In this post credit crunch society, it can be difficult finding a bank that wants to part with their cash, even when it’s for a really good cause. If your business needs funding for a new project or expansion, it may take a bit of creative thinking and persistence to get the financing you need today. However, if you are dedicated and patient, it is still possible so here are 5 of the best ideas to get you started.
1. Investigate microloans
If your company has a fair credit history and a solid business plan, you may be able to get a microloan from one of these new style lenders, even if the traditional banks have turned you down. These lenders typically offer sub 50K loans to small and medium businesses that they believe to be low risk, either because they can see there is the turnover there to guarantee payback, or because they can see your plans for the business are solid and well thought out.
2. Asset based lending
As traditional banks have withdrawn their lines of credit, companies offering asset based lending have surged forwards to plug the gap. This means that even if your businesses credit record is not the best, you still stand a chance of getting the funding you need providing you have enough company assets to offer up as collateral.
3. Web based programmes
If you only require small amounts of capital, the web has opened up new ways of finding funding from small investors and peer-to-peer lending schemes from all over the world. If you have a good idea, chances are there is someone out there who is willing to finance it for a small amount (usually <25K) and over a short term such as three years. Crowdfunding is another web based niche that is likely to come to the fore over the next few years. This essentially allows investment angels and private investors alike to fund small amounts towards your project on a group basis.
4. Check all the big banks
Just because your bank has turned you down, doesn’t mean every large bank will have the same outcome. If your business is established and has good, solid future plans and if your credit record is good, chances are you can still get funding from a lender who hasn’t been caught out in the credit crunch crash. Make sure your bookkeeping is up to date and that all your P&L’s are clear and accurate before you go to meet them, as banks wont be interested in hearing any anecdotal success stories, the numbers will need to speak for themselves.
5. Don’t forget your manufacturers
Vendors have a vested interest in your business being successful. Many business owners will overlook this avenue as a potential source of credit, but for many vendors they would rather see you survive a rocky period than lose the business partnership they have developed with you. If you can show them your profitability, they might just take a chance on your business.
Ellinas Finance is a Public Company Limited in Cyprus providing different types of loans to companies and individuals, in combination with various financial services in Cyprus