All businesses need money to get started. However, most businesses that apply for traditional funding are rejected. In fact, only 39 percent of businesses that apply for traditional funding are approved. There are a number of other financing options for you.
Short-Term Business Loans
Short-term business loans are typically taken out for 12 to 18 months. It is easier to get approved for a short-term loan than other types of loans because they do not require a lot of paperwork. You will also be able to get your funds quickly. In fact, many people are able to get their funds in just two days.
A title loan is a short-term loan where a person uses their car title as a collateral. You can use a title loan for business funding. One of the many great things about title loans is that you do not need to have good credit in order to qualify for one.
The loan amount that you can get is dependent on the value of your car. You will typically be able to borrow between 25 and 50 percent of what your car is worth. Most people borrow between $100 and $5,000. You can do an internet search to find title loans near you.
People who are unable to get loans from traditional credit unions or banks turn to peer-to-peer lending. There are online lending clubs that will use the same criteria that banks and credit unions use to assess how credit worthy a person is. However, investors are allowed to fund loans. Multiple investors are able to fund the loan.
Merchant Cash Advances
If your business uses credit cards, then you can get a merchant cash advance. The company will provide a business with funds in exchange for a percentage of their future sales. Businesses can also pay the company back by making daily or weekly debits from their account.
A company will look at your credit card statements in order to determine whether you qualify for the cash advance. That is why they are typically more forgiving of people who have bad credit.
Working Capital Loan
If your business has had a bad month and you have trouble making ends meet that month, then you can take out a working capital loan. A working capital loan is designed to finance the everyday expenses of your business. This includes payroll and operational costs.
There are secured and unsecured working capital loans. However, a high credit rating is typically required to get an unsecured working capital loan.
Websites like Gofundme and Kickstarter can be used to fund your business. You will be able to get donations from your family members, friends and strangers. You can tell people about why you need the money and set a goal.
Angel investors are successful business people who invest in other businesses. You will have to put together a good pitch in order to get funding from an angel investor. You should also have a good knowledge of the market.