Business Funding: What are Your Options?
Without doubt, the business landscape has significantly evolved over the years.
Nowadays, out-of-the-box thinking and resourcefulness have become vital for businesses who want to get ahead.
The same traits are also necessary when finding the right funding alternatives.
If you are currently in the lookout for financing options for your business, the following are some of the choices available at your disposal:
If you think your business can use additional money apart from funding you have gotten from other sources, then a micro loan would be ideal.
In majority of the cases, micro loans are often given to small businesses as working capital and start-up cash.
Other entrepreneurs however use micro loan for diverse other purposes like purchasing equipment, supplies, furniture, and fixtures.
In some cases, the money is also used to purchase other businesses.
Fortunately, with favorable repayment terms that can range from 1 to 5 years, businesses can never go wrong with a micro loan.
Businesses that get the nod of a business angel will get investment in exchange for an equity stake.
In most cases, angel investors are also established entrepreneurs themselves so they can often relate to what business owners go through as they have been there themselves at one point or another.
Thankfully, enticing an angel investor is not as challenging as it seems.
Nowadays, there are many companies that can provide recommendations on how to polish your pitch so you’ll get the nod.
They can also help you connect with hundreds of angel investors.
For businesses that are willing to give up a share of their venture and has a robust pitch with promising growth projections handy, this route would be highly recommended.
In essence, crowdfunding is similar to a charity sponsorship—individuals come together to fund a venture or an idea they believe in and would want to support.
Oftentimes, donor or investors on crowdfunding sites are private people who willingly contribute a small amount to a concept they believe has the potential to bring in the cash.
And since significant amounts are often not involved, donors or investors will often forego the meticulous grilling or rigorous conditions characteristic of most angel investors.
Apart from providing businesses with the funding they need, crowdfunding can also help you get your ideas out there.
No doubt that’s word-of-mouth marketing you can’t afford to pass out on.
Getting the Nod
If you have decided on the funding option you would like to apply for, you can hasten the process by keeping in mind the following helpful tips:
Assess your current credit report
Before handing in your application, consider it mandatory to obtain a copy of your credit report.
This is necessary as you need to check if the figures reflected in the report are accurate.
Since most lenders will likely check and review your credit report before approving your application, you need to ensure all the data in the report are correct and you can have the needed corrections done when necessary.
Make sure you have all the needed financial statements handy
Without doubt, any creditor would like to be sure borrowers will have the means to repay the money they owe.
That being said, it would be vital to make sure reconciliation of net worth, balance sheets, and other financial statements are handy.
Also, it is important that all the financial statements that will be submitted should not be more than 90 days old.
You might also be asked to prepare your accounts receivable and payable breakdown handy so make sure you have them handy, in case you will be asked to present it.