If you are trying to run a small business, you have probably already come across a number of different obstacles. Small businesses are hard to get off the ground and even harder to keep running, but they can be extremely beneficial and rewarding, if you are able to succeed.
You can pretty much just forget about trying to apply for a loan, since most banks stopped giving out loans to businesses with no collateral. However, this does not mean that you are out of luck, because there are ways to grow and expand your business without getting a bank loan.
Below, you will learn about these different and unique methods of finding funding for your business.
Consider Factoring For Your Business
Every business will have an accounts receivable account. This account shows the money that is owed to you by your clients and customers. Sure, if this account is high it is going to look good on paper, but the problem is, you aren’t about to actually receive any of that money right away. However, you can use what is known as factoring to sell your account receivable to a third party.
Factoring basically means that the third party will pay you cash for your accounts receivable account. You will receive cash right away instead of having to wait years to accumulate that money. This is great for receiving money quick and fact, but the only problem is that factoring can be expensive.
In most cases you will miss out on around 15 percent of the total worth of your account. This might be a good method for an already up and running company to quickly acquire some cash, but for an up and coming business, you might want to look at other methods.
You might be surprised to learn that the government offers free money to people who are looking to start small businesses. However, sometimes this free money comes along with strenuous and harsh stipulations. Any type of grant like this must be appropriated through the White House and Congress. This usually means that the grant has to be tied to specific government agendas. Along with this, the government has very strict rules about whom it funds and what these funds can be used for.
Find A Business Partner
Nearly everyone would love to start a business, but they do not have the funds available to make it happen. However, this does not necessarily mean that you should give up on your dream, because there are other people out there with similar goals. If you can find a reliable business partner with a decent amount of money, you will be able to make your dream a reality in no time at time. In fact, by bringing on a partner you will have someone to share the responsibilities of the business and financial expenses.
The best place to find something that has the same business interests as you is business seminars. Here, you will find likewise people that are financially stable to undertake such a project. Just make sure you both sign a non-disclosure agreement so that you can keep your business ideas safe. By relying on this individual to help you start your business, you will have peace of mind in knowing that your dream is only a short distance away. If you go this route, be sure to enter into a partnership or shareholder agreement prior to signing on the dotted line.
Internet-based Business Loans
Another great way to secure the funding is through an internet-based business loan. There are web-based financial institutions provide consumers with quick small business loans with no collateral, but the borrower will have to be convincing.
You will have the option of choosing from a Peer-to-Peer lender, crowdfunder, (high interest) online lending institution, and many other Internet-based lenders. As always, you will want to look for a lender that will offer you the lowest interest rate possible and have a strong, positive reputation in the community.
Need more funding methods?
Business funding options are abundant. If you need more options to consider, please go to our Business Funding Guide to explore funding types available for businesses of any sizes.