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Consider Your Financing Options: From Traditional Bank Loans to ACH Loans

Believe it or not, the number of business funding options at your disposal is virtually limitless. The real difference between them is that each will vary in their difficulty to acquire. Fortunately for the entrepreneur, the variety of services available means more business dreams becoming a reality. Before you settle for seeking the standard bank loan, consider the numerous alternative methods available today:

  1. Traditional Bank Loan. Typically the first place an entrepreneur goes, this traditional financing route involves setting up a meeting and filling out a loan application; that is, only if the bank offers small business lending options. This loan application process is long, lasting anywhere from a couple of weeks to two or three months. The documentation requirements will also be tedious. You’ll be asked to provide plenty of financial information and confirmation that you are in good standing with the secretary of the state. Unfortunately for small businesses, most traditional banks are wary of working with you – especially if you are a startup.
  1. Self-Financing. This a very popular method of financing for a business startup. Your ability to self-finance is determined by your assets, including: real estate, vehicles, retirement accounts and other investments. According to, “The most common option is getting a home equity loan on the portion of the mortgage that’s already been paid.” Other self-financing’s options include borrowing against your 401(k) retirement plan or using the funds you have in an IRA. As long as you replace the money within 60 days, you should be able to withdraw money from an IRA.
  1. There was a time when crowdfunding did not seem very practical. Unless a company has products and services that are attractive to millennials, it can be hard to gain traction with crowdfunding. However, if crowdfunding is an option worth pursuing for you, the potential benefits are huge. Crowdfunding sites like Kickstarter and Indiegogo enable a business to start a campaign, set financial goals and offer rewards to those who choose to give. The best part? The money you raise you get to keep.
  1. Product Presales. One of the most overlooked methods, product presales involves selling your product before you launch your business. Known as “product presale financing”, this form of funding can be used in certain situations. Keep in mind that the product has to be fully developed first. If the product is not ready for the market, it could damage the future of the brand before your business even gets started.
  1. Friends and Family. Many advise that mixing business with personal is not a good idea. However, your friends and family know your talent and strengths better than anyone else; they are often more than happy to help you fund your vision. Financing with family and friends is both a flexible and convenient option.
  1. VC’s or Angel Investors. While they are great options, not every business will be able to meet the strict requirements of venture capitalists and angel investors. According to, “Angel investors aim for helping companies in the very early stages of growth and expect to get a 20 to 25 percent return on their initial investment.” Venture capitalists, on the other hand, are known for only working with businesses that can prove they have steady revenues pouring in, and a five-year time frame is typically used for recouping their investment.
  1. ACH Business Funding. As more and more banks close their doors to small businesses, these owners are taking their business elsewhere. If your business has been categorized as being “high risk”, you know how difficult it can be to find funding. In the words of, “The beauty of alternative loans is they’re backed by private companies that are able to make decisions independent of other organizations.”

Consider an ACH loan with an alternative lender – like FAM. ACH funding programs, also known as “Bank Only” funding, allows the provider to fund a merchant even if they do not have a merchant account. Business loans from a traditional bank can be difficult to obtain; a business cash advance is an alternative to that. The biggest advantage is that the application process is simple, fast and hassle free. Documentation requirements are minimal, and bad credit is not a problem.

Many entrepreneurs and business owners run into a brick wall because they fail to consider all of their options. It is easy to become so focused on a single financing option that all of your time and energy is drained trying to force that single method to work. By considering all of your options, you also increase your chances of securing financing that truly works for your business.