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Many small business owners shy away from seeking outside financing because they fear that traditional lenders will not take them seriously. However, there are a number of creative financing solutions available for small businesses, many of which do not require a traditional loan from a bank.
Many small business owners shy away from seeking outside financing because they fear that traditional lenders will not take them seriously. However, there are a number of creative financing solutions available for small businesses, many of which do not require a traditional loan from a bank. The following are a few examples of alternative financing options for small businesses.
Invoice Financing
One form of alternative financing that has become increasingly popular in recent years is invoice financing. Also known as accounts receivable financing, this type of financing allows small businesses to borrow money against outstanding invoices. Some companies will even advance the full amount of your invoices, minus a small fee, and then wait to be repaid by your customers. This can be a great way to free up working capital that would otherwise be tied up in unpaid invoices.
Equipment Financing
Another option for small businesses is equipment financing. If you need to purchase new equipment but do not have the cash on hand to do so, you may be able to finance the purchase through a lender. This type of financing is typically secured by the equipment itself, which means that the lender can repossess the equipment if you default on the loan. However, if you make your payments on time, equipment financing can be a great way to get the equipment you need without having to come up with a large down payment.
Small Business Credit Cards
If you have good credit, another option to consider is a small business credit card. Many credit cards offer 0% APR introductory periods, which can give you the breathing room you need to make a large purchase or invest in some much-needed renovations. Just be sure to pay off your balance before the intro period expires
Business Lines of Credit
Another option for small businesses is to obtain a business line of credit. This type of financing can be used for a variety of purposes, such as inventory purchases, marketing campaigns, or even covering unexpected expenses. Unlike a term loan, a business line of credit provides you with flexible funding that you can draw on as needed. And, as long as you make your minimum payments on time, you will only be charged interest on the amount of money that you actually borrow.
Small Business Credit Cards
Another option for small businesses is to use a business credit card. Business credit cards typically offer higher credit limits and better rewards programs than personal credit cards, making them an ideal way to finance larger purchases or earn rewards for business expenses. Many credit cards offer 0% APR introductory periods, which can give you the breathing room you need to make a large purchase or invest in some much-needed renovations. Just be sure to pay off your balance in full each month to avoid accruing interest charges.
There are a number of creative financing solutions available for small businesses, many of which do not require a traditional loan. Invoice financing, equipment financing, and business credit cards are all viable alternatives to traditional loans that can provide much-needed funding for your small business. When choosing a financing solution, be sure to compare interest rates, fees, and repayment terms to find the option that best suits your needs. Contact National Legacy Capital Group today to learn more about our small business financing solutions.
