When most people want to start a business, they have to sparse through a ton of options and make decisions regarding how they are going to finance their business. Some individuals decide to take out a small business loan. But a recent survey by Sageworks, a financial information company, discovered that 75 percent of owners who’ve been in business for under ten years have never applied for any type of loan. Instead, more than 60 percent of business owners chose alternative means for financing, and state that they bypassed loans because they didn’t want to deal with excessive debt. Also a quarter of business owners didn’t believe they could get approved. Others believe that the traditional loan process is too lengthy and complicated.

Of the business owners that were surveyed, 59 percent just used their own personal savings to fund their business. Others got help from family and friends, obtained a line of credit, or got some other type of loan. Analysts say that avoidance of traditional small business loans are common because many new businesses face a probability of failing; therefore they don’t want to be indebted to a lender.

Some owners who do choose a small business loan can jeopardize the business if management focuses on ways to pay back loans, as opposed to strategies to grow the business. Despite the reservations of many small business owners to pursue traditional loans, the borrowing environment has become easier as interest rates have declined and credit standards have eased.

The time is right for you to start your own small business. The best part is you don’t have to rely on yourself to stay in business. There are alternatives to traditional small loans for small business owners who may struggle getting a regular loan, or who don’t want to borrow from friends and family. First American Merchant is an online merchant cash advance company that provides small business cash advances. Our merchants provide flexible programs that give merchants access to loans in less than 72 hours. There are no financial records or tax returns required.

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