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Getting a small business loan can be difficult
in the current economy. Although banks
are still willing to lend money to get businesses started, if your business
venture does not the lender’s typical business model and your business is
deemed high risk, you may have trouble obtaining a loan. Fortunately, there are other options to
consider besides traditional bank loans to get the startup funds and equipment
that you need.
Equipment Leasing is one way to get the
equipment that you need without investing a significant amount of money
initially. You pay for your equipment in
monthly installments rather than paying for the equipment in full upfront. There are also tax incentives for leasing
your equipment.
Factoring is an option for getting cash. If your business will produce invoices upon
delivery of services or goods, then you may qualify for factoring. Essentially, your invoices will be sold for
cash so that you have the money before the services or goods are delivered. The cash is yours, and you won’t be making
payments to anyone, as factoring does not involve the lending of money.
Peer to peer loans are another option for
getting some of the startup cash that you need to get your small business up
and running. This program is available
through online sites, and you can get up to $25,000. With this type of lending, a group of your
peers will lend you small amounts; with the small amounts that are loaned by
each peer, the risk is minimal for the lenders.
With enough peers, you can get a considerable amount of cash that can be
paid back in small amounts.
Crowd funding is another option for financing
your small business. Unlike a loan, this
system works by bartering. There are
multiple sites online that offer crowd funding, and you can propose your
business on the site. Interested parties
will offer you cash in exchange for whatever you can offer them, such as
finished goods or your services.
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