Cash flow issues affect most new businesses, and a good portion of well-established ones as well. This may be due to the nature of the business you’re in, or because of unexpected events and changing market conditions. Either way, they can be distressing, and keep a lot of business owners awake at night. You might have started looking for options, but don’t think you’re eligible, or maybe you’re already in debt and are running out of options. Let’s take a look at a few ways that you can still get financing.
Give Away Equity
If you’re a majority owner, then you will have to consider giving away equity. You also need to be open to losing control. This is something that you should accept and embrace if you feel like you don’t have too many options left.
Finding someone with the type of expertise needed could be what it takes to make your business more profitable. They might be able to spot inefficiencies in your processes or help you reach new markets. This is not something you should scoff at, and you should not only accept, but expect the fact that most investors will ask for majority control of your business if you don’t have real credentials.
Put Up Collateral
If you own property or have lots of valuable equipment and property, then you could consider using assets to get a loan. Lenders like things that can be easily appraised, like residential or commercial property, but also things like your 401k and other liquid assets. You could also borrow against your fleet if you own your vehicles.
These will often be easier to get than traditional loans, but you have to make sure that you’re ready for the eventuality that it could be repossessed in case of default, however.
Borrow Against Your Account Receivables
If you have accounts receivables, then you can also borrow against them. You could go for something like invoice factoring, for instance. With this, the lender will take on the responsibility of collecting past due invoices for you and will lend an amount corresponding to a portion of that invoice.
The best part about this is that your credit score is largely irrelevant. It is the credit of your clients that will matter the most. So, this is a great option for those who think they don’t have a strong enough credit score to get a traditional loan.
Peer to Peer Lending
P2P lending could be another avenue you could consider, but you have to be careful. First, know that these can come with high fees and are not the easiest to get. Your credit score will also be considered. However, you may be able to get better interest rates and some are more favorable to people with less than stellar credit, so this is always something you could try.
As you can see, there are tons of available options even if you may think you have exhausted them all. Some might be out of your reach, but it’s always a good idea to try as many as you can.
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