When your business needs an infusion of cash, try one of these avenues. One of them is sure to put your business back into the black.
There are thousands of individuals and businesses that are in the venture capital market. These entities seek out viable businesses to invest in for a stake in future profits. In return for a certain percentage of equity, venture capitalist will give your business cash for operations, marketing, or expansion.
To find viable and genuine venture capitalists that are safe to be in business with, consult with a financial attorney or an accredited certified venture capital association. Be prepared to hand over details about your business just as you would if you were applying for a bank loan. You'll need to present items such as profit and loss statements, bank statements, receipts, cash flow reports, and more.
Future Receipts Loan
If your business is in need of a short-term loan to get you through a cash crunch but you have less than stellar credit, a future receipts loan is an option. You provide the lender with historical evidence showing that your business brings in a certain number of receipts each month. Depending on that number, the lender will agree to advance you a sum of money. You will repay that loan by signing a contract that entitles the lender to a percentage of future receipts from the business up until the loan plus interest is paid off.
One disadvantage to a future receipts loan is that your business's future earnings will be severely hampered until that loan is repaid. This short-term solution could morph into a long term cash flow problem unless your business is able to weather the reduction in revenue. If it can, a future receipts loan is a great alternative for business owners with poor or no credit. Future receipts lenders can be found online. Each loan will have unique terms attached to it, so you need to read all the paperwork carefully to ensure it's a good fit for your type of business.
Bank loans are one of the best ways to borrow money if you and your business have decent credit and are eligible. With a bank loan, you don't have to give up equity in your company or release entitlement to future earnings. As long as you can make the payments as arranged in the terms of the loan agreement, your business is safe.
To get a bank loan, you will need to confer with a loan officer at a bank that offers loans to businesses of your size. You'll need to fill out forms, but the majority of your work will be in preparing the documentation that accompanies the forms. These will include, among other things, a mission statement, C.V.s of all officers in the business, and an assortment of business and personal financial statements. Once the loan is approved, and you repay it successfully, you'll likely be able to enjoy a solid business relationship with that loan officer in the future. If you find yourself in need of a business loan again, the process will be more straightforward.
All businesses need financial help at some point along the way. The key is to know the options available to you as a business owner and to make the right borrowing choice.