In order to start or expand a business, or purchase stock or equipment, business owners often need to come up with more money than they have. So to get all the money they need, many of them are often sent scrambling. For many business owners the first source that comes to mind is the bank. But it is pretty difficult for them to qualify for a band loan unless they have excellent credit or valuable assets they can use as collateral. Plus the process can take a very long time to complete. However, business owners have many other sources of financing. The following are a few of them.
Business Cash Advance
Getting a business cash advance is easy and you can do whatever you like with the money. To qualify you will need to have been in business for more than one month and have $3,000 or more in credit card sales a month. You must also have at least a year left on your lease and no bankruptcies or open judgments on your credit. All they will need are some documentation. Just a few months credit card processing statements and business bank statements is generally all it takes. You will also need your business lease and license, proof of ownership, a voided check, and your photo ID. You can receive your business cash advance in as little as one day.
Online Lending
Another source of funding for businesspeople that is growing in popularity is online lending services. One of the reasons for its surge in popularity is the speed of the application process. Generally the process takes about an hour or so to complete. The applicant can receive the money they need within a few days if their loan request is approved. When you compare this to the traditional bank loan application process which can take months, it’s easy to see why applying for an online loan has grown in popularity as an alternative to traditional bank based business loans. A former U.S. Treasury Secretary recently said online lenders could help 70% of small businesses.
Family And Friends
Business owners have long reached out to friends and family for help in funding their businesses. Whether it’s rich relatives or a group of friends and family members pooling their resources, this type of loan offers several unique advantages over bank loans. First of all, the interest rate is low or there is none at all. Secondly, there are usually no contracts to sign. There usually there is no drawn out vetting process banks put businesspeople through. Generally all that’s required is frequent open communication. The businessperson can simply present a clear, well thought out description of the business opportunity and say when the money will be repaid.
Factoring/Invoice Advances
If your business already has lots of customers and you need funds fast, you can get help by using factoring and invoice advancing services. This is a very simple way to get financing faster and easier than talking to your bank. In factoring or invoice advances, a small business simply contacts a service provider, tells them the amount of money they need, and shows them the invoices they have billed out. The service provider will then provide the businessperson with the money they need with the understanding it will be repaid as soon as the customer settles their bill. This method of financing has helped many businesses to remain afloat as they grow their businesses.
Home Equity Loan
For business owners with equity in their homes, a home equity loan is an excellent option for financing their business. Home equity loans usually offer lower interest rates and more flexible schedules than business loans from the bank. This low-cost borrowing method is easy to qualify for, fast, and gives entrepreneurs a good deal of control over the process. Many entrepreneurs find home equity loans to be better than bank loans because in essence it allows them to use their own money. However, they risk foreclosure if the business fails.
Selling assets, side business, bootstrapping, renting out their homes, grants, venture capitalists, credit cards, Angel investors, and Crowdfunding are other financing options business people find to be better than bank loans.