3 Alternative Small Business Loan Options
If you’ve struggled with trying to get a bank loan for your small business, you’re not alone. Often it’s impossible for startups to obtain bank loans until they have demonstrated a track record of success.
Sara Angeles of Business Insider wrote an article outlining three other options for financing your small business. She offers highlights from a recent webinar offered by columnist Gene Marks and a panel of small-business financing experts.
3 Alternative Forms of Financing for Small Businesses
1. Crowdfunding is a platform for requesting contributions from many individuals. Typically “backers” will receive some benefit by donating, loaning, or investing in a particular business project. In most cases, however, backers will not become co-owners or get equity in the business venture.
2. Microloans or Microfinancing involves obtaining small loans that are used to cover operational costs, such as supplies and office furniture. Kabbage, for example is a financing company offering microloans of amounts between $500 and $100,000.
3. The SBA (Small Business Microloan Program) does not directly finance individual businesses. Instead, it gives money to local non-profit organizations which then allocate loans to local businesses of their choice.
Preparation is Necessary to Obtain Funding
To prepare your business to qualify for funding, Marks and his financing experts suggest you have a strategy that includes:
• Determining the exact amount you need to borrow initially.
• A sound business plan with solid financial projections.
• Research into the current state of your industry.
• A quality resume and knowledge of your credit score.
• Meetings with the SBA and attending their training courses.
A Strong Online Presence
A positive online presence is important in building faith in your company. Pay attention to how your company is rated on Yelp, Angie’s List and Trip Advisor, to name a few. Lenders will be using such sites to evaluate the health of your business.
To read the original article in its entirety, please visit Business News Daily.