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UpStart Business Journal – Small Business Finance Gets a New Look

10/23/2012

Small businesses come in all shapes and sizes, but the need for funding remains constant for all.  With many small businesses having issues receiving capital from your traditional lending sources, it is about time a new model of lending took over.  Enter entrepreneurs.

There is a new wave of small business funding taking over, and the main drivers behind this wave are entrepreneurs.  These new entrepreneurs are taking the old model of lending capital and giving it a major overhaul.  The new model is to loan capital to small businesses based on new data and algorithms not in equity in the company, but on revenue and cash streams.  The old model required a lot of start-ups to give up equity in their company in return for capital, this new model does not require equity, but rather takes their fees and loans out of a company’s revenue.  Three such businesses that have made this model successful are…

1.) Lighter Capital

2.) Kabbage

3.) American Finance Solutions

Lighter Capital focuses their lending on start ups, Kabbage on more Main Street businesses, and American Finance Solutions on merchants.  All three are leading a new trend of lending, and all three have been very successful as of late.  As one entrepreneur who has taken loans with Lighter Capital put it, “When everybody makes money, everybody makes money.  It’s a beautiful thing.”

To learn more from UpStart Business Journal, visit http://upstart.bizjournals.com/

For this full article, visit http://upstart.bizjournals.com/money/strapped/2012/10/09/hold-small-business-finance-gets-a.html?ana=e_du_ubj&s=article_du&ed=2012-10-09&page=all

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