Available Business Funding Sources

There are many sources who offer business funding today. Knowing the different sources will help you find the best funding options for your business.

Remember, most of these funding sources you can access right through your funding suite with us. So reach out to me to receive more information about the specific funding that will work for you and your business.

In the meantime take a look at some of the many sources of funding that are available today.

Business Charge and Credit Cards are a fast and easy way to access cash for business. You can use the money for any purpose, and you can be approved for business credit with no personal guaranty or credit check. Many merchants will approve you for individual credit cards of $10,000 or higher.

Angel investors have been responsible for funding over 30,000 small businesses each and every year. With over 250,000 active angels in the country you may want to consider an angel investor network to simplify your search. These investors are a great source of funding when banks won’t approve you, and perfect for projects where you need a lot of money.

Asset Based Funding is perfect if your company has collateral such as accounts receivable, inventory, equipment, purchase orders, or real estate. These assets can be used to secure the financing you need, and you can secure asset based funding even if your credit isn’t very good.

Bank Loans are still available, although they have become harder to get approved for. Many large banks tend to be much more conservative in lending so you may want to consider a community bank or credit union for a small business loan.
Equipment Leasing helps when you want to lease expensive equipment, and some equipment leasing and financing also works for you to borrower against existing equipment you already own.

Factoring is perfect if you have high amounts of account receivables. You can obtain funding up to 25 million and you can receive your advance within 24-48 hours in most cases. With factoring, you sell your company’s accounts receivables to a company (known as a factor) at a discount, in order to free up your cash. The company that purchases the receivables then assumes the responsibility for collecting them. This is a great option as they absolutely don’t care about your own personal credit.

Grants are a great way to get money for your business, especially government grants. Depending on your business types and intended use of funds, there are many options available for you to receive grant money that doesn’t need to be paid back.

Lines of Credit are perfect sources of working capital. A line of credit works like a revolving credit card but with much lower interest rates and higher available credit limits. You can get credit lines over $150,000 and write checks from the account or use a debit card to withdrawal funds or use for purchases.

Merchant Cash Advances and Merchant Lines of Credit are perfect for businesses who process credit card payments. This type of financing will advance you money against future credit card transactions. You can even get a debit card to use the funds you secure.

Microfinance Loans are less difficult and time intensive to qualify for with loan amounts ranging from $500 to $35k. Many businesses use several micro loans to get money for their business versus applying for one larger loan due to the easier qualifying criteria.

SBA backed Loans are still one of the most popular financing options available today. SBA backs, or insures about 80% of the loan while the lender lending the money takes on about 20% or so of the risk. Due to the lower risk to the bank, many major banks are more apt to lend money using SBA backed loans than regular loans.

Venture capital is neither easy nor fast to be able to tap into but can be a viable source of funding. This is a great source when you need higher loan amounts, and don’t mind giving up a potential stake in your company. Plus you don’t have some of the headaches that come with conventional funding.

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Struggles of Finding Business Funding and Advice on What to Do

As we approach the end of the year people start thinking about their future and what is next in their life.

Some people might decide to exercise more, travel to a new place, etc. Your New Year’s resolution is to take your creative idea and turn it into a business. Just like millions of business owners before you this will be an exciting time with obstacles that must be surpassed for you to succeed. One obstacle you must overcome is how are you going to fund your business? As a sole proprietor you may find that acquiring this necessary business funding may be nearly impossible.

The good news is the economy is showing sign of renewal; but, the market of small companies relies so heavily on business funding that it is recovering at a much slower pace. If you want to receive business funding for your start-up you must raise the level of your game to show investors that you are serious and mean business.

The first element that is necessary in obtaining the financing you need is a strong business plan. A strong business plans will show investors two key things; first that there is a market and a demand for your product or service and business projections based on actual numbers backed by trustworthy sources. An advantage to you for doing this research is it will provide a great opportunity to find whether this idea is worth your time and how susceptible it is to failure.

Unfortunately even with a strong business plan 90% of all businesses will fail within the first five years and financing companies are very aware of this fact. Therefore, besides a business plan financing companies must see what personal financing you are bringing to the table. If you expect a company to invest 100% of the money without you financing anything you are in for quite a surprise. Just think if you were asked to fund someone’s project and were asked to take all the risk without them taking any. You would not invest in them, why would you expect someone else to do the same?

Looking for business funding can be as hard as climbing Mount Everest until you know where to look. The government has different programs to grow the economy but unless you fit their guidelines and follow theirs rules your chances are slim and you will need to look for business funding elsewhere.

You can try to approach the local bank but business loans have become more difficult to obtain due to the economy and unless you have a stellar idea and have years of experience in that field the bank will not grant the loan.

Where to look then? My suggestion is to find a consultant that understands the ins and outs of business funding and whether your idea has the potential to be funded or needs to be reworked. When choosing a consultant; look for someone with experience with a wide array of funding options such as; business loans, capital venture, grants, corporate credit, etc. Lastly, make sure the business funding consultant has your business needs at the top of their priority list as finding the right business funding can make or break a company in the long run.

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Start-Up Business Funding – Tips for Changing No to Yes

All those relatives you approached told you they would love to give you money for your new business but just don’t have it right now. It’s the same story over and over again, but they have expenses of their own to cover and investing in a new business is just too risky. Your new idea is a sure winner, but you have to convince everyone else of that fact.

Entrepreneurs are notorious for having great ideas, a willingness to work and lots of enthusiasm. But what many of them really need is start up business funding that matches the enthusiasm in order to get the business rolling. Finding startup funding can be difficult and especially for someone who is new to entrepreneurship. It seems as if you are expected to have a proven track record to get funding, but you need the funding to start proving yourself.

Options Exist for Those Willing to be Persistent

Entrepreneurs often start new businesses with their own money, but it doesn’t take long before those funds are gone. If you were fortunate and family or friends invested in your enterprise, then you may have even been able to start the business. But it will not take long before you run out of funds and need new sources to continue growing the business. Early expenses include buying merchandise inventory, payroll and equipment. It would be a pity to get your business started and have it die an early death due to lack of startup funding.

There are multiple sources of funding available today, and you should apply to all that might be interested in your business. The best step to take is accepting help from a professional who has access to these funding sources. This is especially important given the right credit market. A professional help you identify the most likely funding sources and then assist you with preparing funding applications.

Following are the four major categories of start up business funding.

· Equity Partners – This type of funding relies on investors who fund a new business in exchange for taking a percentage of ownership. The ownership can take the form of a working partner or as a stock holder (if incorporating).

· Angel investors and angel organizations – Angel investors are people who use their private money to invest in new ventures. The investment may take the form of equity or debt. They are called angels because this type of funding seems heaven sent to an entrepreneur having trouble locating start up business funding. But these angels are actually experienced business people who can evaluate a new business idea with expertise. Angels are hoping to earn a higher rate of return by investing in start ups.

· Venture Capital – Money called venture capital is loaned by a firm or an individual. This type of funding is usually sought after for larger new businesses. The goal of the venture capitalist is to find businesses that offer early high returns. The investor will usually take an equity position which means you must share ownership. Even if that idea bothers you, don’t skip this form of financing because the final deal can be structured in hundreds of different ways.

· Business Loans – Money has been tight during the recession, but banks are lending. The news reports have discouraged many budding entrepreneurs from applying and that is a pity. If you apply to banks that have been lending throughout the recession, you improve the chance that at least one of them will approve funding. A professional can help you locate these lending institutions that exist around the world.

Assumptions Not Allowed

As you can tell, there are many types of start up business funding. Entrepreneurs today must aggressively locate new funding sources in a competitive environment. But you should never assume that money is not available just because you are a new business. Among the four types of funding – equity partners, angel investors, venture capital, business loans – one or more is going to be suitable for your new enterprise. And while you are at it, go ahead and ask your cousin Bill if he’s interested. Maybe he’ll say yes.

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Finding Business Funding – A Blistering Hot Topic

Just about everywhere you turn today, the topic of small business funding comes up. The National Federation of Independent Business (NFIB) has recently reported that the number of government backed SBA 7(a) loans have significantly dropped during the recession. In fact, only 41% of businesses obtained financing from all different sources while 16% were unable to get or didn’t ask for any credit.

You just can’t help wondering how so many businesses endured the recession when they couldn’t get any credit. But don’t be deceived by the numbers. Many of the 59% of businesses that didn’t get credit from traditional lending sources did get money. Their money came from angel investors and equity partners and others. There are plenty of businesses that could qualify for this type of funding too, but they don’t know how to ask for it.

Working Around Marketplace Inefficiencies

The money markets are inefficient in that borrowers and lenders can’t always find each other in a way that maximizes funding. That is why there is a marketplace that is made up of private funders who are willing to lend capital to businesses. These lenders offering business funding go right to the source making it more efficient for borrowers to find investors and lenders to find borrowers. Because traditional funding sources are making it so difficult to match lenders and borrowers, it is perfect conditions for a private business funding market.

It’s a fact the small businesses were responsible for creating 64% of new jobs over the past 15 years. That is astonishing and makes you wonder why traditional lenders like banks would cut off credit like they have. You would think they would insure businesses have access to funding, yet it’s known that trillions of dollars are just sitting in corporate accounts and on bank balance sheets.

The fact is that the conditions are ripe for private lenders to step up to the plate. The private lenders know there is an opportunity to offer capital to businesses and it’s a win-win situation. The lenders can offer business loans, venture capital or startup funding and earn an excellent return on their investments. The businesses get the money they need.

In fact, the private business funding market offers a greater variety of funding options. The big financial companies and banks aren’t lending so it’s left up to the free enterprise markets to provide the capital in other ways. There is a busy marketplace made up of private capital lenders and borrowers that include venture capital and startup funding. Those are two of the most difficult categories to fund. You can find angel investors, business loans and even equity partners.

Do You Know How?

One of the questions often asked is this: if there is funding available then why aren’t more businesses tapping into it? The answer lies more in borrower attitudes and lack of knowledge about the private lending markets.

· Don’t know the investors exist
· Don’t know how to prepare a quality business plan
· Don’t understand the size of the private market
· Don’t want to ask after being turned down so many times by large banks
· Don’t want to pay exorbitant loan fees charged to riskier enterprises

The thought of asking for money from equity partners or requesting venture capital is too intimidating for new businesses searching for startup funding. Let’s face it – going from bank to bank only to be turned down is demoralizing.

Using a central point for matching borrowers and lenders makes sense in many ways. It is an efficient market because of centralization. It a cost effective market because you don’t have to travel around the country searching for opportunities. But most of all, it offers funding solutions for businesses that are ready to startup or expand and that is good for the economy.

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