Have you ever felt like your life is centered around that tiny three digit (If it’s not three you’re in real trouble!) number called a credit score? It can ascertain whether you lease a habitation , receive a mortgage, go to school, how how expensive your interest is, or whether you can get small business financial help.

typically most banks will lend or provide small business financial assistance to a business depending on a variety of factors. Cashflow, time in business, personal experience of the owners , past tax returns and personal and business credit scores are all considerations. This is all well and good if you have managed to keep a good or excellent credit score. If however, you have made mistakes , missed payments, or had to keep a high balance through an emergency then you will have trouble getting financial help from a traditional lender.

Now you may be thinking that sounds unjust . The personal finances of a business proprietor don’t have to indicate the fate of the business. Especially if the business is established and doing ok on its own.

There is actually a migration away from the focus on personal credit in the lending process. This option small business financing help may be the solution for a number of small business owners who have been turned away from after filling out a traditional small business loan application.

How cash-flow-based business loan financing works .

Cash flow based small business financial help typically comes in the form of an advance. For instance merchant cash advance. The lender will buy your business’ future credit card sales at a somewhat lower amount and advance you the cash. Essentially, if you are expecting to make $10k the lender will purchase that $10k for $8k. You have $8,000 to commit in your business and no monthly payments to make. The key to this being a viable option is of course in the cost. Companies providing honest small business financial help in the form an MCA will also offer a discount on your credit card processing fees. This will help offset the slightly higher cost of an MCA equated to a bank loan.

Another choice resembles a average loan, except that the lender is more interested with your monthly cash flow, rather than credit. These loans usually offer flexible repayment, such as small micropayments taken day by day or with each dealings.

Regardless as to whether this is the best option for your small business, it brings up an interesting question about the role of our credit score in our lives. Are these new forms of small business financial assistance an indication of the slow removal of personal credit from business finance, or simply an choice to a traditional loan? Only time will tell.