With a large chunk of your business loan research under your belt, you may feel as though you are clear on all your options. But, you might pleasantly surprised to know that there are more than traditional term loans, short-term loans, personal loans for businesses, business credit cards and lines of credit available when it comes to securing additional financing.
So, if you are like most newbies in the business world, you have probably been led to believe that a “standard” business loan is the only way to go when it comes to securing additional financing. Well, get ready to be shocked and amazed or rather just better informed. The fact is you can apply for a standard business loan and/or explore several different lending options.
For instance, you may or may not know about SBA loans. SBA loans are basically a long-term and low-interest loan for small businesses that is partially guaranteed by the government. The reason you may not have heard of SBA loans is because they are hard to come by as they often involve lengthy paperwork, longer approval times and collateral that you may not have available. Nevertheless, SBA loans still offer some of the lowest down payments and terms. Moreover, these loans come with reasonable interest rates and can ultimately be used for a wide variety of business purposes.
In addition to the existence of SBA loans, you may also be surprised to know that there are lenders (private, family and alternative) out there that are sympathetic to your start-up state i.e. these specific lenders offer start-up loans. Start-up loans are, in essence, any kind of financing aimed at helping businesses with no business history. You can also use business assets that are already in your possession. In other words, you can use such things as your accounts receivables or business equipment in order to secure additional funding.
In-house financing, if you will, is when you utilize such things as your accounts receivables or invoices as collateral. This essentially means that you sell your invoices to another entity in order to not have to wait for payment which in turn provides you with the cash flow you would have eventually received had your customers paid. As an additional financing option, this can be advantageous if you only need the amount of your outstanding invoice, though it is important to note that fees are typically the downside to this kind of financing. Similarly, equipment financing is yet another in-house option where you are able to receive a loan for new equipment by using that new equipment as collateral. Equipment financing is a great way to have quick access to cash with very little paperwork, but keep in mind that equipment depreciates which can and will affect your bottom line.
Another rarely-discussed option is merchant cash advances. This is basically a lump sum of additional financing that you gradually repay via a portion of your daily credit card transactions. This particular option is definitely the quickest and easiest way to get additional funds, but it also the most expensive—so choose wisely.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.