Business Cash Advances – Help for Small Businesses

If you own a small business, did you know that you can obtain small business funding to help you grow and expand your business? How this works is that if your business qualifies, you can obtain a cash advance for small business owners.

Qualified merchants receive an immediate business cash advance that they repay through a direct deduction from their future credit card receipts. Typical advances are repaid within 6 to 8 months.

Merchant cash advances are a relatively new innovation in the small business finance industry that is rapidly growing in popularity. Unlike a traditional bank loan, the process for applying for a merchant advance is simple and fast.

Businesses do not need to provide personal guarantees or collateral to receive an advance. Repayment is based on a percentage of the merchant’s future credit card receipts. Lastly, merchants may use the advance for any business purpose.

A small business can receive a cash advance from $2500 to $600,000. It is considered to be an advance on a credit card, and you pay it back through your future credit card receivables. You can receive the cash advance in as little as 10 working days.

Finally, there is a way to obtain the small business working capital you need, even after you have been turned down by traditional lending institutions, such as banks. So even if banks have turned you down, don’t lose hope. Getting a merchant cash advance may be in your future. To learn more, read the facts at RapidAdvance.com to see if you qualify for a small business cash advance.

Raising Small Business Finance – The Easy Ways

Are you trying to open your own business, but are struggling because of the financial side of things? Do you know how to raise money to start a business? There are many ways of raising small business finance and there are ways that work better for some than for others. Here are your main options when it comes to small business finance.

First, you can take out a loan from the bank. This usually is an option if there will be some real estate to secure the loan and you have good credit. This is also an option if you are in good standing with your bank and they know you very well. You will need a very good business plan and it can be a bit of a process to get the loan you need.

Second, you can go to your local Small Business Administration and see what type of government backed loans you can qualify for. There are usually some types of programs for just about everybody. There is also some good advice available if you do not have any luck finding the loan you need from the SBA. Again, you will need a good business plan.

Last, if you are one of those individuals with bad credit, then your options for raising small business finance are a bit more creative. You can sell stock in your company to get private investors that do not have to put up their live savings. You can get a couple of private backers and pay them a good sized interest rate. You could also get an Angel investor to back you. Any of these will work and they are very obtainable.

Small Business Finance – How You Can Quickly And Easily Do A Break Even Analysis

Break-even analysis is a good tool for quickly determining if an idea has any legs under it. It is not meant to be used alone as a sole decision making tool. Most business formula-tools work better when tracked over time and compared with other decision making tools, including the owner’s gut instinct.

Break-even needs you to track your direct costs. Direct costs are expenses that only occur when you sell a product. Examples of direct costs are cost of products you sell and supplies. Once you subtract these costs from your income, you know how much each sale contributes to pay for your overhead (another term for indirect/fixed costs) costs. Business terminology can get confusing but hang in there.

This can also be done with percentages.

o Step 1 is to subtract your direct costs from your income to get a number called “Gross Profit.”

o Step 2 is to divide the gross profit number by your income to determine its percentage of income; e.g.

o $2,000 of income minus $500 of direct costs equals $1,500 of gross profit.

o$1,500 divided by $2,000 equals 75%. This means that 25 cents of every $1 of sales goes to paying direct costs (products and supplies) and that 75 cents is left over to pay for all the other expenses (indirect costs) plus your profit.

oIf your company has rent, advertising, utilities, and auto expenses (all indirect costs) of $1,000.

o Then $1,000 divided by .75 equals $1,333 (this is the sales volume necessary to pay all your indirect costs and your profit equals zero.

o The $1,333 level of sales in this case represents your break-even point.

How can you use break-even info? Using the above example, say you want to hire a helper that is going to cost you $800 per month. How much more income do you need to pay for this helper?

o $800 divided by .75 equals $1,067.

o You need $1,067 additional income per month to pay the $800.

Break-even analysis is a great way to set sales goals for your sales staff. The base salary you pay would be an indirect cost and any commission would be a direct cost.

Let’s use the above example.

o $800 for base and you are going to offer a 20% commission on all sales.

o The 20% would have to be added to the direct costs (25% + 20% commission = 45%).

oThe new gross profit as a percent would be 100% (total sales) – 45% = 55% gross profit.

o $800 base salary divided by .55 = $1,455 in additional sales to pay for their base salary and commission.

Let’s say you want $5,000 per month for yourself. Add the $5000 to the indirect costs and then divide by the Gross Profit % and you now have a pretty good idea of what your sales volume needs to be to provide you with $5,000 a month income.

Let’s build on the salesperson example.

o $5,000 plus the indirect costs of $1,800 equals $6,800.

o $6,800 divided by the gross profit % of 55% or .55 = $12,364 in monthly sales volume should provide you with $5,000 in monthly income.

Break-even analysis is a linear tool and assumes that operational relationships between sales and expenses will remain the same (as laid out in the formula). Decisions involving longer terms or with multiple variables are more difficult to predict and should be re-analyzed over time.