If you need working capital financing there are more ways to get it than the traditional method of going to the bank and applying for a loan. Contrary to what many people are saying, the availability of this kind of financing is actually better today than it was a few years ago. With many traditional financial vehicles not panning out for investors many are looking for other places to put their money. This adds the possibility of private financing for your business to that of loans from banks and credit unions.
If you are seeking a small business loan from a bank or credit union you’ll be surprised to find how many of them will be willing to compete for the privilege of giving you money. Save yourself some legwork and apply online. There are a number of websites where you can enter your company information and allow the site to shop your request around. Give it a few days and watch the offers come in. There are private, public, and independent investment firms that would love to help your small business succeed.
As another option, you can apply for a working capital line of credit from your bank or a company credit card. These are essentially loans but they are loans from which you only use that portion that will cover your immediate expenses. Each of them also allows you the option of paying back any outstanding balance within a short period of time to avoid interest charges. If you borrow money using a traditional type of loan agreement you may not have that option.
Small business owners also have the option of a SBA Microloan. The Small Business Administration has many loan programs that come with a guarantee for the commercial bank that is funding the loan. One of the best SBA programs is theMicroloan. This will give you working capital and help build your business credit rating.
Borrow, build, pay it off, and then borrow again. If you’re just getting started in business you will most likely follow this path. It’s very difficult to get up and running without some kind of assistance in the beginning. You’ll want to make sure that you don’t borrow more than you can afford to pay back and try to avoid going sub-prime if you have poor credit. The interest and fees will keep you in debt far longer than a traditional loan will. If you get refused by one institution keep trying and be patient. The right option for you is out there if you wait for it.
