Small business loans are a necessary part of any business, but they can be difficult to obtain explains Greg Van Wyk.
There are many alternative lenders who are willing to work with small businesses and offer loans with more flexible terms.
1. SBA Microloans:
These loans are available through the Small Business Administration and have a maximum amount of $50,000. They can be used for working capital, inventory, or equipment and have repayment terms of up to six years.
2. Online Lenders:
There are many online lenders who offer loans to small businesses. Some of these lenders include Kabbage, OnDeck, and Funding Circle. Loans from online lenders can be used for almost any purpose and have repayment terms ranging from a few months to a few years.
3. Business Credit Cards:
Business credit cards can be a good option for small businesses that need short-term financing. They typically have interest rates of around 15% and can be used for almost any business expense.
4. Equipment Financing:
If your business needs new equipment, you may be able to finance it through an equipment lender. These loans are typically for a specific piece of equipment and have repayment terms of up to five years says Greg Van Wyk.
5. Merchant Cash Advances:
A merchant cash advance is a type of financing that gives you an upfront sum of money in exchange for a percentage of your future sales. This can be a good option if you have a lot of credit card sales and need short-term financing.
6. Invoice Financing:
If your business has accounts receivable, you may be able to use them as collateral for a loan. This type of financing is called invoice financing or receivables financing.
7. Lines of Credit:
A line of credit is a revolving loan that you can draw from as needed. Lines of credit typically have lower interest rates than other types of loans, but they can be difficult to qualify for.
8. Term Loans:
A term loan is a loan that is given for a specific purpose and has a specific repayment period. Term loans can be used for equipment, inventory, or working capital and have repayment terms of up to five years.
9. Venture Capital:
Greg Van Wyk says venture capital is an investment made by a private equity firm or individual in a startup or early-stage company. Venture capitalists typically invest in companies with high growth potential and are willing to take on more risk than traditional investors.
10. Angel Investors:
An angel investor is an individual who provides capital for a business in exchange for equity ownership. Angel investors typically invest in startups and early-stage companies with high growth potential.
11. Family and Friends:
You may be able to get a loan from family and friends if you have a good relationship with them and they are willing to help you out financially. However, you should be prepare to give up equity in your business if you do this.
12. Grants:
There are many government and private grants available for small businesses. These grants can be use for a variety of purposes, such as start-up costs, research and development, or expansion.
13. Crowdfunding:
Crowdfunding is a type of financing that allows you to raise money from a large group of people. There are many crowdfunding platforms available, such as Kick starter and Indiegogo.
14. Peer-to-Peer Lending:
Peer-to-peer lending is a type of financing that allows you to borrow money from individuals instead of banks or other financial institutions. Platforms like Lending Club and Prosper allow you to connect with individual investors who are willing to lend you money.
15. SBA Loans:
The Small Business Administration (SBA) offers several loan programs that can be use by small businesses. These loans have competitive interest rates and can be use for a variety of purposes, such as start-up costs, equipment, or working capital.
16. Equipment Leasing:
If you need equipment for your business but cannot afford to buy it outright, you may be able to lease it explains Greg Van Wyk. Equipment leases typically have terms of one to five years and can be a good option if you don’t have the cash on hand to purchase the equipment outright.
Conclusion:
There are many financing options available for small businesses. The best option for your business will depend on a variety of factors, such as the type of business you have, your credit history, and your financial needs. You should speak with a loan officer or financial advisor to find the best financing option for your business.