Businesses are increasingly choosing other options of financing as banks institute more stringent rules on lending. As a business owner, it is important to be aware of all the alternative ways to raise money when the need arises. Here are four simple avenues you can get financing for your firm.
Try purchase order financing
Purchase order financing companies can help you out when you need to fill customer orders. Sometimes, you are going to get an order from a client but do not have enough money to supply the merchandise. You can have the PO financing company pay the supplier directly for the merchandise, and then you ship the products to your client and pay the financing company later.
Use your credit card
When stuck and in need of a quick way out of the jam in your business, you can opt to use your credit card. Seasoned entrepreneurs will tell you to use your credit card as a last result, however, given the risks involved. Failing to pay on time will dent your credit score, and that is something you do not want to do when you run a business.
Pledge part of expected earnings
While this is relatively a new way to raise money for your business, it can be effective. In this approach, you pledge a percentage of your future lifetime earnings to people who provide funding for your venture. The trick is to convince them of the viability of your idea. It is a personal investment contract, and your part is to honor it.
Find an angel investor
It was once easy to attract angel investors, but recent economic uncertainties have made the game complicated. Finding an investor to believe in your idea takes much more than you may expect, but you can still pull it off. All you need is to do is to communicate effectively, show experience, and demonstrate that you know what you are doing.
Given the current unpredictable economic times, securing funding for your company can be rather tough. But if you are creative enough, you will find that getting a bank loan is not your only lifeline when you need to push your business forward.