38 Unconventional but Smart Sources to Raise Funds for Your Business
As we can see, big banks and money lenders are tightening up their regulations, and for small people in business, venture capitalists are also becoming so cautious about their investments.
So, if you have a business plan for a start-up or want to expand your existing business, here are some unconventional, but innovative ways to find funds.
All of these ideas are not applicable to all business people. You need to carefully consider your unique situation and needs to identify which all will be apt for you.
It is also advisable to speak to a good financial advisor before considering your finance options.
You may find only an overview of options, which you may further investigate based on your requirement to identify its worthiness to you.
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1. Title loans: If you paid off for your house or car, then you can think of getting a loan against it.
2. Consolidation of credit card: You can avail a debt consolidation service to free up the existing credit to use it again.
3. Leverage retirement accounts: It is possible to avail 401(k) to avail cash advance for various purposes.
4. Get cash advance: Credit cards offer cash withdrawals too, which you can take advantage of, but beware of the interest rates.
5. Borrow against whole life insurance: It is possible to borrow against an existing policy for whole-life insurance, but the policy will be terminated if you default.
6. Credit card debt: You can use credit cards to cover temporary gaps in funding as far as you are a specific plan for repayment.
7. Cosigners: If hefty bank loans are not getting approved, then it is ideal to get a cosigner to work with for boosting your credit rating.
8. Credit card providers: Many of the credit card organizations offer loans to businesses which are not eligible for bank loans.
9. Payday loans: This is a mode of credit which may help you fill short-term financial shortfalls.
10. Friends and family: Comfortable and risk-free mode of financing, but make sure to make its documents and don’t default on paying back to ruin the relationship.
11. Negotiate delays: If you are already on debt on credit cards, then open a negotiation to hold the payments to use it for business cash flow.
Work on personal finances
You can go creative in handling personal accounts and find funds to put into the business.
12. Liquidate the assets: You may sell your valuables to raise funds, including car, house, gold or whatever.
13. Cut cost: Find some savings by cutting off the avoidable expenses in your personal budget and tightening up the finances.
14. Keep the day job: Find a steady income from your day job too along with running the business to patch the up and downs.
15. Try to get a second job: If one job is not enough to meet up the finances, try to get another part-time or freelance job too to find funds for business.
Go for low-level lenders
It is not always necessary to queue up at a leading corporate bank. You may explore the option of smaller financial institutions or individual lenders to find funds.
16. Barter: Meeting business needs doesn’t always need hard currency. You may mutually trade with other businesses or vendors for services or equipment needed.
17. Microloans: There are many lenders offering microloans for small-scale entrepreneurs.
18. Try amateur shares: you may get shares to bud capitalists with a promise to pay back the share from your profit.
19. Peer to peer lending: There are many online platforms you can explore like https://www.libertylending.com putting forth peer-to-peer lending options.
20. Get expert advisors: Advisors tend to put money on behalf of their opportunity to get involved, explore such opportunities.
21. Approach industry leaders: You may ask other businesses or individuals who are a leader in your niche. It is easier to make them understand your plans and goals.
Putting forth some creative and innovative ways to raise funds.
22. Vendor financing: Offer various leasing and payment options to your lenders to buy supplies and services.
23. Assign a CD: Raise instant finances over a certificate of deposit.
24. Commercial credit lines: Used often by business franchisees, this is similar to the vendor loans.
25. Revolving loan fund: Access a revolving loan fund, which once paid back can be used to raise money for another small entrepreneur.
26. Advance payment programs: If you hold strong credit card sales potential, you can sell a fixed amount based on future receivables on credit cards.
27. The supplier guarantees: Get your suppliers guaranteed by a third-party financial institution on payables.
28. Purchase order financing: Similar to advance pay, the purchase order financing also helps to raise finances based on the future scope of earnings.
29. Margin loans: Apart from the purpose of buying securities, you can get these types of loans with comfortable repayment terms, but defaulting on it may be troublesome as your securities will be lost.
30. Investment banks: Investment banks have various loan products for small business entrepreneurs.
31. 504 Loans: This is a largely underutilized program by SBA which can help entrepreneurs to acquire new commercial properties.
32. Factoring: Factoring on accounts receivables will allow you to pledge the open invoices for a cash advance.
33. Royalty financing: you can think of selling your rights on the revenue percentage from business to get upfront fund.
34. Community loans: You may raise funds from members of the same community/business domain if there is a matching community program.
35. Security based lending: You can pledge securities for short-term funding.
36. Venture leasing: Unlike venture capital, venture leasing which secured by any equipment and not business equity.
37. Customer financing: If customers have a significant gain in your business being existent, seek for their financial aid.
38. Asset-backed loans: Conventional collateral-based loans from banks and other institutions.
In fact, it is not a complete list, but you can still find more options to raise funds for your business on just being smart and informative.