Any business owner, new or established, will tell you that one of the most difficult parts of running a business, is finding the capital to keep it going. During the first few years of establishment, many companies fail simply because they don’t have the money to keep going.
Essentially, you’d think it would be as easy as applying for a bank loan, however, that isn’t always the case. Sometimes, bank loans can be challenging to get approved for, leaving entrepreneurs to find alternative solutions. If you’re in the same boat, you might find these ideas to be beneficial.
Online Lending Companies
Traditional banks are regulated by the local and federal government and, therefore, have stricter guidelines for borrowers. In most instances, unless a business has been established for years, has a track record of revenue, and collateral, the likelihood of getting approved for a traditional bank is slim.
Online lenders, on the other hand, have more options, and are more lenient to entrepreneurs. You can search for business financing options online for a list of lenders who cater to small businesses. There are typically two options available to you which include a business line of credit or a small business loan.
· A business line of credit works more like a credit card. Requiring the same application information, eligible applicants will receive an approval for a line of credit. The funds can be used all at once, or in increments as it is needed to run the business. Unlike a small business loan which must be reapplied to, a line of credit can be used as often as you’d like if the balance is repaid.
· A small business loan is a loan provided to new and established companies. Online applications are available to fill out 24/7. Applicants will need to provide pertinent information such as financial statements and their credit background. If approved, the loan is deposited into your account for use. The loan with interest must be repaid within the agreed upon amount of time.
To be approved for the above-mentioned business financing options, it is generally required that you have a fair credit history and some record of earning revenue within the past year from the business. Fortunately, most online lenders do not require you to have collateral.
For entrepreneurs who don’t have any traction yet with their business, getting funding from lenders could prove difficult. Sometimes, all it takes is a little effort on your end to get things going. Then once you’ve gotten established, you can try again to get additional funding from online lenders. Below, are a few suggestions on how.
· Scale back personally. Check your personal budget to see where you can cut back on spending. Then use those additional funds for the business.
· Use free tools. There are a lot of free tools that can be used to start a business. Until you’ve got the funding you need, consider free or affordable versions to get by on and upgrade later.
· Be thrifty. You don’t have to have a luxury office desk, chair, and computer right away. Instead, start with what you have around the house. Even if that means your home office is the corner of a dining room with a wooden stool and table for the first few months.
· Be a jack of all trades. To save on cash, it may be best to complete as many of the tasks you can on your own. There are online tutorials and guides that can help you learn a plethora of things quickly.
Do you have any other talents you could put to use? Nowadays, it’s easier than ever to make money on the side. You may be able to get paid for your talents and use this money to start your business. It doesn’t have to be anything taxing or tedious, it simply needs to be something that can start generating cash flow. Some ideas might include:
· App developer
· Pet sitting
If you have an idea that you believe is the makeup of a successful business, don’t let something like money get in the way of launching your dreams. When banks turn you down due to less than perfect credit, lack of collateral, or the inability to show revenue, there are other options available. Think outside of the box to find ways to get the cash you need to start your business today.