Bank loans are a thing of the past for today’s merchants. From those with good credit, bad credit, no credit, and those in mainstream and “high risk” businesses, this is a risky way to get funds. While bank loans may be a no-go there may be problems finding an alternative business funding source – especially if your credit is not great. Fear not, because there are many ways to get the funding you need – without the hassle of a bank loan weighing on your mind and wallet.
Crowdfunding: This is risky, because it is not guaranteed that you will get the funds that you need. This is popular with charities and small businesses that have a big social media presence. Funds are solicited via social media, and not everyone obtains the amount that they set out to obtain. Another big issue is that the websites that host these fundraisers takes a percentage of the funds collected.
Home Equity Line of Credit: If you have a mortgage, you may have an HELOC which you can borrow from. While this requires monthly payments along with your mortgage, this is a great option for those who are playing it safe, and want to stay with a lender who they know and trust. While the interest rates are good and it is a tax write-off, defaulting on this means that you will lose your home.
Sell it: If you have something large of value and you do not use it, consider selling it. If you have a boat but never use it, or a vintage car that is just taking up space, the funds from their sells can be used to help your business needs.
Grants: This should be the first thing that you look for when starting a business – or when you are in need of extra business funds. A grant is given to those in certain demographics or those who meet certain criteria to help grow their businesses. It does not have to be paid back, but these are in short supply so do not depend on getting one right off the bat.
Merchant Cash Advance: For those with a merchant account, a simple solution for funding is their merchant cash advance program, which is a “buy in” program that is repaid back with every credit card sale that you make. This is great for those with credit issues because a credit score is not taken into account.