Everyone knows starting a business requires a large sum of capital and few of us have enough cash on hand to do it without looking for outside help. To many, bank loans are usually the first option that comes to mind, but they’re far from the only option. Whether you are looking for funds to start a brand-new business or to grow your existing company, there are many funding options available. Financing a start-up or small business can be hectic and difficult especially for those with poor credit. Although there is no standard minimum credit to apply for a business loan, traditional lenders have a range they consider acceptable. If you have a low credit score and no collateral to offer, consider an alternative loan. In this article, we will examine a few options of alternative lending.
1. Venture capitalists
Venture capitalists (VCs) are an outsider that exchanges capital for part ownership of a company, also known as business investors. The percentages of ownership to capital are negotiable and usually based on a company’s valuation. However, the benefits of a VC are not all financial. The relationship you establish with a VC can provide plenty of knowledge, industry connections, and a clear direction for your business. As mentorship is very important, therefore guidance from an experienced investor group would be beneficial to you.
Kickstarter and Indiegogo are crowdfunding platforms that give a financial boost to small businesses. Platforms like these are convenient as they enable businesses to pool small investments from several investors instead of just trying to find the resource from one single investment. There are a few platforms on the web that may require payment-processing fees or businesses to raise their financial goals to keep any of the money raised which of course is not at your advantage. So, it is important to read the terms and conditions of crowdfunding platforms before choosing one to use. One of the major benefits of crowdfunding is that it eliminates the application process. If you are urgent and looking for a quick investment from a few sources, this would be a good option for you.
3. Merchant cash advances
A merchant cash advance is where a financial provider extends a lump-sum amount of financing and then buys a share of your credit and debit card sales. Each time a merchant processes sales from either credit or debit, the provider takes a small cut until the advance is paid back. In terms of affordability and structure, a merchant cash advance is the opposite of a small business loan. As cash advances have a high expense and will cause cash flow problems, they should be the last resort even though it is a quick way to obtain capital. You should only consider this option if you struggle to qualify for a business loan.
4. Direct private lenders
Instead of having to rely on depositors or investors, private lenders use money from their own pockets to issue loans. This allows them to be extremely flexible in granting the application. In addition, they can equally be more flexible in the amount of money they lend per loan. Often, private lenders like Finsource Credit offers different types of loans such as clean loan, secured property loan & 2-in-1 financing that cater to your needs. As a leader in the industry, Finsource Credit’s loan amount is up to 10 million with a financing tenure of up to 8 years!
Are you looking to fund your business? Still deciding between various options? Don’t worry! Finsource Credit’s financial experts are ready to provide professional advice for free and always ready to answer your inquiries if you ever require one. Contact us today and get all your financing needs answered. We guarantee you a satisfied loaning experience.
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