photo credit: ellievanhoutte
Based on information compiled in two studies, both venture capital and angel investments have declined this year. According to the Money Tree report, released by the National Venture Capital Association and PricewaterhouseCoopers, first quarter investments for 2009 plummeted to a 12-year low. “Quarterly investment activity was down 47percent in dollars and 37 percent in deals from the fourth quarter of 2008 when $5.7 billion was invested in 866 deals,” as stated in the companies’ press release. “The quarter, which saw double digit declines in every major industry sector, marks the lowest venture investment level since 1997.”
Still, according to Business Week columnist, Karen Klein, small business owners are still looking for and receiving private investments in small rounds.
Private Investor or Business Cash Advance?
Whether you should look to a private investor or a business cash advance for business funding, depends on a variety of factors, such as; the type of business you own, your business’s current standing, others’ interest in your business, etc.
“…venture capitalists [are] looking at early-stage deals more seriously today than in the recent past,” writes Klein in her article “Where Entrepreneurs can Still Find Private Capital.” She quotes the president of the National Venture Capital Association, who says, venture capitalists are also trying to keep late-stage businesses alive and the founder of Tech Coast Angels who says, angel investors like companies that have already been commercialized or can get aid from the stimulus package.
Small business owners who have owned their businesses for at least six months and process at least $5,000 a month in credit card sales can be eligible for a business cash advance, so startups are better off looking into private investors than business cash advances.
Business cash advance providers typically cater to small business owners who do not qualify for traditional methods of business financing, whether it is due to a less-than-perfect credit score, a lack of collateral or anything else. Still, even small business owners who do meet bank requirements, but need fast cash, or prefer flexible repayments can still benefit from the business cash advance.
Main requirements for a business cash advance:
• Applicant has owned business for at least 6 months
• Business processes a minimum of $3,500 in monthly CC sales
• Applicant has no unresolved bankruptcies
• Business has at least one year remaining on lease
If you meet these requirements and you:
• Want the freedom to use your funds however you choose
• Want fast cash
• Desire a renewable source of business financing
• Are interested in a payment method that goes with the flow of your business
…then the business cash advance is a great option for your business.
Gaston C. writes articles about the Business Cash Advance for Merchant Resources International.
