10 Easy Ways to Get Small Business Loans and How to Choose the Right One
Lately my manufacturing has been in talks about expanding it operations to a bigger location going from a 7200 sq ft building to a 10,000 s ft building. This would allow us to bring in more equipment, more workers, and overall more business.
Putting the word out like this has led to a lot of lenders contacting us about loans for my business but the problem is that not all of them are good.
However growing a small business requires new sources of capital. So in this article I’m going to cover ten smart ways to fund your small business as you attempt to transition into a larger company.
#1 Leverage Your Assets
Your work life and your home life blend together already. If you want to become successful in your business endeavor, be brave enough to invest in yourself. Liquidate your savings and money market accounts to fund your growing enterprise.
I’ve personally done this in the beginning but have not considered it at this stage of my business but it is definitely an option.
#2 Add Partners
If your assets are not enough, consider asking friends, co-workers, and known acquaintances to aid you in the company’s growth. Exchange a piece of your business for some investment capital. Having more allies is always a net positive.
This is one thing I did early on when I was getting started is I brought in a partner and it has been a big help financially and in other ways as well.
#3 Angel Investors
Research potential angel investors in your area. These people provide capital for projects they believe can expand into lucrative money-making enterprises.
In addition to growth capital, these entrepreneurs often have wisdom and experience about the successful evolution of small businesses.
#4 Crowd Funding
Sites such as IndieGoGo and Kickstarter exist for people as ambitious as you. Complete strangers want to aid in the creative process.
While they may lack your corporate vision, many have the capital you need to build your empire.
#5 Government Programs
Growing local businesses embodies a key part of our government. There are many assistance programs that exist solely to help people in such situations.
Investigate funding options at the federal, state, and local level to determine the programs for which you can qualify.
#6 Trade Credit
Some company purchases don’t require immediate payment. Instead, you agree to pay the bill at some point during a jointly accepted period of time. Many businesses are willing to accept this form of trade credit in lieu of cash.
Capitalize upon your established reputation as a small business by working out deals with current and potential customers.
#7 Customer Loans
If you have a trustworthy reputation within the community, ask for customer loans. You may convince some of your customers to pay in advance in exchange for discounted or free pricing on future transactions.
#8 Credit Cards
This idea is dangerous due to the nature of compound interest. If you have easily achievable revenue goals in the short-term, however, leveraging your credit power to gain access to additional funding can be a smart move.
As long as you earn money at a better pace than the daily interest accrued from the credit card, the strategy works.
#9 Business Loan
While getting qualified for such a loan is difficult, you should still attempt this tactic. Banks have more investment capital than almost anyone else with whom you discuss lending. If you have lackluster credit, consider business funding from Bad Credit Business Loans.
I have personally taken a business loan and it has worked out well for me. I find this to be a great option but like I mentioned it can be tough to get if you don’t have a positive cash flow for your business.
#10 Microloans
One of the least publicized loan types, microloans are among the most effective. The federal government disperses funds to nonprofit community organizations. These groups are empowered to offer capital to the companies they believe are best positioned to aid the area.
Having enough money to pay the bills is critical to a company’s sustainability. Research these loan types to find the best one for your business.
Bonus
After publishing this article I thought of one other way to get capital for you business that I have used in the past and that was a business line of credit. You can can learn more about them here. This is basically a revolving loan that allows you to get that extra cash when you need it.
These loans don’t typical lend huge amounts of money but it could be an extra $30 to $40k if you need it to get business to that next level.
Final Thoughts…
As I wrap this article up have you ever done any of the options above or are you thinking about one of the options above?
While I’ve done several of these options my goal is never to take much debt on as a business owner but at times it is necessary. Take a moment and share your thoughts and comments below.
