How Entrepreneurs Are Using Alternative Financing
One of the most daunting tasks any entrepreneur faces is securing necessary funding to get a business or project off the ground. For newer entrepreneurs especially, it can be difficult finding enough cash on hand to start a business. Fortunately, there are many sources of financial assistance available to help you. While traditional financing such as small business loans are an option, many entrepreneurs are turning to alternative financing to make their dreams a reality.
Online Lenders
If the big banks and financial institutions have turned you away, don’t give up. Business owners have found great success with online lending. Not only can an online lender give you assistance where banks may have rejected you, but the process is much swifter and hassle free than you’ll find with traditional financial institutions. In fact, with online lenders, you can complete an application in an hour or less, and approval can come the same day you apply. Within a few days, you can have the cash in hand that you need to jump-start your business.
Venture Capital
Most entrepreneurs are familiar with this method of alternative financing. Venture capitalism is growing in popularity and prevalence among business owners in all sectors. This method is designed specifically or startups that appear to have high-growth potential. The risks are high, but lenders see large profits. Your company could secure millions from venture capital lenders.
Factoring
Also known as accounts receivable financing, this method has been around for a while. It not only can give you a quick boost to your bottom line, but it can eliminate stress and extra tasks in your business. With factoring, you sell all your outstanding accounts receivable to a third party, known as a factor. The factor pays you a discounted rate for the accounts and then assumes responsibility for the collections. The approval process is fast and simple, and you can have cash within days. Plus, you no longer have to worry about the sometimes-frustrating job of collecting from delinquent customers.
Grants
In certain industries, grants are an excellent way to get the money you need for your business or project. This alternative financing is appealing because it’s not money you’ll ever have to pay back. If you are engaged in research or operate in certain types of sciences, check with the federal government to see if you qualify for any grant money.
With alternative financing, you can secure the money you need. If you’ve failed with traditional methods, try one of these options.
