Are you going through a rough phase in your business? Well, you are not alone. This problem is more common than you think. But committed business owners don’t give up in the face of small failures. They take every possible measure to pull themselves out of the crisis with the help of various fundings.
When it comes to finances, there is no such thing as one-size-fits-all. You’ll have to explore through the following options before you come to know what works the best for you:
Bootstrapping is a popular option to fund your business in case of an emergency. It can be counted as one of the safest alternatives because it includes the owner’s hard-earned money in the form of savings or home equity lines. So basically bootstrapping does not involve any outside investor.
Sometimes the owners are so occupied operating their business that they tend to forget exploiting this risk-free opportunity. Statistically speaking, 50 percent of the small companies crumble in the first four years. You can rely on loans once in a while but not frequently. To inject fuel in the life of your organization, bootstrapping skills are unavoidable.
Crowdfunding makes us realize how the internet has converted the world into a global village in the real sense of the word. Crowdfunding stands for raising online money for your project.
There are several online platforms dedicated to this purpose. If your project is worth it, investors would love to put their money. The process typically goes, you have to add the funds and the number of days required to raise that amount. It is not tough to find crowdfunding websites, each better than the other.
- SBA loans
The government supports these types of loans but don’t provide the loans directly to the borrowers. However, the state does guarantee a proportion of credit to the lender if the borrower faces bankruptcy. Since small businesses play a pivotal role in the economy of the country, therefore the government ensures financial support for small businesses.
Depending on your type of loan and amount, SBA can guarantee as much as 90 percent of the loan amount on behalf of a borrower. Given the assurance from the government, lenders willingly offer flexible terms which would not be otherwise possible.
Are you wondering that obtaining SBA loans would be quite a challenge? Not at all. Notably, the process of SBA express loan is pretty convenient to most of the borrowers.
- Look for partner
It is also a widely anticipated alternative when funds are hitting rock bottom, and you badly need money. Even if your business is doing poorly at the moment, it has done well in the past; a smart entrepreneur would venture to invest his time and resources on your project.
A good business credit history is undoubtedly going to help you to find a suitable partner because it shows your business has the possibility of growth in the future.
Factoring involves selling your receivables to the lenders and in return, getting money upfront. Remember, the borrowed money is just some percentage of your receivables, and it depends on the quality of your receivables that how much amount a lender approves you.
If your business happens to be like the one where the transaction completes after the delivery of products, then you are likely to face the problem of cash flow. Factoring has made many a life easier for people confronting the cash flow challenge.
- Consider a microloan
Mostly, small business owners are not ideal candidates for traditional banks. The reason being, they ask for a too-small amount which banks easily overlook, and their requirements are not a walk in the park either. In such a troublesome scenario, a microloan could be your principal savior.
Microlenders operate through non-profit organizations, and they typically lend money ranging from 500 to 35000 dollars. What’s more, the criteria are flexible, and underwriting is also not as long as it is the case with other conventional lenders.
The last verdict
Irrespective of how enthusiastic you may be about your work, sometimes it’s easy to lose the motivation when funds are not readily available. All of a sudden, you can see the whole future vision nothing but blurred. However, there is no need to get demotivated at all. You can utilize the above options and continue to do well in your business.