If you choose to not have a physical location for your business, you may want to consider offering your goods and services via a website or mail order catalog. This is a great way to reach a large audience all at once, but business start-up costs associated with this mode of doing business can be expensive as well. By the time you pay someone to create your website, host it, register your domain name, and start a merchant account, you have made quite an expenditure, unless of course you are capable of building your own website, which many people are.
Do you have a new or growing business? If you do, sooner or later you will need business financing. Of course, if you are like most business owners, your first inclination might be to look for a business loan. Unfortunately, business loans can be very hard to get, take weeks to set up and don’t fit too well with most businesses. You might be better off looking for alternative business financing products.
I am going to discuss two alternative business financing products. As opposed to the traditional business loan, they are easy to obtain, can be set up in days, and they grow as your business grows.
If your biggest business financing challenge is that you have clients who take as long as 60 days to pay their invoices, then the solution is to factor your invoices. Factoring, or invoice factoring as it is often called, accelerates your clients’ invoice payments and gets you paid in about 2 days. Factoring does not involve changing your customers’ payment habits, but rather, financing your slow paying invoices through a factoring company. With factoring, you can capitalize on your invoices and get the funds you need to meet payroll and pay suppliers.
Purchase Order Financing
If you are a reseller or wholesaler and your biggest challenge is that you cannot afford to pay your suppliers, then purchase order financing is the best tool for you. Purchase order financing provides you with the necessary funds to pay your suppliers (usually by a letter of credit). This enables you to buy the goods to fulfill your orders and make the sale.
Both purchase order financing and invoice factoring can be obtained from a factoring company (rather than a bank). Both solutions are very affordable, but they work best when the business has profit margins of 15% or more.
So, if you own a business that needs financing, be sure to look at these non-traditional business financing tools.
Business Funding Source
When you decide to open a business on your own, often times the excitement will have you ready to launch your idea right away, however one thing that may be holding you back. You have several options in gaining much needed capital to begin to implement your business ideas. This article will include some ideas you can use to find funding for your business and begin to make the capital you need to grow.
So where can you begin to find funding sources for your business to gain capital? First place you should look is at the support of your friends and family. Occasionally, some people will get lucky and be able to find a lender within their family or friends to begin a business. You will want to be extremely careful however, borrowing from close friends or family can hurt your relationship with them, if extreme care for repayment is not made.
Another excellent avenue is to investigate any type of small business loans your government may offer. Many governments will offer new business owners loans for business start up, or disaster assistance and training. Also with the fast growing internet population there has been websites that have been created that allow lenders and borrowers to come together in efforts of starting up a business.
Another idea is to seek out venture capital firms; these are types of financial businesses that pulls together all partners resources and use these funds in efforts to help a new business entrepreneur being their business. In addition, look into your home equity, these types of loans typically called a second mortgage, allows you to borrow money from an institution by using the equity contained within your home as a form of collateral.
Lastly, credit cards and wealthy investors are two other types of funding sources you can investigate. Using your personal credit card can be a very tempting funding source; this typically works if you have enough of a credit limit as well as the means to pay it. With credit cards, you will want to be extremely careful in using them for your business venture and make sure that you keep up with the minimal payments at least; otherwise, you could end up hurting your credit and its rating.
Wealthy investors you use at your own risk. They didn't get wealthy by giving there money away.