To sum up the entire process of lending businesses money, lenders need to be assured that their amount would be returned to them in due time. Yes, there are bad debts every now and then. But, that’s occupational hazard – one you can’t possible predict, and thus, avoid. However, under normal circumstances, lenders continue to exist because borrowers pay them back with interest.

Different businesses may have different criterion for determining who is credit-worthy – that is, who they think would pay them back in time. From revenue stream to cash flow position and asset base, all these things determine the robustness of a business and hence, their ability to pay back lenders.

What this means is that, at times, certain businesses who are not making much profits and do not have any assets to pledge struggle to get their hands on even the most minor forms of small business loans. Doesn’t matter how steady they are or how long they have been in the business – if you don’t meet the predetermined criteria, you are not in.

Many disagree with such a set up that looks at creditworthiness with such a narrow view. One such business is the newly formed ZipCap. Setting aside the traditional measures for creditworthiness, ZipCap is based on the idea of putting one’s faith not in the asset base or profitability of the business, but perhaps what is their most important asset – its customers. If you have a steady and loyal customer base that you can rely on, ZipCap believes in your ability to pay back its loans.

How does it work? For a business to qualify for a loan by ZipCap, it has to start off by recruiting what they call an ‘Inner Circle’ – that is, customers who would pledge spending a certain sum in a specific period. Once this is concluded, ZipCap proceeds towards tallying those amounts and then offer the businesses a fraction of that amount as a short-term loan. Simply put, it ZipCap takes a look at how loyal your customers are and how much they are willing to pledge spending on your business – this is how they determine how creditworthy you are. Moreover, the fee that businesses pay to ZipCap is either a monthly lump sum payment of $99 or 2.5% of the total pledges – whichever they prefer.

This comes as a ray of hope for small businesses who struggle at getting the loans they need. However, one thing that must be noted is that to be consider for these loans, the participants must be in business for at least two years in the same location and must have at least 100 customers in their Inner Circle. This is rather problematic for new businesses or newly located businesses.

So, if you don’t fit the requirements, ZipCorp might not be the place for you after all. What you need is a provider who understands your business and sees why you deserve a loan. One such place you can then turn to is First American Merchant (FAM). At FAM, you can easily get access to a small business loan, without having to go through all the trouble of recruiting members and fulfilling demands. One simple application is all that stands in your way. With years of experience in helping small businesses flourish, FAM offers just about everything you might need in a provider.

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