How to Find Alternative
Regardless of what type of business you run, you’re probably going to need the help of your bank or another lender in order to get the cash you need to grow and develop your bank properly. Traditional bank loans, however, can be extremely difficult to obtain for even the best businesses. That’s why you may need to rely on alternative financing options as a small business owners. There are many to choose from, each with their own pros and cons. Some of the most popular alternatives to bank loans that you might want to consider include:
Factoring is one of the most popular options for alternative financing out there. That’s because it’s typically an easy, debt free way to get a business the cash it needs. In this arrangement, you agree to sell your accounts receivables to a factoring company at a small discount. This can get you the cash you need right away, rather than forcing you to wait months for the much-needed money. Furthermore, since it’s a transaction rather than a loan, you won’t find yourself smothered by hefty monthly repayments.
Another way small businesses like yours are able to make and save money is by utilizing the equipment-sale-leaseback method. When using this type of alternative financing, a business owner elects to sell equipment they own to another company, who will then lease it back to the original owner. This provides a significant amount of cash up front, and provides owners with an extremely manageable way to keep their equipment in working order and up to date in later years. This is an especially good idea for businesses that rely on large, expensive equipment, such as restaurants or construction companies.
Merchant Cash Advance (MCA)
If you don’t mind taking on debt to get the cash you need, an MCA might be the way to go. During this arrangement, you take out a loan from the company that handles your debit and credit card transactions. Rather than repaying the loan through large monthly payments, you’ll instead give a specified small percentage of each card sale to the company. This payment plan can be much more manageable than others, and a slow day will not send you into financial turmoil, since the payments are only made with a small percentage of each card sale.
Each of these alternative financing options have the potential to help your business become the best it can possibly be. The trick is, of course, working with your lender and assessing your financial goals in order to determine which route is the right one for your venture.