Sourcing Alternative Funding For Your Business
To get off the ground, most new businesses need access to capital from the outset to pay for development costs and cover a lack of revenue in the early stages. But when start-up capital dries up, business owners can quickly find themselves in the situation where the pace of outgoings is greater than the pace of earnings. In some cases, business owners will be comfortable paying these costs personally in the short-term. Where entrepreneurs have the capital to hand, this is effectively just an extension of any money they’ve put in to start the business. But in most circumstances, resources are limited and alternative sources of funding must be found to ensure continued business survival. Traditionally banks and other commercial lenders would be happy to provide solid businesses with access to a rolling credit line. However, with the recessionary frost came an unwillingness to lend, which has prevented thousands of small businesses from obtaining the finance they need to expand and grow. Business owners faced with an inability to lend from mainstream banks face two distinct choices: whether to seek private capital from an investor, or to approach alternative business lenders to discuss financing options. In most circumstances small business owners would prefer loan funding over equity finance and, with investor business sentiment at an all time low in Europe and the US, businesses are less likely to find the right deal privately in this climate. Loan funding is regarded as one of the cheaper options for raising money as a business. However, without an established trading history, new businesses can find it difficult to raise the cash they need at affordable rates. For those open to pursuing alternative funding facilities, there are still mainstream lenders prepared to offer a variety of products to business owners. While overdrafts are becoming more tightly restricted by the banks, merchant advance facilities have reemerged as the alternative of choice for most business owners. Allowing finance to be raised against future card sales, this type of facility enables owners to release the potential tied up in their company. Margin advances are now becoming an increasingly viable alternative, with the security over card sales allowing lenders to keep costs down. For those at an earlier stage of the business development cycle, there are also opportunities in the form of micro loans and advances to meet imminent payment demands. Advance Funds Network (click here for more information about Advance Funds Network ) provides businesses with a range of different funding opportunities. They suggested that business owners keep an open mind to varying lending structures in order to get the best deal. “Some business owners feel nervous about lending against future card sales. However, in many cases it can prove to be one of the more cost-effective options for those businesses that are having difficulty securing finance. Whether it is an advance or invoice finance facility, providing businesses with the liquidity they need is essential to protecting jobs and aiding growth in our economy, and owners should be prepared to consider all possibilities when looking for a source of funding.” Sourcing Alternative Funding For Your Business is a post from: Daily World Buzz
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Sourcing Alternative Funding For Your Business
Posted by Breaking News Online
on August 6, 2013. Filed under News.
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