Every Small Business Needs Capital

Every small business needs to finance their businesses, and not just at start-up. There is often a continuing need for liquid capital to run the day-to-day operations of any business, large or small. The trick is finding it, if it’s not coming from cash flow. In this economy, especially, traditional forms of finance are harder and harder to find or to qualify for.

10 Ways to Finance – But Which One to Choose?

In past posts, I’ve written about the growing trend of small businesses to use credit cards to finance everything for equipment to payroll. This, of course, is a very expensive way to raise capital, but often it seems the only way out.

I’ve also written about factoring as one of the few true options open to small businesses or ones with poor credit ratings. Unfortunately, factoring is not as widely used in the US as in many other countries and, as such, not well understood.

Factoring Too Expensive? Not hardly!

Factoring usually takes a rap for being too expensive, but factors are often the only option open and they are usually very flexible because they want to establish a long-term relationship with their customers. And for companies in bankruptcy, factoring is practically the only fundraising method courts will allow since factoring is not debt financing; it is an asset sale.

The First 5 of 10 Ways to Finance Your Business

Recently, Inc.com published an article which summarized 10 well known methods of business finance, 2 of which are above. Here are 3 more ways that a business can raise capital. They are, with my comments in brackets:

=> Getting a bank loan – (we wouldn’t be having this discussion if this was an option for most small businesses)

=> Tapping into your 401(k) – (robbing your retirement fund now, hoping that in the future you can replace it. That’s what that US government has done which is why the SS Administration is bankrupt!)

=> Crowdfunding – (only useful for small amounts, usually one-time, and only for short-term financing. But still, an innovation that can be useful depending on the borrower’s needs.)

More Ways to Finance Your Business to Come…

Tomorrow, I’ll go over the other 5 methods you may want to look at for raising funds for you business. One of them is truly innovative and has been helping thousands of small businesses get started or keeping on growing. This form of finance has revolutionized the way 3rd world small businesses get started!