Funding Small Business
Financing a small business is a difficult task as many lenders are weary about taking on the additional risk that comes with small businesses. Funding for small businesses is available with the right type of lenders that commonly take on risk despite your lack of corporate credit and financial documentation.
There are a few different options available when you are looking for funding for small businesses, here are the most common:
1. Bank Loans these are the most common type of loans as you work with your local bank to finance the business. The downside to bank loans is that their lending restrictions are very harsh so it can be extremely difficult to gain approval. Banks that you have worked with in the past may not be as harsh with their lending restrictions, but it can still be hard for a small business to acquire the funds.
2. SBA Loans the small business administration has created a process where you are eligible to apply for funding if you have been unable to acquire funding through other lenders. SBA Loans do require you to satisfy certain requirements if you are able to gain approval for the loan. These requirements are based on your credit along with other factors like the amount of financing you need and the industry you are involved in.
3. Secured Loans in order to acquire funding for small business, you may need to offer some type of security for the loan such as your home. Secured loans require you to use some type of collateral for the loan that has enough value to cover the risk the lender is taking on when they offer you financing.
4. Loans from close friends and family members a great way to acquire funding for small business is to ask your close friends and family members for money. Although you may be hesitant at first, these individuals really do want to see your business become a success and they will be your best chance and acquiring the money you need to get your business up and running. Just make sure you hold to the repayment plan or you will damage your relationship with them.
5. Credit cards while no one really wants to turn to credit cards to start their business, they may be your only option. There have been a lot of successful businesses that were founded with credit cards so look for one that has a low interest rate and try to repay it as soon as possible.
by: Andy Kyle