04-08-2017, 12:59 PM
Small businesses that are considering expanding current inventory levels or opening a new location, or new business owners who start a business often have financing needs to meet expansion or development. There are several sources of financing for small businesses; Some of which are traditional, such as small business loans and others are alternative sources such as the use of a 401k.
Small Business Loans
The Small Business Administration maintains a directory of approved commercial lenders that cater to small businesses. Commercial loans are the most traditional source of financing for new business units or the establishment of a new start-up company. The Small Business Administration does not directly issue loans to companies but provides a portal to lenders and has a guarantee program for borrowers in which the SBA guarantees a commercial lender a percentage of the loan repayment in the event of default applicant. In addition, the SBA oversees a micro-lending program that provides funds ranging from a few thousand dollars to $ 35,000.
Venture capital and angels
Venture capitalists are a source of financing that usually presents all the start-up or expansion money for a qualifying business. Typically, venture capital is granted in the short term and is generally restricted to companies with a proven track record and in possession of the asset guarantee sufficient to essentially guarantee the loan. Angels investors or simply angels are rich and / or private business owners who come together to give away business funds to small businesses that need capital to cover startup costs or expand inventory or open a new location and Can be found through "angel groups" "Clubs of angels".
Savings and Retirement Plans
An alternative to finance small business units and new businesses is to use money from the savings and withdrawal plan. Instead of incurring debt from a third party vendor, business owners and entrepreneurs can access savings and retirement plans, such as 401ks and IRA to fund startup companies and new business units such as equipment or inventory. An advantage of using 401k loans or IRA is the interest that is being paid back to the borrower.
Alternative sources
Small business owners and emerging business owners can access a number of alternative sources of financing, including but not limited to a home equity loan, home equity line of credit, credit cards, small business grants and bring to a partner. The first two sources are ideal for business owners who do not wish to go through a lengthy commercial loan process. Credit cards are an appropriate source for financing small and medium-sized businesses. Grants provide funds, but they are difficult to qualify and often take a long time to complete. Partners can provide fresh capital and new prospects in new business units and can enter into a pre-arranged agreement to allow the business owner to buy back the sales percentage over a period of time.
Small Business Loans
The Small Business Administration maintains a directory of approved commercial lenders that cater to small businesses. Commercial loans are the most traditional source of financing for new business units or the establishment of a new start-up company. The Small Business Administration does not directly issue loans to companies but provides a portal to lenders and has a guarantee program for borrowers in which the SBA guarantees a commercial lender a percentage of the loan repayment in the event of default applicant. In addition, the SBA oversees a micro-lending program that provides funds ranging from a few thousand dollars to $ 35,000.
Venture capital and angels
Venture capitalists are a source of financing that usually presents all the start-up or expansion money for a qualifying business. Typically, venture capital is granted in the short term and is generally restricted to companies with a proven track record and in possession of the asset guarantee sufficient to essentially guarantee the loan. Angels investors or simply angels are rich and / or private business owners who come together to give away business funds to small businesses that need capital to cover startup costs or expand inventory or open a new location and Can be found through "angel groups" "Clubs of angels".
Savings and Retirement Plans
An alternative to finance small business units and new businesses is to use money from the savings and withdrawal plan. Instead of incurring debt from a third party vendor, business owners and entrepreneurs can access savings and retirement plans, such as 401ks and IRA to fund startup companies and new business units such as equipment or inventory. An advantage of using 401k loans or IRA is the interest that is being paid back to the borrower.
Alternative sources
Small business owners and emerging business owners can access a number of alternative sources of financing, including but not limited to a home equity loan, home equity line of credit, credit cards, small business grants and bring to a partner. The first two sources are ideal for business owners who do not wish to go through a lengthy commercial loan process. Credit cards are an appropriate source for financing small and medium-sized businesses. Grants provide funds, but they are difficult to qualify and often take a long time to complete. Partners can provide fresh capital and new prospects in new business units and can enter into a pre-arranged agreement to allow the business owner to buy back the sales percentage over a period of time.