Literally the biggest challenge any new business faces is getting the financing it needs to get going. Unfortunately, loans are not easy to come by these days, especially if you lack good credit. However, there are some alternative options. You don’t necessarily have to apply for a traditional loan from a bank or go through the SBA. There are several online lenders, for example, that offer small business loans for new businesses.
Microcredits are a good example of an alternative financing solution. While these are typically reserved for nonprofits, some people who would not normally qualify for a traditional bank loan may still be able to obtain funds from microloan lending organizations.
Another type of financing to look for is venture capitalists. These are similar to “angel investors” in that they have money to invest and want to invest it in young and emerging companies that can demonstrate that they have high potential for money growth and profitability. They also seek a stake in equity in exchange for their initial investment. At some point, venture capitalists will expect to make money from their investments, so they may want to have some control over how the company is run.
Is Crowdfunding Good As A Small Business Loan For Startups?
You’ve probably heard of crowdfunding, where startups can create a campaign to help raise money for their ideas and products. While this option can be helpful, reaching your financial goals in the time period when you really need the money is not easy at all. You’re really going to have to have a great marketing plan that gets a lot of attention from the people who have the money to give you.
There are several other independent organizations that offer small business loans for new businesses. However, there should always be due diligence on your part because you want to be sure that you are doing business with a real, legitimate supplier. Obviously, there are some scams, so you need to make sure you get involved with a legitimate company.
Take time to read all the terms and conditions carefully. Seek clarification if there is something you do not understand. Make sure those terms and conditions are suitable for you and your business needs. Whatever source of loans you go through should benefit you, not harm you.
Now that you know a little more about alternative lenders and online financing options, we recommend that you check with the US Business Fund. It has a very high approval rate for small business loans for new business ventures.