Funding Tips for Small Businesses
Whether you’re getting ready to launch a brand new business from scratch or help an existing one keep growing, finding the right small business funding solution for you is a must. Keep the following information in mind as you evaluate your options to help take the guesswork out of the decision-making process.
Understand Your Options
Don’t make the mistake of thinking traditional term loans are your only option if you’re in need of funds for your small business. While there’s definitely nothing wrong with them, they’re not always the best fit for everybody or every business. Some alternatives that can be especially good fits for small businesses, in particular, include the following.
Small Business Lenders
If you’ve had trouble securing a traditional loan from your bank, you might want to consider approaching an establishment that actually specializes in small business funding. Start by contacting the SBA (Small Business Administration) and learning more about programs you may be eligible for.
This type of lending is a great fit for businesses that have already accumulated a few valuable assets. (Commercial real estate, accounts receivable, valuable tech, and equipment are all good examples.) You use your assets as collateral and receive funding that correlates with their monetary value. Advantages attached to this method include quick funding in comparison to the alternatives and lots of flexibility as far as how you can use it.
Private Investing and Crowdfunding
Of course, you’re always within your rights to look for a private investor for your business or approach a family member with deep pockets who’d be interested in getting involved. Crowdfunding is becoming an increasingly popular option for small business owners as well.
Choosing the Right Option for You
Which option is the best fit for you depends largely on what you want the funds for, as well as your current needs and financial situation? If you have good credit and would like to leverage it in the interests of your business, a line of credit or traditional bank loan may be a good fit for you after all. (Just be sure to shop around for the best rates and most generous repayment terms before choosing a lender.) Those with less than stellar credit or that are hoping for faster, more flexible funding because they’re looking to support a business that’s already flourishing may want to go with small business funding based on assets or personal relationships with individual investors. How will you use your available options to take your business to the next level?