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Case Study Small Business Loans

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This post contains some case studies on how General Small Business Loans helps run small business.

Case Study 1

Ron runs a small shop at the west end of San Francisco. May was an exceptionally busy month for him. He was able to sell off most of his wares quick and easy. He had a standing order for more goods as well. Wonderful! Everything seemed nice till now. But there was a problem. Most of his customers buy on credit.

He knows they will pay up, but the cash would come only after 2 weeks. In the meantime, he had to invest money to buy new wares so that he could keep selling and honoring those standing orders. Ron just couldn’t afford to keep his store empty.

So what does he do?

Ron goes for a small business loan to see his business through till the money from prior sales begins to come in. He doesn’t have to spend a lot of time seeking the funds, as the cash advance is credited to his bank account in just 24 hours. That is perfect for him, as he can keep focusing on his business.

Case Study 2

Richard Dyson knows that business and personal expenses should be kept separate. But it was rarely the case with him, like so many other small businesses across the US. The money he made at the end of the day often went towards paying the bills, buying medicines, college fees of his son, and that occasional splurge. He just couldn’t keep them separate, no matter how hard he tried.

Disaster struck suddenly! His wife had to be hospitalized one morning. Most of his savings went to paying the hospital bills. To make matters worse, it was the end of the month as well, so he had to pay the salary of his two employees. That couldn’t wait, as they required the money too. If these two guys go, Richard wouldn’t have anybody else to run the business, as he was himself busy with his wife’s illness.

But all was not lost. Dyson took a small business loan, paid the salary, and everything went on smoothly. Crisis averted!

Small Business Loan Companies to the Rescue

It is quite well known that many individuals, particularly those who are denied credit by the conventional lenders and banks, go to small business loan companies whenever they are in urgent need of a cash advance. This happens throughout the United States and elsewhere in the world too. Ironically, these lenders are attacked even after all the good work they are doing.

But it’s not just the individuals who gain from these loan companies. You might be surprised to know that even small businesses can benefit immensely from these loan companies. Case in point – the two case studies given above.

The fact is that, not much has been said about how small dollar loans are helping small businesses solve their temporary cash crunch situations.

Sure enough, Wal-Mart Stores, McDonald’s, The Home Depot, Ford Motor, Boeing, Citigroup, Verizon Communications, AT&T, General Electric, Hewlett-Packard, Wells Fargo and the other large businesses generate a lot of revenue and employ thousands of people across the country.

The US Economy Depends On Small and Mid-Sized Businesses

But the US economy would surely take a deep nosedive if small and mid-sized businesses shattered. These enterprises are present in virtually every street of America. Their presence is undeniable. Collectively, they employ many more people than the big boys. They are the backbone of the American economy, and the great American dream. The big boys can outsource, have their factories in China, Korea and Malaysia, and send away the employments there. But the small and mid-sized enterprises are deep-rooted to the American culture. They employ only locals, and keep the local economy running.

These are the businesses that often need emergency cash, as they are low on reserves. And many of them are turning to small business loans for sustenance and even survival. Sometimes, the money is required to make a small investment, sometimes for urgent repairs, and sometimes it could be as simple as buying fresh stock or paying salaries.

Why a Bank Is Not the Solution Often?

Often the requirement is urgent. Approaching a bank isn’t the solution as it can take up to two weeks to get the money. Sometimes it takes even more time. So the very purpose is lost. There are simply too many delays and hassles.

You need to fill out the form first. The bank will then make inquiries, see your profit-loss account and balance sheet before deciding. There could be the issue of collateral too. You might have to visit the bank a number of times, which means time away from the business. Many small business people cannot afford this as they are always hands-on.

And anyway, banks usually are not too keen about loans of small amounts. They never give these loans the importance they deserve. The big boys bother about big amounts.

Small Business Loans – Just the Opposite of This

Small business loans are all about convenience. These businesses can apply for a loan online. There is no collateral or mortgage, not even any credit check. You can ask for as little as you want, even as little as $500. The term is short, so there is no long-term debt to worry about. And the money is deposited directly to the bank account in just 24-48 hours.

No wonder, thousands of small businesses across the country are going for these loans now. Rarely has there been an extensive survey of the impact of these loans on the performance of small and mid-sized businesses. But if such a study was performed, then it would have proved how important small dollar loans are for the American economy.

Make It Easy To Get Loans

Credit rationing for small businesses is the worst news for the US economy. The regulators should do just the opposite. In a capitalist society, you need to make it easy for business to get money. Make the enterprises liquid so that they have the money to prosper, roll the money back, and hire more people.

This will solve unemployment, stop the outward flow of employment, and make the US economy grow from the inside. More employment means more purchasing power. So if the small and mid-sized businesses are able to grow, then the bigger players are going to eventually gain too.

Small business loan companies are doing a good work. By imposing severe restrictions, the market regulators could end up severely cutting the growth of many businesses. Allow these lenders to keep offering money to small and mid-sized businesses. The promoters, employees, and suppliers all depend on them. In fact, the entire neighborhood could suffer if they shut off. Let these innovative engines grow the American economy.

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