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CREDIT CRISIS SOLUTION FOR SMALL BUSINESS OWNERS

Guest post by: Lana Larder

Article Overview: Alternative lenders in North America can include Angel Investors. Microfinancing can be compared to Angel investing for small business owners in North America. Microfinancing services provide funds to individuals who seek capital for business start ups and/or working capital for growth. This alternative financing avenue is for those who can not access capital from traditonal lenders.

CREDIT CRISIS SOLUTION FOR SMALL BUSINESS OWNERS

The recent credit crisis has forced business owners and start-up entrepreneurs to seek capital from alternative lenders because of the tightening of the belt from traditional lenders. Alternative lenders can include Angels and/or microfinancing. Microfinancing can provide financing, credit building and business training to individuals who seek capital for business start-ups and/or working capital for growth and can not access capital from traditional lenders.

The success of microfinance can be found throughout the world and typically is provided for women because they have a harder time to access capital. Microfinancing is predicted on the belief that access to affordable capital can play a critical role in unleashing the entrepreneurial capacity of individuals and/or business owners that can not access capital. Thereby raising each borrower's standard of living and bettering the community they live in.

There is a tremendous need for microfinancing services. In fact, two thirds of the world's population are not serviced by big financial institutions. In many cases, individuals and/or businesses have no credit score or suffer from poor credit, effectively shutting them out of the mainstream financial system. As a result, this group relies on fringe and predatory financial services.

Microfinancing services can enable disadvantaged groups to 1) start and/or expand their businesses through affordable loans, 2) access services such as business and financial literacy training, 3) build credit history through successful loan repayments.

Often microfinancing services will partner with government, non-profits and community partners so there will be a good sense of the borrower's character before a loan application is even filled out. Pivotal to microfinancing are the additional services that clients require to succeed.

Microfinancing services typically offer affordable, flexible loans. Because of the recent credit crisis, research, focus groups and conversations with individuals and businesses there now is even more of a strong demand for these type of loans.

Microfinancing has generated a buzz in the worldwide community. The recent economic downturn and financial crisis have underscored the need for access to affordable capital. Microfinancing can serve a critical need in communities, and create a paradigm shift in thinking about the importance of access to equitable financial services.

Microfinancing can be compared to Angel investing in North America, and is dedicated to providing financing to meet business needs and current gaps improving business opportunities for disadvantaged individuals and/or businesses. Microfinancing provides opportunities for economically disadvantaged individuals and companies creating pathways out of poverty to economic self-reliance. Microfinancing is an economic and social change agent. The benefits of these investments lead to long term and community wide benefits creating a healthier and progressive financial system..

Re-investing in future individuals and entrepreneurs is a short-term investment for large, long-term savings....

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Article Tags: alternative lenders, angel, credit crisis, economic solutions, financial services, financing, microfinancing, partnering, solution, worldwide



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