Small business owners can't get business loans if they don't apply for them. And many small business owners don't even bother to apply; kind of a self-fulfilling prophecy. A recent article in Entrepreneur quoted this statistic: "20% of business owners said they didn't apply for funding because they feared their application would be denied."
So where do they go to fund their startup businesses? Where can you get financing for your business if you can't get a traditional business loan?
Consider private investors - friendly investors, like family and acquaintances or professional investors. But unless you have a great high-tech "get rich quick" scheme, you are unlikely to attract the professionals, who want to get in and out fast. Another source of private investors is peer-to-peer lending, in which an online site connects lenders to borrowers.
Find a co-signer. A co-signer is someone who has assets they can pledge to help you get started.
Consider a credit union. Depending on the type of loan and your business circumstances, you may find that it may be easier to get a business loan from a credit union. Read more about "Can I get a business loan from a credit union?"
Consider alternate sources. Rosemary Peavler, Guide to Business Finance, has a great list of alternative financing sources, including:
- Merchant cash advances
- Purchase order (invoice) financing
- Peer-to-peer lending, which connects potential lenders and borrowers
- Selling accounts receivable (factoring)
- Financing with credit cards.
and about finding the best type of business financing for your business situation.
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