Unless you come from a generous family with lots of free money, most owners of startups struggle with sufficient small business financing. It can take years for a business to turn a profit and most revenue earned must go back to the business in order to develop and expand it.
Even businesses that generate revenue month after month can wrestle with cash flow and working capital issues because the costs of running a business tend to be higher than most novice business owners expect. From payroll and rent to marketing and technology costs, running a business requires ongoing small business funding. Desafortunadamente, business loans are often out of reach for many small business owners.
What Are Alternative Ways of Securing New Business Funding?
- Presales – If you manufacture a product, you can get cash by producing and selling a specific product in advance, and then use the proceeds to build out the business. Thanks to the power of the internet, this can be done fairly inexpensively and if done right, can help set the course of your business once it gets more established.
- Home Equity Loan – If you are a homeowner, and as long as you are comfortable putting down your property for collateral, you may qualify for a home equity loan. Such loans might provide more flexibility than a small business loan, and they may also come with lower interest rates and fewer use restrictions.
- Starting on the Side – Obtaining small business funding is difficult. Como tal, funneling money from a current job into a new business might be a better option than going cold turkey.
- Online Cash Advance – Most suitable for home businesses that sell a service or product through a third-party website like Etsy or eBay, online merchant cash advance sites can provide sellers with a cash advance for a percentage of their sales.
- Crowd Funding – Though they seem to be popping up everywhere, many small business finance experts say these alternative financing sources aren’t being taken advantage of enough. Crowdfunding sites tend to provide relatively low-interest rates and enable access to capital for all sorts of businesses including those just starting out.
So even if your business does not qualify for traditional small business funding from business loans, there are more options available to you today than ever before as long as you’re willing to get a little creative.