Guide For Small Businesses Finance: 9 Alternate Financing Solutions

9 Alternate Solutions For Small Business Finance

The most significant challenge a start-up faces today is getting the small business finance they need to get going. Which type of business for finance is best? Considering there are many funding options for businesses, including start-ups, trying to obtain a bank loan these days, you do not have to settle for traditional bank loans. Since every business is unique, the best company loan options for you might not be like other companies in your industry or of your competitors. It is dependent upon your needs, goals, specific requirements, what kind of business you are running, the size of the company, credit score, location, your risk level, and any other factors unique to your business. Money magazine has recently updated an article that you may also find useful in your search for Small Business Financing at https://money.com/best-small-business-loans/

6 alternate small business finance options discussed below:

  • Term Loans
  • Venture Capital
  • Crowd-Funding

Term Loans

A type of small business finance option is a term loan. It’s a form of financing with which you get a lump sum of cash upfront, which you will pay back with interest over an interval of time. You don’t have to apply through a conventional bank, as there are many alternate funding solutions. A terrific thing about this choice is that if you qualify, you’ll get the cash upfront to invest in your business. The downside is you will have to put up collateral, and if you lack a good credit score and are a new business, the interest rate will be higher.

SBA Loans

SBA loans have always been popular with businesses, as they offer some of the cheapest rates and repayment terms. The repayment period is dependent upon how exactly you intend to use the money. If it’s for real estate purchases, you will have a longer duration of time to pay the loan back. If you want cash as soon as you can, an SBA loan is not the best business choice because the application process can be long and rigorous, and there is not any guarantee your application will be approved.

Microloans

Microloans are an illustration of an alternative financing solution. While typically earmarked for non-profit organizations, some people who wouldn’t ordinarily be eligible for a bank loan might still be able to receive funding from lending organizations that are microloans.

Unsecured Business Credit Cards

A business credit card can come with some great benefits. They are typically unsecured, so you won’t need to place collateral. To qualify for best terms, needless to say, you will need to have a high credit score already, or you might end up paying additional costs such as maintenance fees and draw fees.

Venture Capitalists

Another sort of funding to look for is venture capitalists. These are like “angel investors,” since they have money to invest and want to invest in young, up and coming companies that can demonstrate that they have a high potential for monetary returns and growth. They look for a share of equity in exchange for their investment. VCs will expect to make money on their investments, so they might want to have some control over the business.

Crowd-Funding

You’ve likely heard of crowd-funding, where start-ups can make a campaign to help raise money for products or their services. While this option can be useful, it’s not simple to reach your financial goals in the period in which you need the money. You’re going to have to have a genius marketing program that will attract much attention from people who have the money.

3 other business funding options to consider:

Other independent organizations offer small business loans for new businesses. There are a few scams, so you must ensure that you’re getting involved with a legitimate business. Spend some time reading over all the terms and conditions. If there is anything you don’t understand, seek clarification. Ensure those terms and conditions are right for you and your business needs. Whichever source you go through should help you, not harm you.

Now you know a bit more about alternative lenders and online funding options, you might want to check with Global Commercial Business Finance at gcbfinance.com. It has a very high approval rate for a small business loan for new business endeavors.

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