One of the biggest challenges that small business owners face in the early years of launching their startup is securing funding. If you have an amazing idea for a business and want to monetise it, you should think about setting up your company and monetising it. However, starting your own business is not an easy task. There are plenty of challenges and hurdles that you will have to face, the biggest of which will be to secure adequate financing that you can use to fund your operations. Capital is required for numerous of different aspects, ranging from setting up the company offices to putting up the funds for production.
Funds are often in scarce supply for most new businesses, and the lack of funding is one of the main reasons why so many business startups tend to fail. However, there are plenty of different financing options that small business owners can check out to keep themselves in the green. Here are some of the many different financing options that are viable and ideally suited to the needs of a small business.
One of the best financing methods available for small businesses is factoring. Basically, factoring allows you to put up your accounts receivables as collateral in order to get hard cash up front. Obviously, the factoring company will take a percentage of the accounts receivable as payment for providing the service, which is usually around 10% of the total amount put up. You might have to pay interest as well. For instance, if you opt for a two-percent interest rate on an advance of thirty days’ receivables, you will be paying an interest of 24 percent per annum. Factoring is a good idea for small businesses that have rising accounts receivables which hinder their cash flows.
Small Business Loans
Local lenders such as www.barclayfinance.com.au also offer loans that are specifically designed for small businesses. There is a marked difference between conventional loan options and the ones that are directed specifically toward small business owners. Benefits include reduced interest rates and extended payment periods, and you also get the option of keeping your company’s assets as collateral as well. For instance, many banks offer the option of taking out a loan if your inventory stock stays above a specific limit.
A number of credit lenders have now gone online in a bid to improve their processes and reduce the time it takes to apply for and get the loan amount. You can simply sign up for a loan amount by filling out a form on the company’s website, and they will take it from there. The information will be verified by the company’s staff and the loan amount will be credited to your bank account subsequently. Online lending is a good option for people who require just a bit of funding to tide things over until the next month begins. Your application can be processed very quickly, and the funds will be transferred into your bank account within a couple of days!