Big banks are currently disbursing more small business loans than at any other time in US history. Even so, they still turn down almost 75% of those who apply.
About one in four small business owners who apply don’t hear positive news. What should the others do? When looking for a loan or funding, banks may not be your only option, but they should not be.
If banks have turned you down or you know it’s not worth your time to apply, here are three other ways to get money for your small business.
A Merchant Cash Advance
A merchant cash advance (MCA) is more likely to help you than a loan. An MCA is not a loan; it is a funding source. This means it doesn’t have to follow the rules and standards for regular loans.
You could get up to $500,000 in funding in exchange for a small share of the deals you make in the future. If your business has been open for more than six months and makes more than $10,000 a month in sales, you have a good chance of getting accepted.
Companies like Payvant Capital provide funding options, and these might be your best choice if you need financial support quickly. You may be able to confirm your funding within 24 hours after submitting the application entirely online.
Crowdfunding
We have all heard about ideas that went on to become billion-dollar businesses thanks to fundraiser sites like Indiegogo.
Can these sites generate a financial surge that surpasses your expectations? Yes. However, you can’t simply upload your movie online, click “refresh” every 15 minutes, and expect financial gains.
Prepare to invest a lot of time and money in marketing your effort if you decide to try this. You will actually leave your current industry and work for a few months in the crowdfunding marketing business.
This approach could be successful if you have an entertaining business idea that would translate into an exciting movie and engage people’s interest. It may be more difficult to produce buzz and raise money if you’ve created a new, unsexy SaaS. This explains why only a third of Kickstarter projects reach their funding goals.
Angel Investors
Someone else can invest in your business as well. You may add a seasoned expert and an influx of cash to your business. Harvard Business School found that businesses with angel investors have a higher chance of success and growth.
However, the money comes with strings attached. Generally, you’re relinquishing a portion of your business. If you’re not careful, you might end up giving up a lot more than you anticipated. It’s not as simple as giving up future money or a share of future income. You could also be giving someone else the power to make decisions and have a big say in how your business is run. Such an arrangement might make the line stick together.
This page contains additional business ideas and provides all the resources you need for your business.
When the bank says no, these are, of course, the only three options. These options are the three most common ones, and one of them might be the best choice for your business.
Before agreeing, make sure to carefully consider each option!
