If you are looking to make improvements to your already-existing business, or get a new business off the ground in the first place, you might be wondering what your financial options are when it comes to borrowing money. Of course, the most traditional option for business owners is to borrow from a bank or other established financial institution. For some borrowers, however, this is not an option.
So, what are the alternative options at your disposal?
Microloans for Business Growth
A microloan is an easier and faster way to get money than a traditional business loan. They have been made even easier to obtain thanks to lenders online. It is important, however, to keep in mind that the term micro refers to the size of these loans. Microloans typically are usually worth under $50K. If that is not enough for you, you will probably want to look for a different kind of funding, if they are right for you they can be used for a number of things.
If you need money for equipment, inventory, supplies, paying employees, etc., microloans can be a great option and are certainly something to consider.
A great way to cast a wide net to a multitude of different funders is to try and get your business crowdfunded. This works primarily for businesses that are just starting out and something that is new and exciting, that’s the way to attract a large number of interested parties, which can lead to huge amounts of money being lent to you for your business.
There are many sites that you can considering if you want to try to crowdfund your business, but it is important that you do the work beforehand. If you want to crowdfund, you’ll probably only get one shot to start a successful campaign, and you’ll want to have a great angle to convinced funders to give you their own hard-earned cash.
Credit from Vendors
Vendor credit is the largest use of capital from business to business and is still one of the most popular alternatives to personal and small business loans. In fact, the Small Business Administration reports that it’s the single largest source of small business lending in the United States today. If you are looking to start up your business, you can gain access to short-term financing from vendors with minimal requirements.
It can be an invaluable solution for you that can provide your business with the ability to purchase products and services you’ll need upfront while allowing your business to defer payments for a later date. It can be something of a financial risk if you cannot afford to pay back your deferred payments, but what kind of loan isn’t a kind of risk?
Personal Business Loan for a Small Business
Securing a traditional business loan can be a time-consuming process and can be truly difficult to obtain if you are just starting your business up. In fact, in a recent study by Pepperdine University, only 34% of small business received traditional funding through their bank. That’s why many small business owners turn to personal business loans.
A personal business loan is a loan made to you, the individual, based on your personal credit score. That way, the lender doesn’t have to consider the credit of your business. Upon approval, you can use funds towards the financing of your business. On top of that, personal business loans can take just a few days compared to a traditional business loan which can take a number of weeks to approve.
Car Title Loan for Business Use
If you have looked into several options and have come up short, one option that could be a great help to you is a car title loan. A car title loan is very different from the other options on this list because they are small secured loans that are tied to the value of your car.
If you are looking for a quick injection of cash to make some small improvements, or need fast cash to pay for your business’ rent, a car title loan car be a great option.
Basically, the way they work is quite simple. You apply for your loan by using your car to qualify. That means that in order to qualify you must have a car with a lien-free loan. Car title loans typically do not require a credit score check, which can be a great thing for some who are struggling with less-than-ideal credit scores.
It is important to keep in mind, however, that because car title loans are secured loans, if you fail to repay your loan within the payment term provided to you by your lender, you do run the risk of having your car repossessed.
In the end, all of these options are meant to help you best start, continue, or run your business. If is up to you to decide which option is best for you, or if the best option for you does not exist on this list at all. Either way, it is important to know that there are a plethora of ways to get the funding you need to help get your business off the ground.