In the past, bank loans were the only way to realistically get the money you needed but there are other options available to you that you may not have been aware of.
Even in this economy there are a number of ways to obtain financial backing for your business. Whether you are a start-up business or just looking for funds to assist with day-to-day operation expenses, knowing your options will help you find the best funding and can save you money in the long run through finance charges and interest rates.
Do your research and contact more than one lender but these are the most common ways to find the financing you need.
SBA Loans
The first place to search out small business loans is through the U.S. Small Business Administration (SBA). Locate a local office on the main website as way to get started.
They will be able to answer any questions you may have. Many banks are experienced in working with loans that are backed by the Small Business Association.
Bank Loans
To this day, bank loans are probably the most sought after means of obtaining a loan. Don’t settle on the first bank that says they are issuing loans.
Research the best finance terms multiple banks have to offer. You don’t want to put your business in the position of not being able to repay a loan so make sure you are getting a bank loan that you can easily pay back.
Just because a bank offers you more than you apply for doesn’t mean you have to accept it.
Obviously the more they loan you, the more you’ll have to pay back. That’s how banks make their money so keep that in mind too.
Microloans
If you are not seeking a very large loan amount, you may want to consider a microloan (small loans). Loan amounts can range anywhere up to $50,000 and the Small Business Administration can assist you in finding these lenders.
There are many non-profit community lenders in your area to look into first the SBA should have most of them listed on their site.
There are certain training requirements associated with these type of loans but they are very beneficial to start-ups and day-today business operations.
Investors
If you don’t mind giving away a portion of your company in exchange for the financial backing of an investor then it may be something to consider.
Investors have a number of ways and terms to extend money to your business. Most investors want to see their return on investment fairly quickly while others work on a long term basis. This is something you’ll want to discuss with them.
When in Doubt
If you are unsure of the type of financial backing you should seek out, consider finding a small business consultant or accountant that can explain each option to you.
Last but not least, don’t give up. Just because one bank, investor or backer denies your application doesn’t mean that all of them will.
Summary
No matter your reason for needing a loan or financial backing for your business, there are many options out there. Here are some of the best ways to get money for your company.
