OK. So you own a restaurant or retail business and you need funding. You walk into the bank and tell the banker your story. You tell him your credit has suffered a bit recently and your sales have declined a bit from last year but you need money. At this point the banker breaks out into laughter like he just heard Robin Williams doing his monologue at the Oscars. Maybe this is exaggeration and certainly not funny especially since the life of your business could be hinging on whether or not you get this funding. What is laughable is that banks keep saying they are lending money and business owners keep saying otherwise.

Restaurant funding is getting increasingly more difficult to obtain especially if you approach a typical bank. We have all heard in the news that banks have been given billions in bailout funds to secure and stabilize the banking system which in turn should encourage banks to lend again which would stimulate the economy. That is great in theory but the reality is that small business owners and especially restaurants can’t get financing from a bank. Recently I was told by a bank representative of a very large National bank located in N. Carolina that starts with a W, that in order to get a loan you needed a 740 credit score or higher. Compare that to two years ago when 640 was acceptable. He also told me that they would have to provide two years of tax returns and needed to show increasing sales year over year. That alone alienates about 90% of all businesses in the US. How many had an increase over last year? Two years ago you could get a loan with stated income which means you didn’t have to prove it and no tax returns. Wow, have things changed. If you are going to try the bank loan route, be prepared to bring your tax returns, personal financial statements, great credit, your first and second child, and a lot of begging. And after giving it your best shot, you too may very likely go to the mailbox in three weeks and open the dreaded letter with the word Declined stamped on it.

So what do you do if you own a business, your name is not Gates, and you need to fund expansion, buy inventory, or whatever else you do in the normal course of running a business? There is another option. It is called a merchant cash advance or business cash advance and is becoming an extremely popular option largely due to the fact that banks are just unwilling to lend money. Not to mention the fact that it is also a much easier process. There is very little paperwork and the benefits are many. There is no personal guarantee required, no collateral, and poor credit above 520 is typically ok. Oh, and you can get the funds typically within 7 days. There are lots of differences between companies so make sure you choose wisely and don’t put your dreams on hold. If you need retail or restaurant funding, do what many already have, consider a merchant cash advance.