today, thanks to the economy, there aren't many viable borrowers. And on top of that, the banks are now being criticized by the federal government for not lending to enough. Banks usually have the cash to make loans, but research says that most loan officers are saying most applications fail. A loan application typically falls into two categories, 1) business expansion, and 2) helping a business stay afloat. Business employment growth has been negative since around April of 2007. As the Market continues to be elusive, the overall consumer confidence is at an 11-month low, according to a study by the National Federation of Independent Business - NFIB. Small businesses employ about half of Americans, accounting for 60 percent of new jobs. The majority of businesses are trying to reduce their debt levels, so why would the average small business owner want to borrow money at this time? They don't because with so much uncertainty, many small businesses can't imagine going into debt via a loan. President Jack Satagaj of the Small Business Legislative Council said, "taking out a loan to invest in inventory in this climate requires a leap of faith." As the administration keeps pushing for new lending, Washington is pushing large commercial banks to set up small-loan funds. In fact, President Barack Obama has once again urged the Senate to complete work on a small-business jobs plan which includes small-business lending fund that would provide $30 billion in capital the government could invest in independent community banks with assets of less than $10 billion to increase lending to small business. accounts receivable factoring could work in conjunction with new lending funds, as it would protect small businesses from falling into debt. The idea is to use funds due to your business net 30/60 or 90 days. Factoring companies are able to factor invoices in less than 48 hours. A business that has funds due to invoice factoring, and leveraging their accounts recevables, makes enough money in less than 48 hours to purchase more inventory. Here's how it works.Alternative financing solutions including invoice factoring can assist small businesses who are facing the challenges due to the economic circumstances during the last year. In order to sustain and grow, businesses need some cash on hand. Invoice factoring enables companies to get short-term working capital and improve cash flow to grow their businesses. Most small businesses don't get paid immediately for delivered products or services, factoring benefits businesses that do not get paid for 30, 60 or 90 days by advancing up to 90 percent against the company's invoices. A factoring company purchases selected invoices at a discount. Factoring companies typically look at the creditworthiness of the client's customers, and they do not expect to buy 100 percent of a company's receivables, so there are no minimum or maximum sales volume requirements.
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