Five Alternative Ways To Fund Your New Business

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Banks don’t have the best reputation at the minute. To be honest, public opinion of the banks could not be lower. If you are trying to start a new business and need cash flow to get off the ground, applying for a bank loan probably isn’t your preferred option. But, how do you get the money you need without one? After all, bank loans are the mainstay of cash flow in the finance sector. All you have to do is get a little creative. You don’t need to avoid the banks altogether; you just need to explore other methods of cash flow.

Bank Overdrafts

A loan comes with a lot of stipulations, mainly the additional cost of interest that you have to pay back. However, banks also offer overdrafts for businesses just like they would for personal use. In fact, a lot of banks will tailor the overdraft for startups to help them get off the ground. The method is simple: you use the overdraft in the leaner months and top it up when the business is doing well. You only pay interest on the amount of the overdraft you use, usually without a setup fee.

Private Lenders

The term is mistaken for a loan shark, but that is not a legitimate private lender. A legitimate private lender can provide vital small term loans at a good rate that is a lot easier to pay back. You don’t have to wait for weeks or months on end to know whether you are eligible for a loan. Plus, they have attractive terms and conditions that are suitable for people with low credit scores. Make sure you choose one that is regulated and affiliated and has a sterling reputation. Check out ImperialAdvance.com for more information.

Family Loan

If your family are in a privileged position, take advantage. That doesn’t mean take advantage as in take them to the cleaners, but take advantage as in don’t lend from other sources. Of course, your family will be far more flexible about the length of the loan and when you pay it back so you won’t be worrying about meeting deadlines. Plus, it is a lot cheaper because there won’t be any interest.As aresult, your business has a better chance of growing and making a profit.

Asset-Based Lending

Asset-based lending is much like a mortgage. You borrow money from the bank against a property and pay back the loan over an extended period. It is a great way of releasing a large amount of cash, but make sure you take the responsibility seriously. The lender can repossess your property if you can’t make the payments.

Crowdfunding

You can make the money by taking it upon yourself to raise the funds. There are plenty of companies that can make it happen, but Kickstarter is the best-known. Any startup business can set out their aims and goals on the website and ask people to make contributions. If the community think it is a good idea, they will contribute. The best part of Kickstarter is you don’t need a few people making massive contributions. Thousands of people could donate a dollar or two each.

Money can come from various sources. Just remember to make sure they are legitimate before you sign on the dotted line.