Small Business Loans: Thinking Outside of the Bank
For a small business owner, getting a loan is not the easier thing in the world. It becomes even harder if this will be your first business because you do not have any track record of success. While you can certainly visit a bank to see what rates they will offer you, it helps to think outside of the box a little bit. By reviewing all your options, you may find something that works even better for your needs. There are numerous ways to secure small business loans, so leave no stone unturned.
There are various alternative loans available. For starters, entrepreneurs can acquire merchant cash advances. This is when you receive a lump sum payment, and you pay off the loan with future credit card payments. This is advantageous because you pay less if you have a slow month. There are also peer-to-peer lending sites where you can connect with investors who may be interested in investing in your company in exchange for certain perks.
Another option you may want to consider in lieu of small business loans from a bank is look into more personal sources. If you have a lot of money saved up in your personal savings account, then you may want to think about using those funds to invest in your business. It is certainly risky, so make sure you weigh the pros and cons of such a decision.
Additionally, you can ask friends and family members if they would be willing to provide you with the necessary funds. Many entrepreneurs worry about damaging the relationship, so make sure you create paperwork laying out exactly how the loan will be paid back. Family members may not want to charge you interest, but it can be beneficial for you to offer to pay it to show you are serious about this business and that you do not take the loan lightly.
It is also a good idea to look into your local Small Business Administration. This organization provides small business owners with loans to get their companies off the ground. These loans are great for entrepreneurs who do not have any credit history and do not qualify for any bank loans. They do require a lot of documentation, so you will need to start the process well in advance.
Small business loans come in all shapes and sizes. Do not settle for a traditional bank loan when something better could potentially be out there for you to use.
