If you own a small business,the past year or so could have brought you some financial trouble.Because banks are not lending, many businesses had to get a little more creative in their tactics. With that being said, the government has tried to do its part for small businesses as well.
The Recovery Act brought the Small Business Administration with $375 million to help banks lend money to small businesses. Once wind of the money came to small business owners, many stepped up to the plate to get their piece of the $375 million—the money ran out around Thanksgiving.
In an attempt to jump-start the lending once again Congress passed another $125 million in December to help extend the incentives through February.It seems this money might run out as well.If you are a small business owner and need some help financially, below are a few ways to attain some money without the help of a bank.
Factoring: Factoring can aid business owners by “selling” unpaid invoices to a factoring company in exchange for cash. Most factoring companies will buy your invoices for anywhere from 70-90 percent of the value of your unpaid invoices. After purchasing the unpaid invoice from you, the factoring company will reach the customer who is responsible for the unpaid invoice and collect the full amount owed.
Business cash advance: Similar to a payday advance, these types of loans are much quicker to get than traditional bank loans. It is wise to note that these types of loans are more expensive than traditional loans, but they are becoming more popular. One reason for this is because business cash advances allow business owners to manage their cash flow easier in times of need. Although this is a viable and way to gain money fast, you should know that your company needs to allow credit card processing in your business to receive a business cash advance.
Grants: This is a good possibility, but wise to remember many people are now looking for grants that now aren’t able get bank loans. As a result people are finding this outlet harder to get, but it is still something to look into nonetheless. Try looking for local authorities that are giving out grants, as this may be a better way than looking to federal grants. If you are a non-profit, there are grants specifically for you to look for as well.
No matter how you gain capital for your business, the fact is there are options out there—you just might have to get a little creative. Banks are also looking into your personal credit to decide if you are an attractive candidate for a loan. If you have incurred some personal debt, you may want to look to a debt resolution program to get you back on track.
Shannon Suetos is a writer based in San Diego, California. She writes extensively for Resource Nation, an online resource that provides expert advice on purchasing and outsourcing decisions for small business owners and entrepreneurs.
