High competition in the small business space means no owner can afford to be without cash or adequate funding for long. Dried up funding means the life of business is only short lived. It is thus important for owners to be well informed on how to get your business funded, and today there exist several new and innovative ways to do so.
The funding environment for small businesses today looks healthy, all because of the new and alternative financing options available via online platforms. Big banks have gone risk averse in the last decade, and thus small ventures have come to rely on alternative financing options, including inventory financing, pay day loans, merchant advances, or equipment loans. Although the interest rates here may be higher than conventional bank loans, there is no denying the speed at which funding can be obtained.
Invoice factoring is an attractive option for venture with a healthy revenue stream. Unpaid invoices need not lie as such, and can bring funding by being traded with lenders. The same can be done with inventories as well. Invoice factoring allows a business to make use of its current operations to generate funds for the future.
Those with a creative bent of mind can start a crowdfunding campaign to raise funds in small amounts. Popular crowdfunding platforms attract a huge number of donors who want to support and fund interesting businesses and promising ideas. The campaigns however must reach their prefixed amount on some platforms, or the collected money is returned.
Another useful strategy is to keep an eye on angel investors in one’s community or network. Angel investors do not need a perfectly going business or proof of revenue streams. They invest and take a stake in the business where they see promise of future returns.
Payday loans are also a way to come out of immediate cash requirements. The loan is sanctioned in hours without long paperwork, and has to be repaid in a short duration. These are high interest loans and meant to be used for emergencies.