Just how are small business owners able to fund their own businesses in such a shaky economy? The truth is, it isn’t always easy to find financial stability, considering the cost of employee wages, equipment, software, rent, traveling, and a variety of other expenses.
Luckily, there are plenty of ways to go about finding working capital loans for small businesses and other types of small business lending opportunities:
- Traditional banks: This option has long been considered the best option by many funding experts, but these days, more small businesses are realizing that this options might not be the best one. There are certainly plenty of options for small business loans at a bank, but it could take a long time for a line of credit to be processed.
- Credit unions: These are non-profit member-owned institutions that function very much like banks, but they generally provide a little better rates and terms on small business loans. If you aren’t already a member of a credit union, you’ll have to pay a small membership fee and live within the geographical region of the credit union in order to take out a loan.
- Government loans: The U.S. Small Business Administration (SBA) offers many different types of small business loans, especially microloans for businesses that just need some quick cash after a disaster strikes. These loans are fairly good options, but be aware that your business might not qualify.
- Online private lenders: These institutions are quickly becoming a top choice recommended by many funding experts, because they carefully consider the same requirements as banks consider but they tend to offer better repayment schedules and interest rates.
So which lending option is the best choice for your small business?
The good news is that the economic Recession is on its way out the door.
The bad news is that creditors — primarily banks — are very leery of providing small business loans because these lending options were a significant factor in the crumbling economy back in 2008.
The fact is, now small businesses have fewer options when it comes to small business lending and small business owners have had to get a little more creative than before in order to come up with enough funding for their operations.
So if you’re running a small business now, how can you get the funding you need?
One option is to visit your local bank or credit union and apply for small business loans through that financial institution — but more business owners have realized that these working capital loans for small businesses aren’t always the most efficient option when they come from banks.
Another option is to work out the problems with family and friends, borrowing what’s needed to keep your business running and paying them back on a timeline. But as everyone knows, this probably isn’t the most professional way to get a small business loan nor does it do much for your personal relationships.
A third option is to talk with the funding experts at an independent third party small business lending company. These firms are well aware of the problems that small businesses face — whether the business is 15 years old or just opened up — and they know how difficult it can be to stay financially stable.
Having a strong work ethic and business model is often a main selling point for startups looking for funding, but for small businesses that have already been operating for some time, it can get a little embarrassing to admit that you need more funding now. With a lending service, you don’t have to worry about this awkward conversation and you don’t have to worry about an uncomfortable explanation as to why your business is struggling now.
Every business has its ups and downs — should a small business suffer just because traditional lending opportunities aren’t as accessible?