There are very few people in this world who can say that finding finance for their business was a simple, pain-free task. For the rest of us, it’s a dreaded but necessary part of starting a business. However, nowadays we have far more options than pleading our case to an unimpressed bank manager.
In previous years finding an alternative option to traditional bank financing was like trying to find a needle in a haystack. But now there are various means of getting a product specialised to your business needs, not to mention the amount of red tape that’s been cut out of the process with some products functioning completely online.
There are plenty of reason your small (or large) business may need financing, but whatever the reason, here are some alternative option perhaps you’ve never considered before:
- Merchant cash advances
If your business mainly receives payments via credit card, a merchant cash advance is a great option for you. A percentage of your credit card sales are taken every month from your lender until the advance is paid off. Your lender is basically purchasing your future income in advance. It’s a simple way to get a quick injection of cash into the business. Merchant Money is a trusted lender and provides fantastic advise and service for merchant cash advances and any other small business finance needs.
- Invoice finance
This is perfect for businesses who struggle with cash flow because big project payments are sometimes only received well after the job is complete. This puts you in a situation where you’re sitting with a bunch of payments that need to be made now and although you will have the money, you just don’t have it right now.
How it works is essentially the chosen lender will buy your owing invoices and give you the cash immediately. Then when your clients do pay the amount owing, your lender takes a fee, leaving you with the balance.
- Property finance
This is quite a specialist option and needs a fair amount of research if you are seriously considering it. However, there are a variety of options when it comes to property development such as commercial mortgages and auction finance. This is a complex area but it can be very lucrative if done correctly so it’s worth considering.
- Asset finance
When speaking about asset finance, there are mainly two types. Firstly, you can be funded using your assets as security, also known as asset refinance.
The other main type of asset financing is when you lease out products which are specifically intended to help fund new or second-hand machinery and vehicles. There are plenty of lenders which specialise in equipment leasing and hire purchase. It encompassed anything from plant machinery to telecoms systems or catering equipment.
- Peer-to-peer lending & crowd funding
The idea behind both these alternative financing options are to create a mutually beneficial deal for all parties involved. You, as the business get quicker access to finance and your investors get to diverse their portfolio while cutting out the middleman completely. There are now numerous online platforms available connecting investors and finance seekers together.
Overall you can either go the crowd funding route where investors take a percentage of equity or peers will loan you the cash and earn interest on repayments.