Micro Loans Help New Busineses Find Capital

Micro Loans Help New Busineses Find Capital

Funding a new business in the current climate is challenging. As a rule, banks are much less willing to invest in small businesses than before the crash, and investors are still holding out for conditions to improve.

Yet entrepreneurs still require access to funds to make their ideas a reality, forcing business owners to consider alternative methods for raising the funding they need.

Micro Loans Help New Businesses Find Capital

According to reports in Phoneix-based The Star, micro loans are becoming a more viable way of funding short-term business requirements, including the costs of starting up.

Rather than examining the trading track record or the credit history of the applicants, micro loans tend to be awarded on the strength of individual applications. Typically offering businesses between $1,000 and $5,000, micro loan programs across the continent are already helping businesses create jobs and economic opportunity.

A micro loans program established by Credit Union Ltd. and Alterna Savings in Toronto has rolled out low-interest lending options to a number of businesses in the city. With strong early successes, the program is now being expanded into Ottawa and neighboring regions.

Beyond financial support, micro loans also enable new entrepreneurs to get access to advice on how to run and manage their operations – from legal and compliance issues through to marketing and managing day to day.

Susan Henry, manager of corporate social responsibility at Alterna, said that the micro loans program gives business owners access to much needed support in the early stages of their development.

“It gives an opportunity to learn about marketing, sales, life balance with their work, accounting and bookkeeping. We give them other opportunities to grow their business. We also offer them the opportunity to promote their business at our centre at 600 Bay St. We have a unit where they can display their products and services.”

New businesses can struggle to raise capital in normal commercial conditions. However, with banks more reservist than ever before, it has never been more difficult to get a favorable lending outcome from a business bank.

Private investors too are shying away from investing, as confidence and investor sentiment remains low globally. But with small micro loans proving to be a funding strategy that suits the needs of businesses and lenders, it looks like these types of facilities might soon enjoy further growth.

Advance Funds Network, which helps support new businesses from work at home moms through to larger scale operations, suggested that access to cash flow was one of the major factors affecting growth and prosperity in small American businesses.

“Cash flow can be a significant handicap for any organization, and small businesses tend to be those that can least afford these problems. Banks are letting businesses down by not stepping up to offer borrowing, so essential for companies to grow. Facilities like micro loans and merchant advances can be used to bridge the gap in the short-term, and they are proving increasingly helpful for entrepreneurs.”

Advanced Funds Network provides unsecured credit of up to $500,000 to businesses based on an assessment of their order books, rather than based on credit checking. As a result, Advanced Funds Network works with a number of new and small businesses on a short-term basis.

The perfect investment for smart mums

If you are a physically active mom who sees the value in engaging with your children in activities like cycling or hiking, congratulate yourself. Very few parents take the time to participate in physical activities with their kids. Instead they leave them to the mercy of their Play Station and X-Box.

If your passion for incorporating physical activities into your parenting efforts often leaves you wishing you could share your enthusiasm with other children, now you can. In fact, you can even make a living doing it. If you do some online research you might find that the little gym franchise for sale in your area offers an exciting investment and career opportunity to moms who have a passion for healthy living and children.

A Peak at the Franchise

Investing in a franchise is a legal relationship between the owner of a brand and an individual purchaser (or organization) wishing to use that already credited and established business brand to further their financial goals and dreams of becoming a business owner.

Buying a franchise has numerous benefits. You are paying for the hard work that someone else has already invested in developing a successful brand with a stellar reputation, a proven marketing strategy and something that already offers ROI.
One of the biggest headaches of becoming a new business owner comes down to the unknowns of trial and error. When you buy a franchise, you get some peace of mind knowing that the stressful phase of figuring out what works and what doesn’t work has already long occurred leaving you with nothing but a success path.

Axing the risk factors

There are a few points that should be taken into consideration before one attempts to purchase a franchise. For example, make sure it is rooted in an industry you are deeply passionate about. For example, retired plumbers or people who love DIY projects may invest in a Hardware Store franchise while a retired schoolteacher might invest in a Discovery Store franchise. If you are passionate about leadership, fitness and you love children then owning a kid’s gym would be right up your alley.

Part of eliminating risk in buying a franchise is to make sure the contract includes corporate training. If the company takes the time to train you and educate you on the operational platforms that have made the business brand a success, you will be more likely to succeed. Furthermore, this demonstrates that the company truly values its brand and owners, as they hired an entire department to train and mentor their owners.

Investigate your options carefully

Make sure you not only research the company, but you investigate the pros and cons to owning a franchise. In an article published by ‘Entrepreneur’, the author advises the aspiring business owner to consider five questions to ask a franchise before signing on the dotted line. These include the following:

  • How well did the first opening go?
  • How successful are the marketing programs?
  • Does everyone get along?
  • How much money can I make?
  • If you had to do it all over again, would you?

By speaking to another franchise owner, you will get honest and unbiased answers to these questions. If the other stores are doing well, and the clientele numbers are healthy, it may be the right time for you to take the reigns and enter the business world!