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Recent data shows that SBA lending in Southern California is up about 50% over the same period last year and dollar volume of these loans has nearly doubled. This appears to be good news for small business and supports the notion that the economic stimulus enacted in 2009 reached the right hands.

However this good news does not paint a complete picture.

Factoring is has always been a reliable way for businesses to gain access to capital. However this is particularly true with businesses that have financially strong clients.

Here are a few examples of businesses that would likely be turned down by …

A financing decision that the State of California is in the process of making is the perfect model of how asset based lending can be used. The State of California needs money to run their organization (sound familiar business owners?). However the State is not in a good position to take on more debt. In their case it is because they already have a great deal of debt but in the case of business owners, they may be too small, too young or perceived as “too risky” to borrow. However the State of California has an asset, in their case office buildings, that they are considering using as collateral in a ‘sale lease-back’ arrangement so that they can make use of the cash value of the asset while still maintaining use of the property. This is the prototypical model for asset based lending. Let me break it down further.

Factoring can be a perfect way to finance business growth for a number of reasons. It can solve cash flow issues, the funding grows with your sales, the funding is flexible, it doesn’t add to your overhead, etc. However, a …

The Obama administration has come up with a new initiative to help small businesses. Details of this plan can be found here. The goal of this initiative is to increase access to capital through tax breaks on small businesses investments and lending incentives to smaller community banks which should lead to job creation. Here is a break down of the initiative.

To increase small businesses access to loans a $30 billion “Small Business Lending Fund” (SBLF) will be created. Access to this fund will be limited to banks with less then $1 billion in assets as to target smaller community banks that are a staple of small businesses lending. The funds will given to banks with a sliding scale interest rate that gets lower as small business lending is increased compared to previous years. For example, if a bank were to increase their small business lending 10% or more compared to 2009 numbers, the rate they would pay for the SBLF funds would be 1%; if small business lending stayed the level the rate would be 9%.