One of the things every business, small or big, needs is money. Without a sound bank balance and a steady cash flow you can pretty much expect your small business to run into some big problems in the near future.
Borrowing money from the bank with an agreement to return the money at a fixed time with a set interest rate is a common way most businesses get funding. But what if the bank denies your loan?
Here are 5 alternatives to raising money for your small business when the bank says “No”:
- Grants: There are several national and local sources of grant funding and scholarships available to help you start or expand an existing business or non-profit organization. These sources vary in their nature, and the amount of funding that they grant. Some give money directly to the individual, and others give money to other foundations and programs that use the funds.
- Equity Financing: In this financing option you sell a specific amount of stock or share of your company to an investor.
- Crowd Funding There are dozens of crowd funding sites out there. The popular ones are GoFundMe, Kickstarter and Indigogo. Crowdfunding uses the internet to help entrepreneurs find thousands of potential funders that each contribute a small amount of money as opposed to finding one person to invest a large amount.
- Private lending: Private lenders are somewhat the same as banks because they require the same information and the same data but the difference is that they specialize in lending money. They come in handy when the bank says “no” because private lenders will lend you the money if they see potential but usually charge more than the banks.
- 9 to 5: When you’re an entrepreneur often times your 9 to 5 is needed to fund your starting business expenses. There’s an old saying don’t quit your day job …not too soon at least. Although some may find there aren’t enough hours in a day to run their own business and work for someone else… there’s nothing wrong with a Boss Chick going out and getting a part time job to supplement her financial goals!
These are some of the most commonly applied finance options. You may choose to apply one of them, or all.. but it’s advisable to consult with a financial consultant as she can help you make the correct choice.