In a recent report released by the Ewing Marion Kauffman Foundation, California continues to remain a hotbed for entrepreneurs. According to the report, California had 400 per 100,000 adults creating businesses each month during 2013. Moreover, San Francisco had the highest percentage of entrepreneurial activity among the nation’s 15 largest metropolitan statistical areas. Other top states included Alaska, South Dakota, Colorado and Montana.
The report by the Kauffman Foundation notes that on a national level, entrepreneurial activity declined in nearly every state. This however, is not a bad thing. Rather, it’s due to the fact that more people are becoming entrepreneurs out of opportunity than necessity. As Catherine Clifford, senior writer at Entrepeneur.com points out, “A big reason that people launch businesses is because they are unemployed and unable to re-enter the workforce; in other words, they do so out of necessity. This kind of entrepreneurship, while real, is very different than the case of a gainfully employed person who sees an opportunity in the marketplace and decides to strike out on his own to pursue it.”
Entrepreneurs also face other impediments. In their survey of nearly 5,000 businesses, the Kauffman Foundation point to both slow sales and unpredictable business trends as being key issues facing small businesses. The foundation also reported that out of the firms that sought new credit or existing credit, ” nearly 20 percent had their applications always denied,” due primarily to the fact that, “A larger share of those denied indicated credit history played a role in the denials.” Moreover, 18.1 percent of respondents “indicated that they didn’t apply for funding at some point when they needed credit because they feared their application would be denied.”
The Kauffman Foundation acknowledges that credit seems to be the central issue facing the growth of many small businesses. ” When asked to report if they applied for and obtained loans or lines of credit and the reasons why these applications were not filed or were denied, access to credit still seems to be an issue for many firms,” the Kauffman executive report states.
Unlike traditional bank lines of credit, that focus on a credit score, factoring focuses on receivables from customers and their ability to pay. Where lines of credit may be denied to companies with high growth curves, factoring is a great option, based on a company’s customer base.
Overnite Capital focuses on helping out small businesses in a manner where the credit score is not the sole indicator of a businesses’ worthiness for funding. Take the steps to secure an immediate cash flow by contacting Overnite Capital today.