Commonly Overlooked Business Financing Options

Mon, Oct 15, 2012


No matter what kind of business it is, if there is one thing that all business owners have in common it’s this: How to get funding to keep the company going. That makes perfect and total sense being that without money, a business cannot continue to operate, right?

So, if you’re a business owner and you’ve been looking for some financing options that may not be as obvious as others, here are five recommendations that you just might want to think about. Every little bit helps and we just wanted to do our part by providing a few more avenues:

Family and friends. This one is not necessarily “commonly overlooked” so much as it is “commonly avoided”. That’s because most of us have heard that it’s not the wisest thing to mix money with personal relationships. But you know what? That’s usually only the case when the parties involved are not clearly communicating, honest about their intentions and true to their word. Plus, a bonus with going this route is that (usually) they will not charge you the kinds of interest rates that a bank or credit card company would.

An angel investor. There are some people who are willing to provide a considerable amount of capital for a start-up business. Initially, it may seem like it’s out of the goodness of their heart (that’s a part of it), but there is a business element to it as well: they oftentimes are willing to invest in exchange for some ownership equity. For that very reason, it’s a good idea to make sure that you and your investor have more in common than the money they have to offer and your desire to take it. There also needs to be somewhat of a compatibility, vision wise, for the business too.

Home equity loans. If you’re looking for a way to borrow money that is relatively easy and cheap (rate wise), taking out an equity loan is always a viable option. The main thing to keep in mind with going this route is that if your business does end up closing its doors and/or you have been unable to keep up with the loan’s terms and conditions, you run the risk of foreclosure.

Debt financing. It actually sounds a bit more “potentially taxing” than it is. Debt financing is basically long or short-term loans that can be secured from financial institutions or banks against the securities of your property or assets. Traditionally, the loans are granted for the maximum time of 25 years once the project is approved. The thing to keep in mind is that it must be secured by either the mortgage of the property or the assignment of stocks, shares or other relevant assets.

Community Development Block Grants. When it comes to businesses, a lot of times people think that commercial financing is the only option that is available to them. That is certainly a popular and realistic choice, but depending on the kind of business that you have, there are also Community Development Block Grants that you might want to consider looking into as well. If your business is community service oriented, visit Portal.Hov.Gov and put “Community Development Block Grant Program” in the search field for a list of grants options. And remember that with a grant, you don’t have to pay the monies back. That makes this option even better!

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