Financing Alternatives for Small BusinessesLinda Jenkins, February 22 2016
As a small business owner, there will be many times during the life-cycle of your business that you will require an infusion of money. If you have been running your business for some time, you probably know that trying to find financing through a bank is very difficult. In fact, only 30% of business owners successfully find funding this way. So, what are the other opportunities available to you?
This depends on what stage of business you are currently in, since many lenders require a financial history.
Here are some financing alternatives listed by stage:
Early Stage / Startup
One Spark - a unique in-person crowdfunding platform
SCORE - check this resource for mentors that can match your company to funding
ZimpleMoney - formalize lending from friends & family
One to Five Years
Angel Investors - Find investors through the Angel Capital Association.
Kabbage Working Capital - up to $100,000 for your online business
Bootstrapping - invest profits back into your business
Crowdfunding & Peer-to-Peer Lending - Learn More
All of the above, plus:
Merchant Advances & Purchase Order Financing - Learn More
Traditional Banks - loans & lines of credit
As you can see, the longer you have successfully run your business, the more opportunities you will have available to you. Once you find a lending resource, be sure you are aware of exactly what fees and interest rates will affect your loan over time (or, in the case of equity financing, how much ownership you are giving up and the implied valuation of your company). If possible, consult with a Certified Public Accountant and Attorney before signing any financial agreements.