If your business is doing well, there will likely come a time where you need to raise funding in order to expand and grow further. While the traditional route of applying for and securing a business loan from the bank remains attractive to many business owners, this process is not always easy. For many small business owners, getting a business loan from the bank is downright impossible, so it’s a good idea to consider some of the alternative business funding methods on offer. Here are a few options to consider:
Alternative Small Business Loans:
Banks aren’t the only lenders that offer loans to small businesses. There are many other reputable organizations that provide a range of different funding options for a small business. You may be able to secure a loan through a lender that specializes in short-term loans based on your stock or trading, for example, or you might have access to factoring, asset finance, or another type of short-term business loan. If you are considering alternative lending, be sure to spend some time researching the options in-depth in order to determine the right option for you and your business.
Angel investment can be a great option for funding a small business with strong potential for growth. Potential investors will consider the future prospects of your business along with its current performance. And, angel investors usually understand that many small business owners might have limited experience but can still sometimes go on to build very successful companies. If you are thinking about pitching to an angel investor to raise finance, you should conduct thorough research in order to shortlist ideal investors for your business before reaching out to them.
Peer-to-peer (P2P) lending is another alternative way of borrowing money for your business without the need to go to the bank. P2P lending services tend to operate in online marketplaces where businesses and individuals that want to lend money are matched with businesses that need to borrow. Some services spread the investment out among several borrowers while others allow the lenders to choose certain businesses to fund.
Although it may not be the best method of securing all the money that your business might need in order to grow, it’s still worth researching all the potential grant schemes that might be available to your business. Spend some time researching government grants at the local, state, and federal levels so that you can identify and apply for the grants that are the most appropriate to your business. Some grants are designed to help more companies in a certain industry grow while others will be designed to help you cover the cost of taking on more employees in order to improve jobs in the area.
When it comes to getting the funding that your business needs to grow, the bank isn’t your only option. Consider any alternative methods of getting finance and determine which one is the right option for your expanding company.