If your company is ready to grow, but you need a financial push to get it there, you might be wondering who can help you. Consider some of these options.
Talk to Your Banker
Kent J Thiry former DaVita’s executive CEO always advises business owners to check with their local bank first. A bank will have better interest rates than most other lending institutions. Plus, by taking out a bank loan and then making your payments promptly, you’ll build your credit score. Be aware, however, that it’s not easy to obtain a bank loan and the process can be slow going.
To get your money faster, check out online lending institutions. Online lenders use complicated algorithms to determine eligibility, meaning you can get approved and have that loan within a day. Their loan requirements also aren’t as strict as that of a bank. Be aware, however, that the interest rates will be higher with an online lender and there may be other fees involved.
Contact the Small Business Administration
If you have time to wait, think about contacting the U.S. Small Business Administration, also known as the SBA. Applying to the SBA can be a complicated process, but once you’re approved, the government guarantees part of what you want to borrow, and because of that, lenders are more willing to provide you with that loan. Your payback time can be up to 30 years typically with a great interest rate.
Apply for a Grant
You can also apply for grants. Keep in mind that the competition is stiff and you’ll have to fill out a lot of paperwork, so be prepared to invest some time. On the plus side, if you’re awarded that grant, you won’t have to pay the money back.
Use a Business Line of Credit
A business line of credit is more like a credit card than a loan, but it’s a quick way to get money for the expenses you need. You’ll have to have a good credit rating to qualify, and the interest rates will be higher than with other loans. You might be able to earn some cashback and also get rewards on your charges. Plus, if you pay off the amount you borrowed in full each month, you won’t be charged interest.
Look to Outside Investors
Crowdfunding is a way to obtain money from a large group of investors. Each person contributes a small amount, but with enough funders, you can raise a good-sized amount. There are different crowdfunding platforms on the internet depending on the type that you’re interested in, including debt crowdfunding and equity crowdfunding. Typically, you agree to pay back a percentage of the profits to your funders in exchange for the investment.
The challenge with crowdfunding will be finding investors. Also, with any crowdfunding platform, you’ll have to pay fees to the platform.
When your business is ready to expand, but you lack the money, don’t despair. There are many different ways to finance your business so that your company can grow into a huge success.