If you are reading this article, that means you are despairing about getting financing from a bank. It is obvious, as they have steep demands for the borrower, such as collateral, a perfect credit reputation, a lot of paperwork with information concerning your company, etc. Usually, several things are lacking in your application to traditional financial institutions, and that is why business people have started to pay more attention to alternative lending solutions.
Small Business Administration
This is a government agency that promotes and supports business expansion. SBA works in partnership with the banks and other lending institutions, encouraging them to lend to business by guaranteeing 75% of the loan. That is why it is a halfway alternative to a traditional bank.
This agency offers multiple loan programs that are usually repaid with monthly payments within 10 to 20 years. For more information on the SBA programs (disaster, export assistance, veteran and military community, and other special purpose loans), visit their site. But do not rush to leave this article as there are more available alternatives.
Crowdfunding is a new and upcoming way of financing new ideas or projects, through social media websites like Facebook, Twitter, and LinkedIn, to attract investors worldwide.
How does it work? It is very easy. A company creates an online profile and submits its funding campaign. The crowdfunding platform reviews it and approves the campaign.
The campaign is launched. Investors review the company, participate in the conversation, and commit to investing. Companies approve and close investor commitments, documents are signed, and funds are transferred. But it is not an easy alternative to your business should be sought-after among the different social groups if you want to try this option.
One of the most prevalent sources of additional capital is not commercial lending sources, but your nearest and dearest. This make sense, as who else but your relatives and friends know that you are reliable? But it is important to remember that when borrowing from kinfolk, you should be more delicate since you can damage relations. We would like to give you a piece of advice (in case you have decided to take money from your friends or relatives): Treat them as strangers. Do not mix business and personal; it is very dangerous. And do not forget about payments. Though your loved one who supplies your company understands the risks, you must never take a loan for granted. Moreover, you may not have significant capital from such an investor as they have their financial limitations.
Merchant Cash Advance
This is a perfect alternative to a traditional bank if your company is in urgent need of money, as this is fast access to the cash. Business owners can apply online, providing the lending company minimal information without tons of documents.
The whole application and approval process takes less than one day, and funds are deposited into the business’s account in several hours. By comparison, weeks may pass from the time a bank loan is applied for until the borrower is approved and the cash is available.
Merchant Cash Advance is a great option for the restaurant and seasonal industries (that are rarely approved by banks) and businesses with a gap in cash flow, as well as businesspersons with a poor credit reputation and without collateral. Frankly speaking, the only two requirements are that you should be in business not less than one year and you need to have a credit card or open line of credit.