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Statistics indicate that well over half of small businesses continue to struggle with financial difficulties due to the ongoing pandemic. However, many of these companies are unable to qualify for traditional bank loans. Here are some alternative methods of business funding to consider if your company needs additional financing.

Utilize a Business Credit Card

Using a business credit card for company expenses allows you to keep your business and personal finances separate. It can also assist you in improving your company’s credit rating if you make your monthly payments in full and on time.

Apply for an SBA Loan

Even if you do not qualify for a standard bank loan, you may be able to participate in a loan program offered by the U.S. Small Business Administration. The SBA guarantees loans for companies that meet its requirements, which reduces the risk for financial institutions lending to small businesses. If you qualify, you can enjoy longer repayment terms and relatively low-interest rates.

Use a Crowdfunding Platform

Crowdfunding platforms offer business funding by putting you in touch with backers utilizing an online platform. In return for their investments, you offer backers rewards of company products or services, equity in your business, or interest on loans they have provided.

Approach Venture Capitalists

Venture capitalists invest in companies in exchange for business equity. They look for businesses that have growth potential. When they offer to fund, they often expect to become managers or board members.

Obtain a Merchant Cash Advance

When you receive a merchant cash advance, you obtain a lump-sum amount of business funding that you pay back daily with a percentage of your company’s credit card earnings. Merchant cash advances can be acquired quickly and fairly easily, but fees and rates are higher than with other forms of financing.

Finance Invoices

Invoice financing involves selling unpaid accounts receivable to a lender, who then advances you a portion of the amounts due. When your clients pay their bills, you receive the balance of payments minus the fees that are owed to the lender.

For more advice on alternative methods of business funding, contact Lode Capital.