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Sam’s club has begun wearing a new hat; Business lender. They offer business loans through the SBA’s community express program. To be precise, they are not actually making the loans, they have partnered with Superior Financial Group, a leading SBA lender.  This seems like a strange fit for Sam’s club, a large retailer, to be playing financier. But it highlights an important shift in how businesses are demanding money; they want it quick and easy.

A recent survey of business owners by the NFIB has gotten a lot of attention. It showed that small business owners are pessimistic about the current state of the economy. Other data suggests that small business lending is down (This article is exceptional, please read) due to the expiration of stimulus measures that offered 90 percent guarantees on SBA loans. Although there may be new legislation to return guarantees to 90 percent, it may take some time before it becomes effective. There are also talks of a double dip recession that could undo the recovery process and send us into another recession.

With the current uncertainty, managing business risk is of utmost importance.

Purchase order financing is a unique form of financing that can be utilized very profitably. It essentially makes it possible to handle orders that otherwise would have not been financially possible or responsible to take on. This means that Purchase order financing or PO financing increases a businesses ability to make sales and thus make profits.

It also has positive affects on a business’s cash flows.

The current recession has created a bleak lending environment for businesses and new data suggests it is getting worse. Today Federal Reserve Chairmen Ben Bernanke said that “many “creditworthy” firms with “strong” cash flows are having trouble getting loans.” This statement was based on data showing that S.B.A. lending has seen a two-thirds drop in the month of June compared to May, to bring it to the lowest levels in decades. Bankers say this steep drop is due to the expiration of a bill that provided higher percentage guarantees of loans made through the S.B.A. program.

With the S.B.A. taking a big hit, business’s have increasingly turned to asset based lending as it is usually the only option left open to them.

There are business forums all over the internet, full of people with good ideas that just need funding to get things moving. Most are hoping for an angel investor to provide them with the funding they need. This is one approach as Angel investors they can be utilized for all types of businesses; it is the “one-size-fits-all” financing method.  However angel investors are hard to come by and are not the only way to secure funding. There are many creative ways to fund businesses that are unique to a particular business model. Knowing what types of financing are available may help you receive the funding you are looking for.

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%.

Factoring is very different from “traditional” lending. For one, it is definitely more expensive. But with the expense comes added flexibility and services that other types of lending cannot match. So this leads to the question: When is it a good time to switch to other types of financing?

To answer this question the business must first look at what financing options they qualify for. If factoring is their only option then it can help increase business volumes while building credit history, both of which may help the business to later qualify for a different, perhaps more ideal form of funding.

Small businesses in Los Angeles have recently taken a hit. Innovative Bank, one of the largest lenders of SBA loans in Los Angeles and nation wide, was closed by the California Department of Financial Institutions and their deposits were transferred to Center Financial Corp. Executives at Center have stated that they are not going to continue Innovative Bank’s high-volume small business lending and will focus on larger loans to bigger businesses.

Every aspiring entrepreneur dreams of one day starting their own business. And while they might dream of the days when it grows to become a large empire, the reality is that the entrepreneur will have to start small. Starting at …