“Everything started as nothing.” – Ben Weissenstein, founder and CEO, The Entitled Group
There are many ways for entrepreneurs to finance a business, and we have discussed a handful of them in the past. Let’s resume this discussion, and explore some more methods
SBA Loan
One tried-and-true method of raising capital is securing a Small Business Administration (SBA) loan. This is a long-term, low-interest loan guaranteed by the government. Oddly enough, this is where your failure to secure a loan elsewhere is your strength, because according to the law, the SBA cannot guarantee loans to businesses that can obtain a loan on their own. Of course, it’s not that cut and dried, so visit here to learn more.
In case you cannot secure an SBA loan, here are a few decent financing alternatives.
Business Credit Card
Have good credit or want to help build it? Apply for a business credit card. They are available through banks and credit companies. These are musts for owners anyway, if only to be used for general operational purposes. But if you’re on the way to landing the first big client, sale or opportunity, this is a good way to go. The cards give you access to large lines of credit and are especially useful in case you decide to go another route. This could include…
Merchant Cash Advance Providers
When you’re in a hurry to get up and running, consider a merchant cash advance provider.
This is an advance payment against your business’s future income. The merchant cash advance provider is a non-bank lender that gives you a lump sum, which is then repaid automatically using a percentage of your daily credit card receipts. You typically don’t need perfect credit and can apply online directly with a provider. It’s important to note that this route will not help build credit, since most providers don’t report this activity to credit bureaus.
Unsecured Business Loans
Don’t let its title fool you into feeling insecure. You’d seek an unsecured business loan because your entity is so new that you haven’t acquired any assets, which is why you do not need to put up any collateral. The main gripe is that interest rates are higher than others, but on the flipside, the terms and conditions of an unsecured business loan often offer some flexibility.
Securing a loan from the government or in the private or the public capital markets is one of the most complex challenges that any company faces. While we don’t raise money for clients, contact Brinen & Associates to discuss the needs of your start-up or if you have a complex operating history.