As an entrepreneur you understand how necessary it is to have available working capital for your business. After all, a healthy cash flow makes for a healthy business and a bright, promising future. Unfortunately, today’s typical lenders are reacting to a tough economy with even tougher funding stipulations. Luckily, for the inventive small business owner there are answers available in the form of creative, alternative funding. Read on to discover 4 unique paths that could land you and your business at the lending finish line!
Test Out Peer-To-Peer Gathering people together to invest in a cause is nothing new, but advancements have been made in the form of effective peer-to-peer lending. The fundamentals are the same; one person explains their cause and multiple people invest small sums of money as a way to minimize risk. The beauty of peer-to-peer funding is that you don’t have to limit your potential lenders to institutions like the bank; instead, a perfect stranger can get your business funded.
Navigation Tip: Like any viable business move, you’ll have to draft out your plan detailing what you’ll use the funds for and how you predict they’ll be turned into more sales/profits. Those that contribute to your cause will eventually get paid back plus interest.
Get Creative With Contests
Thanks to the Internet, the ability to fund your business has gotten more and more creative. Nowadays a simple Google search can open you up to a wide variety of competitive feats that can put winnings in your business’s pocket. From video submission competitions to advertising contests, you never know what a little creativity can do for your business’s funding future.
Navigation Tips: If you find a contest that you think is perfect for your business, check out past winners of the same competition. What was it that they did that made them stand out? What part of the rules and guidelines did they emphasize the most through their submission?
Acknowledge Accounts Receivable Lenders
While your business may not have the time to wait for investors and winnings that doesn’t mean it can’t find funding down an alternative path. One option is to work with an accounts receivable lender. Private lending companies like this provide businesses with an upfront lump sum of cash in exchange for a future portion of their credit card receipts. Cash advances provide fast and flexible funding and are best used when making a direct investment back into one’s business (i.e. advertising, renovations, equipment purchases). The inclusiveness of this option includes approvals for bad credit, no need for collateral and automatic repayments that work with the flow of your business.
Navigation Tip: Seek out a lender that is familiar with the nature of your specific industry. Turn away from lenders that put pressure on you or encourage you to take more than you really need. Back up your research by checking on reputations with viable sources like the BBB.
Goods and Grants
They say don’t mix business with pleasure, but what about your mixing your personal items with profits? Take a look around and see what personal assets you own and could likely go on along without. Jewelry, cars and boats may all seem like viable sacrifices in the face of relieving stress and improving your business’s cash flow. If your business falls into a category such as non-profit, research, health or technology based there may be available grants out there that can set you up with funding. Awards for grants tend to be streamlined toward certain niches so searching for the right one may be difficult, but free money that doesn’t need to be paid back seems like a fair trade.
Navigation Tip: Establish a Google Alert for “X industry” and “grant” to help you stay on top on available funding opportunities.
What have been your experiences with alternative funding?
About the author:
Kelly Gregorio writes about small business topics while working at Advantage Capital Funds, a provider of merchant cash advances. You can read her daily business blog here.