Top Small Business Financing Options for 2019
Financing a small business can be challenging, whether you are starting the business or when it is in its expansion stage. According to findings by the USA, majority of small business failures are as a result of inadequate capital for operation. Apart from bank loans, there are other ways one can source capital for finding their business. The top business financing options are discussed in this article.
The first business financing idea you can use for your business is self-financing. The most common way to finance small business startups and operations is through self-financing. When it comes to self-financing, you can use the valuable asset you own to secure a low-interest loan. One should start by evaluating the assets they have if they are to finance themselves. You can take a home equity loan to fund your business, or you can use your asset as collateral if you have secured a loan.
The next financing option you can use for your business is alternative business loans. Some banks do not give small businesses loans especially in their startup phase. Small businesses are viewed as potential defaulters by most banks, and even if they are given loans, it is at high interest rates. Small business owners should look for alternative small business loan sources for they are flexible and can make independent decisions.
The other financing option you can use for your small business are angel investors. If you are in the initial stages of starting up a business, an angel investor can be a good source of capital. Angel investors in many cases are always people we know such as close friends and family members. An angel investor will lend you money in exchange for convertible debt or equity in your business. Angel investors have to believe in the future of business for they will be funding it with their own money.
Another financing option you can use for your business is credit cards. If you use credit cards correctly, they can help finance small businesses. Credit cards can help with the initial expenses if your business is it at its initial stage and it needs funds to keep operating. You can build a good credit score if you make your monthly payments on time.
The fifth financing option you can use for your business is crowdfunding. One of the most popular ways of financing small businesses is through crowdfunding. Crowdfunding platforms are helpful as one can state their business ideas and goals and if people are interested, they will invest in your business.
The other financing option for a business is product presales. Product presale is considered one of the most effective ways of raising capital for a business. You can do presales of your fully developed product before launching it.