Where to Go When Your Bank Says No
Is your business ready to move to the next level? The answer to that question mostly depends on how much money you have in your wallet. Many businesses are hard-pressed for the cash necessary to expand.
While banks remain a primary small business funding option, there are alternative sources of start-up or expansion capital for entrepreneurs with not-so-great credit. This article by Small Business Trends talks about debt financing for entrepreneurs. Options include:
ROB’s (Rollover as Business Startups)—If you have an IRA, 401k, or other qualified retirement vehicle then you may be able to roll some or all of those funds into your new business entity.
Purchase Order Financing—There are special finance companies set up to step in when you have confirmed an order with a vendor but do not have the cash for the vendor to fill the order.
Vendors—Vendors may work out a deal with you on outstanding balances or terms on existing lines of credit. But there may be hidden costs in what they charge you for their goods and services.
Invoice Factoring—Turn your accounts receivables into cash. Some companies specialize in purchasing your receivables for a discount.
Regardless of the type of financing strategy you choose, evaluate the pros and cons on taking the investment and decide if the rewards greatly outweigh the risks.