How to Fund Your Business Without a Bank Loan
Statistics show that many small businesses are struggling financially due to the pandemic. However, some companies do not have the necessary qualifications to obtain a bank loan. Here are some alternative sources where you can obtain business funding.
Apply for a Government-Backed Loan
Although your company may not qualify for a traditional bank loan, you may be able to obtain funding assistance through the U.S. Small Business Administration. The SBA guarantees loans for small businesses, making it easier for companies to acquire them. For instance, the Paycheck Protection Program (PPP), which the SBA administers, helps you retain your employees in difficult times.
Approach Venture Capitalists
Venture capitalists are individuals or investment organizations that provide you with business funding in exchange for shares in your company. Keep in mind that once venture capitalists assist you with financing, they may want to help you manage your business.
Use a Business Credit Card
A dedicated business credit card allows you to obtain cash quickly, differentiate your business and personal expenses, build company credit, and earn rewards. To avoid further financial difficulties, always make credit card payments on time.
Obtain a Merchant Cash Advance
A merchant cash advance gives you business funding in the form of a lump sum that you pay back with a percentage of future credit card sales. This allows you to pay more when sales are up and pay less when sales are down. However, fees and rates are generally higher than for other forms of financing.
Invoice financing involves selling unpaid accounts receivables to a financing company. The lender advances you a fairly large percentage of the payments, and you receive the balance minus the financing fees after your clients have paid their bills.
Through online crowdfunding platforms, you can raise support for your business from interested backers. In return, the backers expect rewards in the form of interest on their payments, equity in your company, or first access to your business’s products.
For more advice on obtaining business funding, contact Quick Capital Funds.