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5 Sources To Consider When Accessing Capital

Guest post by: Karlene Sinclair-Robinson

Article Overview: Knowing where to go to access capital is vital to any business owner. Entrepreneurs are experiencing a high rate of loan applications being denied, so know where to go is very important. In understanding how a financing option can work for a given business, makes things much easier in accessing that particular solution.

5 Sources To Consider When Accessing Capital

It is a major decision when a business owner decides to seek access to capital. You might be at the point where you have used up all your personal finances and realize that you must go to an outside source. On the other hand, you just might be looking to improve your business without using your own money. Not a bad idea.

Well, in making this decision, business owners like you must understand the ramifications. When seeking any outside financing, do your research. Whether it's a bank or private lender, there are significant things you must be aware of, such as, their terms and conditions, fee rates, closing time frames, and more. You must understand these areas before you make that big leap.

Financing your business can occur through various methods and sources. Using a bank is important but know that they look at your past performance verses your future potential, while alternative financing sources look at both. Alternative funders want to know what you plan to do to grow your business. They want to see that you are going for more clients, contract opportunities, and any legal avenues for generating income. Based on their method of financing, if applicable to your business, they will do their utmost to work with you.

Here are five (5) alternative funding options when seeking access to capital:

• Factoring Sources - They will buy your receivables at a discount, so you are not creating debt.

• Asset-Based Lenders - They assess your current assets, put a value to it, and lend you an applicable amount.

• Purchase Order Funders - These sources will pay your supplier for you so you can fill large volume orders from your clients.

• Micro Loan Lenders - These private lenders will lend you smaller amounts anywhere from $500 up to $100,000 based on your business type, income and expenditures, and any other applicable factor.

• Private Commercial Lenders - These lenders will assess you and your property to determine the maximum they are willing to lend. They tend to make their decisions more based on the collateral presented.

These sources can be of value to you in times when banks are saying "No" more than they are saying, "Yes". Check them out as you just might find a source to help you grow your business.

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Article Tags: access capital, business owner, financing option, loan applications, small business



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