The idea of opening up your very first small business nearly coming into a reality can be a lot to take in. it’s both exciting and scary. However, going through the tedious process and looking for funding can be stressful.

One of the primary factors that keeps entrepreneurs from turning their idea from paper to reality is lack of capital. Securing this can be difficult however, there are options to help you find money to use.

Albeit there are numerous loan service options for small business owners, startups, and first-time entrepreneurs alike, chances are these people know little to nothing about which one to apply for; and how how tough it is to get approved for one. Here are some of the options available for aspiring business owners to finally get their merchandise running.

Bank loans

One of the first and most common option entrepreneurs go straight to to inquire how they ought to start their business is with a bank loan. It’s not shocker since it’s the traditional way of financing route—to meet with local banks and inquire/apply for a business loan.

However, you have about 50-50 chance to get approved for a bank loan. Unless you have a good credit history, you shouldn’t wipe a sweat. A good tip to get approved fast and seamlessly is to present a good business plan and your gains projection to give them a clear view of what you’re proposing, how the money they’re going to lend you grow.

Crowdfunding

These days, there are a lot of platforms and mediums where we can promote our goals or project concept, and get financial backing from those who like your vision. Crowdfunding has opened doors for a lot of business projects. It’s one of the well-known form of acquiring funding.

There are a lot of crowdfunding sites you can choose from to promote your business project. What you do is set up a page for your business/creative project. Create promotional materials, and; state your mission and vision. Once people pledge and donate funding for your project, you don’t have to worry about providing equity or paying off the money. It’s all yours; not a loan.

With the help of friend and family

A tried and tested; and a classic method of looking for financial backing, is reaching out to friends and family. Though we think it’s a bad idea to mix personal relationships with business, chances are these people are willing to extend their financial support to you.

If you do borrow from a family member or friend, make sure to lay out your formal business proposal first. Like how you would with the bank; and don’t pressure them into lending you a specific amount and time. Let it be clear whether or not your offer is a loan or an equity. And most importantly, repay on time (or as you agreed).

Factoring

This method of funding works where a company sells its assets at a lower amount to acquire cash up-front. Usually, it’s resorted to by manufacturing companies i.e. apparel, those with bad credit, and the works. Be wary though because this is a much costly way to raise funds. If you want to learn more about this, look it up or consult with a finance advisor to get to know more about how factoring works and improve your wealth management.

Business line of credit

This method is possible, yes. But just because something’s possible to do doesn’t mean you have to. If you do, however, know the consequences for this raises a lot of red flags: fall behind your payment, interest fees skyrocket and your credit score gets tarnished.

We got to give credit to this method for saving some people’s backs at desperate times. If time comes you’re out of options other than this, just remember to be responsible—pay back on time—to keep your cash flow afloat.

Online lending services

In this day and age, online lending has been a well-known alternative to traditional loans. One of the primary edge online lending services have is the swift application process, and the verdict whether or not you’re approved to apply for a loan.

Some online lenders also claim they look past your credit history as long as they see you’re a responsible borrower. There are lots of types of loans you can apply for such as quick cash loan, unsecured personal loan, and even peer-to-peer lending—good for small businesses looking for finance backing.

Are there any other options you think our readers should know about? Any tips and recommendations? Share us your thoughts!

About Chie Suarez

When she’s not at home binge-watching shows, Chie Suarez writes for MarketLend, Peer-to-peer lending or marketplace online lending company that cuts out the middleman, cuts down on red tape and puts the investors and borrowers in direct relationship.