Creating a new business comes with lots of new tasks. One of the most vital of these is securing the financing you need to get your business up and running. Here are four common sources that people use to secure their financial backing when getting started.
Personal Loans
If you’re very new to the business world, then it’s likely you’re going to be fighting an uphill battle to receive the funding you need. If you have great personal credit, then you can opt for securing a personal loan to fund your business. This can allow you to receive the financing you need right now to get your business credit history established for future funding needs.
SBA Loans
If you have trouble receiving financing based on your own merits for your business, then a SBA business loan may be the answer. These loans are given to businesses who have trouble receiving traditional financing based on their own merits. SBA loans are offered at various financial institutions across the country. You’ll need to apply through one of these institutions as the SBA doesn’t offer these loans directly to consumers.
Opt for a Microloan
If you would rather skip over the traditional bank funding, you can opt for microlenders. These are non-traditional lenders who loan anywhere from 500 dollars to 35,000 dollars to borrowers. The application requirements tend to be much less strict when it comes to these microloan lenders. They will base your funding decision on how well you present your need for the funds and what you’re going to utilize them to do. You can get connected with microlenders online.
Invoice Factoring
When you’re just getting started, having the money available to pay your suppliers is a must. However, that’s not always possible when your customers don’t pay you right away. To fill the gap in time between when customers pay you and you pay your suppliers, you can opt for invoice factoring. This is a tactic that allows you to get money from your unpaid invoices when you need it. For a nominal fee, the invoice factoring company will upfront the amount of your unpaid invoice. They’ll then collect on that amount from your customers in the set period.
These are four great tactics that you can utilize to fund your new business. It’s important to realize that everybody’s business is different and your personal credit situation may be different. By understanding what your needs are and what financing options are available to you, you can better succeed in getting the funding you need for your new startup business.
Addy Reeds is a freelance writer from Eugene, Oregon. She discovered her passion for journalism while attending the University of Oregon. Follow her on Twitter and Facebook: @addyreeds1; https://www.facebook.com/addy.reeds