It is becoming increasingly difficult to get a small business loan for lifting your company off the starting block. This is made even more difficult if you have issues with your credit report, such as a recent bankruptcy, short sale, or foreclosure. What do you do if you have solid income but very poor credit? We’ll discuss some of those options, in today’s article.
One route you can do is to try venture capital, or “angel investors.” This can be a great source of funding if you don’t qualify for loans through private capital markets. Of course, you will have to give up some stake in the business. As such, this is not something that works for everyone.
However, this can sometimes be the only viable choice if you can’t afford small business loans.
Another option you could try is to gather friends and family to assist you by either providing loans or becoming investors themselves. Although this option obviously has fewer requirements than getting funding from a major bank, you’ll have a different kind of problem. There will be a lot of pressure if the business fails and you aren’t able to make good on the debts. Remember, you may have to see these people over Thanksgiving dinner!
What if you have some money to get the ball rolling, but you can’t wait for all the incoming payments from your business-to-business sales? These usually have net 30, with points applied for 60- and 90-day payments. One option is to use a service called factoring.
A company that provides this service will take ownership of your incoming invoices. They will pay you for these invoices, minus a fee of only a few percentage points. Obviously, this would be very expensive if you had to do it long term, but as a means to get your business off the ground, it can be a great help.
These are just a few alternatives to small business loans.
For more information, go to Small Business Loans at http://www.unsecuredbizloan.com/small-business-loans/