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Obtaining a loan from the bank seems to be close to impossible these days. After the debacle of 2007, banks have all but shut their doors to small companies with little to no collateral business. However, this shouldn’t be the end of the road for you as there are other options available. In fact, there are numerous ways to fund the growth of your company.

  • Factoring

Factoring is a simple method that allows you to sell your accounts receivable to a different party (factor) at a discount. You can then get liquid cash immediately and build on your burgeoning business. Currently, it is a $150 billion industry that is only growing with each passing day. It is important to know that factoring can be an expensive medium to obtain money. It can cost up to 15% of the receivable. So, it is advisable not to head towards this route if your business isn’t in good shape financially.

  • Retirement Accounts

Your retirement account shouldn’t be touched or so they say. Well, if you are in dire need of money to fund a business you have full confidence in, borrowing money from your IRA or 401(k) might be a good option. Using your retirement fund is undoubtedly risky; but, if your business succeeds, you can derive major dividends. We would advise you to consider a 60day interest free loan from your fund. You wouldn’t have to pay any fees if you pay it back within the time frame.

  • Government grants

You could also try your hand with government grants. Of course, you won’t get the grants handed to you. You’ll have to do some research here. These programs can be found at local, state and federal levels. Some of these agencies include the Department of Commerce, USDA, and the Treasury Department.

  • P2P (Peer to peer lending)

P2P loans are anything but easy to obtain and they come along with high-interest rates. The lending takes place online in several platforms such as Lending Club.com and Prosper.com. You will be getting funding from people you don’t know from those sites. Various credit checking tools are heavily utilized in this process. Basically, your loan will depend on your credit score, the duration of the loan, the economy, and your story. These loans are generally given to individuals and not companies. Some of the other forms of P2P lending include real estate loans, student loans, and payday loans etc.

  • Crowdfunding

Similar to P2P, crowdfunding, as the name suggests, is a method of obtaining funds from a large number of people through the internet. According to a renowned expert, crowdfunding is the practice of raising funds from two or more people over the internet towards a common service, project, product, investment, cause, and experience. Unlike P2P funding, crowdfunding doesn’t require you to repay the funds. Instead, you’ll have to offer something else apart from money; for instance, you could name a product after your investors. Some of the sites that are popular for crowdfunding include IndieGoGo and Kickstarter.

  • Business competitions

It is certainly worth a try to partake in numerous business plan competitions. When everything else fails, you could just strike gold in a competition. There are several regional and national competitions with attractive cash prices. Some of the biggest competitions include the MIT $100k Entrepreneurship Challenge, the Amazon Web Services Start-Up, and The GE Ecomagination Challenge etc.

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