In the past, the only way to get extra money for your small business was to get a loan from a bank. However, getting approved for these “traditional loans” is not always an easy task. The process can take a long time, and your loan amount may be smaller than you need.
The good news is that a bank loan is not your only option. If you don’t qualify for one or are just looking for something different, there are many alternatives to help you get your hands on the money you need to grow your business. Take a few minutes to learn more about the various small business financing options available for entrepreneurs.
Crowdfunding
You may have heard of Kickstarter, Patreon, and GoFundMe, all of which are popular sites for crowdfunding. Crowdfunding is a type of alternative business funding that began in the United States in 2000. Crowdfunding is the practice of funding a project by raising small amounts of money from a large number of people via the internet. So basically, you are getting money from possibly hundreds of thousands of investors by marketing your projects and services online. You rely on these investors, and in exchange, you may offer them some type of perk, such as equity in your business. Keep in mind that crowdfunding only works when your project catches the interest of many people, and it’s not a great way to secure long-term financing.
Online Loans
If you have bad credit, it can be hard to get approved for a loan from a traditional bank. That’s why many business owners consider online loans as good small business financing options. Online loans often have less stringent requirements. Because you can apply for them in the comfort of your home in just minutes, they are convenient and highly accessible.
With online loans, you don’t have to wait weeks to get approved. In many cases, you can get funding within 24 hours. Plus, there are many loan options such as term loans, lines of credit, and invoice financing. However, be wary—the interest rates can be high, and payments can be inconsistent and never-ending.
Business Credit Cards
Credit cards are nothing new, but many business owners don’t think about them when they need extra money to pay for business expenses. But business credit cards can be a great source of alternative business funding when you need to make big-ticket purchases and have the credit limit to do so.
While some credit cards have high-interest rates, not all do. Do your research to find a card that meets your needs. Look for one that has no annual fee and offers rewards (such as cashback).
Some even offer 0 percent financing for a year or longer. Do note that most business credit cards require good or excellent credit.
Grants
Small business grants are one of the best financing options for a business because they are essentially free money. They are typically funded by the government and available to help entrepreneurs with their financial needs as they get established. Grants are also a good option for established businesses that want to expand and need a little extra money to do so.
The good news is that grants do not have to be repaid, unlike loans. There are many grants available, especially for women and veterans, and there are sure to be some that apply to your business. However, keep in mind that grants are very popular—and for obvious reasons. Therefore, searching for grants and getting approved could take a long time.
Business Equipment Financing
Do you need money for equipment? Instead of opting for a broad business loan, consider a lease specifically for business equipment. Leasing equipment is a great way to pay for equipment gradually over time with set, scheduled payments. Unlike leasing a car or an apartment, at the end of an equipment lease, you’ll have a purchase option, so you can own your equipment forever.
Be careful though: Payoff options can be expensive. Look for an equipment lease with low monthly payments and affordable and simple payoff options–like Clicklease.
Clicklease offers business equipment financing by connecting equipment sellers with small businesses. All credit scores are accepted, and you can get approved for up to $25,000. Learn more and get started today.
Invoice Factoring
Invoice factoring is a type of financing that’s ideal for small businesses that have cash flow problems due to unpaid invoices. How this works is that the invoice factoring company helps free up cash for your business by purchasing your unpaid invoices. The company will typically give you up to 95 percent of the value of the invoice and then collect payment from your customer. You will then be sent the remaining amount, minus a fee (up to 5 percent). While the fees can be significant, invoice factoring can be worth it if you need cash now and don’t enjoy collecting from customers.
Contact Us Today
Banks and high-interest loans are not always the best financing options for a business. Clicklease offers small business equipment financing plans that fit your needs. Learn more about how you can finance with Clicklease for the best equipment and small business options.
