Small Business Blog

The American Bankers Association (ABA) recently published a white paper entitled, “Assessing Your Banking Relationship: Seven Key Questions.” The article is the fifth in a series of white papers intended to help small businesses obtain bank loans.

In the article, author Robert Seiwert poses seven true/false statements to help you evaluate the quality of your relationship with your bank. The purpose of this evaluation is to determine whether your bank will continue to “be there” for you, in terms of providing financing when you need it, giving you competitive pricing on financial products and services, and offering you guidance and support as you set out to achieve your business goals.

The premise of the article is interesting enough: one means of protecting your bank funding is to woo your banker, in the figurative sense. Your banker wants you to be a stable and committed business partner, and it’s up to you to prove that you fit that mold. If you aren’t making the desired impression, you will see your banker become distant and non-responsive — like a bored spouse who’s wondering if there are other, more exciting fish in the sea. (continue reading…)

In May of 2009, small business credit card provider Advanta Corporation announced that it would shut down roughly one million small business credit card accounts. The news is a sign of the times: economic conditions are taking a toll on small businesses and their lenders. If the profitability of small business lending continues to decline, small business owners will be increasingly challenged to locate the credit they need to fund expansions and special projects.

One option that’s becoming more popular for entrepreneurs and small business owners is the merchant cash advance. Merchant cash advance providers offer cash upfront in exchange for a piece of the business’ future sales. While this arrangement technically isn’t an extension of credit, it does generally function like an unsecured small business loan: the business obtains a lump sum of cash and repays it, along with a fee, over time. (continue reading…)