Small business owners face a variety of hurtles to attaining small loans or cash advances. If your business is in a high risk industry, you will encounter higher interest rates than your lower risk peers, loan refusals and other obstacles. Luckily, there are alternative funding sources that make life a lot easier for entrepreneurs who are not afraid to work in risky industries.
Small Business Loans
It is now a lot easier for small businesses to get a loan from the Small Business Administration (SBA). The SBA is guaranteeing more loans, but applicants must still reach specific qualifications to be approved. In 2010, the loan amount for new or small operations increased to $5 million for the 7(a) loan program. In addition, the 7(a) loan program was extended to medium sized businesses.
Angel Investors
If you have a solid business plan or fantastic idea, you may be able to attract an angel investor. Most angel investors are experienced entrepreneurs as well. This makes them fantastic sources of knowledge and financial assistance, in return for a share in your business’ returns. Owners who don’t mind giving away a piece of the pie may prefer this alternative funding source.
Crowdsourcing
This is a fairly new type of funding, where owners go directly to the public to raise capital. Fundable, GoFundMe, and Kickstarter are a few avenues that can generate some sizeable cash flow for companies if the pitch is right.
Your Savings
All entrepreneurs should be willing to invest their own savings into their business, but don’t drain every penny in the very beginning. If you’ve harnessed a small nest egg for emergency cash, now’s the time to use them. Using your own money is much simpler than searching and applying for small business loans, merchant cash advances or other.
First American Merchant is the online lender that provides small business cash advances that give you the funds necessary to launch your business. The company specializes in business cash advances for bad credit companies, and has the resources and experience to support entrepreneurs through the startup process