November 4, 2009
| Category: Business Cash Flow
| Tags: Small Business Credit Advice
Many small businesses have trouble getting the start-up capital that they need. Without a long list of assets or a proven track record, there is no way to show banks exactly how promising your soon-to-be bustling business really is. Luckily, there are places you can turn to for money when the national banks turn you down. Here are just five of the many places that other small businesses just like yours have found the start up finds that they need to get off to a great start.
Credit unions and other local financial companies. Many smaller local banks and credit unions (credit logos) offer special loans for local business owners that may have lighter restrictions than the larger, national banks. This can offer a huge advantage for small business owners. First, you will be competing against far less people because of the smaller regional area. Second, a credit union or other local bank will be more likely to want to help your community by putting funds into businesses just like yours.
Grants. That’s right; the government as well as private organizations have help for people like you who are looking to open a new business. These are often targeted at certain minority groups or specific high demand fields, but you can search at many websites to see if there is one written especially for you. Although grants take time and a certain amount of expertise to write, they are definitely worth the effort. Best of all, you don’t have to pay back grants, allowing you to open your doors without being saddled down with numerous payments before you’ve even made a dime in profits.
Government loans. Government loans are usually administered by the Small Business Administration. There are several options, but the two most common are either getting a low interest loan directly from your state or the federal government, or getting the government to guarantee a loan, which makes banks more likely to give you the start-up loan that you need. Either way, you pay taxes, so you deserve to have access to the funds when you need them.
Credit cards. This is not an optimal option, but often it is the only one available. It is easier to get a credit card than a formal loan, but they function in much the same way. Just make sure that you are aware of the particular terms of your card, and that you are capable of paying off every penny that your borrow before the interest builds up.
Family members. Many people are embarrassed by asking family members for help in starting their business, but there is no more reliable source of funding logos for new business owners. When the banks don’t believe in you, your family still will. Not only that, a relative will be more likely to allow a flexible pay-back schedule and less likely to charge outrageous interest.
If you are opening a business, don’t sell yourself short by going without necessary funding. If the large, national banks won’t finance your dreams, that must not stop you. Look into these five nontraditional funding sources as well as a nontraditional way of marketing and any others that might be able to help you along in your dream.
