Startups and often small businesses need some extra cash or finance to keep the business running smoothly.
Most of the times banks are considered the best sources of finance but for many businesses getting loans from banks is not that much easy. So, they have to seek some alternative sources of finance for their business.
If you don’t want to get loan or finance through some banking channel or from any banking institutions, then there are some other ways as well.
You can try these sources or ways to get some extra finance for your business.
Factoring is becoming the most popular among the small business owners.
It’s is one of the quickest ways to get the loan for your business survival.
Factoring is selling your debtor account to some factoring company. The factoring companies normally pay you up to 80 to 90% of the total value of your accounts receivables, and hence you get an instant infusion of funds for your business.
The reason for the popularity is the processing time and the interest rate which is normally lower than other financing options.
There are lots of individuals who have lots of capital, but they don’t want to involve directly in any business activity.
So, they seek some business to invest their funds to earn a reasonable profit.
Most of the times you can find such investors very easily in your friend circles, but sometimes you will have to contact some intermediary company which can arrange some investor for you.
Getting loan directly from the investor is a good idea as you can negotiate on the terms in a friendly manner. Investors are just concerned about the profits, and once they find your business profitable and trustworthy, then good news for you is that you have found a good source of funds for future as well.
Private Financing Companies
If you can’t find an individual investor, then you can get from the private financing companies.
There are several companies which offer business loans at easier terms than any banking company. You can find some best business loan companies in your city.
It’s better to Google for the best business loan companies to find some good companies. The good thing about searching online is that you can find reviews for each company.
Reviews can assist you in finalizing the company to get the loan for your business.
Small Business Administration Loans
If you are resident of the United States of America, then you may have another option to get finance for your business.
There are many financing schemes offered by the United States Small Business Administration. You can check out on their website for the qualification criteria.
If you fulfill their criteria, then you can apply up to $50,000 loan. The interest rate for the loans arranged by Small Business Administration is normal market competitive, i.e., between 8% and 13%.
The only drawback is that this process of getting finance is bit slowe