Other Alternatives for Small Business Loans
Despite their differences, companies big and small are confronted with the same challenge- providing sufficient funds for the business. Sometimes, even though a business is already an established one, it can still experience financial shortages or unexpected expenses.
When faced with such burdens, acquiring a small businesses loan may be the first solution you’ll think of. However, small businesses loans can be a little difficult to obtain especially without impressive credit. In addition, the application process could take a little longer that you expect. Let’s consider some suggestions on how small businesses can get through tough times.
Here are some of the alternatives for traditional business loans:
- Accept credit cards. Have you thought about accepting credit card payments? You could be losing a large number of sales if you’re not accepting credit card payments from your customers. By accepting credit card payments, your business can qualify for a business cash advance or credit card factoring. Factoring is a great option because it is paid off using the invoices that you have obtained from your credit card sales.
- Go home based. This option is not advisable for all businesses, but if you can turn your present business to a home based business, you can save a great deal from your budget. With a home business, you won’t have to lease a commercial space. Also, your transportation expenses would be significantly reduced and most of all, you’ll enjoy savings from certain tax exemptions.
- Try drop shipping. When a customer orders, you can actually get these items straight from the manufacturer or supplier and have them deliver the goods to your customer as well. This is called drop shipping. This new system allows you do business without the need to rent a warehouse or additional office space. You can also save a great amount of money from your shipping costs.
- Encourage your customers to pay cash. If your business is short on cash, you can offer discounts or freebies for customers who’ll pay in cash. You can also use reward programs where customers who purchased a certain amount for a particular time period would be entitled for gifts or prizes. Customers love to get freebies and discounts so there is great potential that they would buy more from your store or choose to pay in cash to get the extra prize.
- Build up your credit rating. Having an excellent credit rating is a huge advantage when applying for loans. How do you build up good credit? Pay your unpaid bills with all your creditors. Stay within your credit limit. Leave at least 50% of your credit limit free or unspent. Lenders are more than happy to provide loans to businesses with excellent credit history.
These are just some suggestions that you can apply to your own small business. These steps would help save your cash flow so you can continue financing your business while obtaining a small business loan is not an option.
Irish Taylor is a bussiness loan consultant with Startup Business Loans and has been providing consumers and business owners with startup business financing since 1992. For years she has helped people with credit and loan problems especially pertaining to business start up, SBA loans and Unsecured loans.
Copyright 2008.
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