Funding Your Business
What many people fail to realize is that starting a business generally requires money. Sometimes it’s easy to come by – conventional loans and angel investors are out there and can provide assistance. However, sometimes it’s not so easy and you’ll have to look elsewhere for options.
Why Obtaining Loans Can Be a Challenge
After the financial crisis of 2007-2008, lenders became more strict on requirements. Small businesses were moved to a riskier category and many banks stopped offering small business loans at all. Conventional loans became harder than ever for small business owners and entrepreneurs to obtain.
If you fall into this category, don’t worry. Other options and programs exist that you may be able to take advantage of. They include:
Government Small Business Administration Loans
The government has paid attention to the plight of small business owners, as demonstrated by the creation of the US Small Business Administration, or, SBA. The administration offers lending programs that differ from traditional loans in that they guarantee a certain percentage of loans, taking away some of the risks for lenders and providing back up for small business owners to obtain the financing they need to get off the ground.
Local banks and authorized SBA lenders have applications available to get started.
Credit Unions as an Alternative to Banks
While credit unions have become just as popular as banks in recent years, there is still a difference. Credit unions are member-owned, not-for-profit institutions that offer more flexible programs for members than banks.
Line of Credit
Many small business owners fail to look into business lines of credit, which provides businesses with the opportunity to borrowed money as needed and to repay only when it has been used. These work much like a credit card, meaning that the interest will add up when only the minimum payments are made. However, they remain a viable option.
Interested in a new business opportunity or initiative? Need advice that doesn’t relate to financing or to make sure you’re getting started in the right way? Now is a good time to speak with an experienced business attorney like Michael Hynum with Hynum Law. Take the time to set up a consultation. We look forward to working with you.