The Pains of Funding in These Times

Financing a business is a hard task in an already tough economy. Banks are being asked to toughen their already harsh conditions for qualifying borrowers, especially when it comes to businesses, small businesses in particular. Because of this many small business owners have been forced to make tough consolidator decisions. Some of those are recognized in daily unemployment reports, or in closing disclosures, or any business cost-cutting actuary these days. It seems that is the way business is being done while asking consumers to have confidence in their businesses. The irony is not at all lost on consumers who are in turn tightening their own belts. The good news is there are lenders still investing in the economy, even start ups and small business owners.

With banks shunting small business owners, private lenders, angel investors, and other money-based organizations are stepping in to lend money to small businesses and entrepreneurs for startup cash or to supplement their small cache of cash for those times they are strapped or trying to do more with their business.

Finding a lender or cash to fund projects for your business is no longer an impossible task, as there are lenders practically begging business owners to apply. The one requirement I have seen time and again is that the main borrowers have good credit or find someone that does to become a cosigner on the application. This ensures that they qualify the borrower for the loan and that they are actively selling loans.

There are others ways to raise money, of course. Crowd funding, or fund raising is quickly becoming a staple in many corporations around the globe. This phenomenon has been helpful to many organizations that can say they benefited from a crowd fund agency. Crowd funding works on the principle of many supporting one, Business and organizations have used and sustained the practice of companies like Crowd Tilt, Kickstarter, Indiegogo, and other crowd funding companies with the sole purpose of helping companies raise money for everyday operational costs.

Angel investors are hard to find but once you do, you’re in for a treat. The hardest requirement is the need for a business plan, which will be read by a professional or consulting company hired by the investor to make sure they are investing in a good risk. Though some investors require credit checks, others simply require a small to moderate portion of your business’ lifetime profits. If seeking and investor be sure to read any agreement form and also be ready to share your income with the investor/s that take you on as a partner.

Unsecured loans are becoming very popular. Typically, unsecured business loans come in smaller amounts than a secure line but are typically easier to get. Some of the hoops are eliminated to make it easier for the borrower to get the cash they need. There is no collateral required to get this type of loan, but can cost a great deal in the end. It is best to pay attention to the fine print when going for these types of loans. Unsecured loans for small businesses range from about $5,000 to upwards of a millions dollars, and can cost just as much. If you plan on going for an unsecured loan please read the fine print,

As banks tighten their belts, small lenders and investors are taking a chance on established and new businesses. These small lenders have in some ways, simplified the application process to help small business owners and entrepreneurs qualify for funds they would not otherwise qualify to get with traditional lenders. This move has helped a lot of businesses that would not other wise qualified for traditional loans with banks or lenders. With the options available to you for business loans be sure to explore them all when seeking funding. Like regular loans, go over the terms and make a good decision that will benefit both you and your customers during the hard times.