Sometimes in business, loans are not the best business option for securing needed capital. Loans from traditional banks generally take a considerable amount of time, and there are situations where you just don’t have enough time to wait for the approval process to play out. As an alternative to taking out bank loans, some business entrepreneurs prefer products available through alternative financing.
This form of alternative financing consists of selling some or all of your invoices to a factoring company at a percentage of their face value. In exchange for the immediate cash, you relinquish those customer invoices, which then become the property of the factor.
Hedge fund lending
Sometimes referred to as the modern-day corporate ATM’s, hedge funds can provide capital for businesses considered to be in a high risk pool, for instance a conceptual technology company. Funding can be very quick, and is always arranged so as to be mutually beneficial for both sides.
These lenders are not really professionals involved with financing, but are instead people from your network of friends and family. Even external individuals with no close ties, but who have a business interest in your proposition, might be considered peer-to-peer lenders. Access to cash can be quick, and repayment flexibility is often an attractive option.
Credit card lenders
Business credit cards operate in much the same way that personal credit cards do, and these are commonly used as sources of income for startups and other small businesses. They usually carry high interest rates, and money must be paid back within a fairly short time frame, otherwise payments and interest begin rising quickly.
Lending from customers
While this is not a widely used method of alternative financing, it has certainly been used successfully in some cases. As an example, a retail store might use monies supplied by customers to enhance its operations, in exchange for providing those customers with monthly products without charge.
Venture capital company loans
This is a bank-based source of income which only certain companies will qualify for, namely those which have had prior backing from venture capital companies, and have established relationships where due diligence was already carried out. What this does for the borrower is provide one or more brand-new sources of income which it previously had no access to.
Contact Vankeith Commercial Capital for Alternative Funding Options
The specialists at Vankeith Commercial Capital will explore every funding option with you, to find something that works for your small business. Contact Vankeith Commercial Capital today, and don’t lose another day to your business competitors.