Are you serious about the growth of your business? Well, as a small business owner you are bound to face several challenges where you’ll need an immediate solution. While a conventional loan is seen to be the best option by the entrepreneurs, but banks may not be always interested to help the small business owners. Also, if your business has reached point where you are unable to meet the stringent conditions laid down by the banks, then you need to think upon other options like selling of personal assets, stealing from personal savings or borrowing loan from family members and relatives. Sure these options are handy, but there is several other alternate source of funding to choose from. If you are willing to give alternative funding a chance, here in this post we have presented some options to cater your business requirements.
Alternative Options available for small business owners
Asset based lending
Asset based lending includes using assets as a collateral against the loan that you wish to borrow. In simple words, asset financing company becomes the owner of the assets until you make the payments. With asset financing, you can select hire purchase or lease.
Line of credit
This kind of solution helps the business to meet short term expenses like buying of equipment, expanding the inventory, covering the costs, etc. Line of credit loan is akin to a credit card where you are given access to particular amount of funds that you can use it. Regular payments are made by the financing company and you can withdraw the amount as much as you want. Interest will be charged on the amount withdrawn. Note that interest on line of credit loan is bit higher than prime lending rate, but lower than credit card.
Invoice factoring– this kind of option is best for B2B companies. In this case, the invoice copy is directly sent to the lender who pays the full amount after deducting the charges as applicable.
Final words about Best Business Funding Solutions
As banks have a strict criteria for approving loans, small business owners can find it difficult to raise the funds for their company. On the other hand, alternative source of funding have flexible terms that can be further tailored to meet individual requirements. Alternative lenders process loans faster as compared to traditional methods. So, don’t make a mistake of thinking that bank is the only way to cater your business requirements; interest rates put by the banks may be attractive, but it is not the only source. So, don’t get disheartened if bank rejects your loan.