Most business owners become aware that at some stage of their company’s growth they need to seek a means of financing. Although traditional bank loans may be your first thought when it comes to funding, there are other methods of ensuring that your business has the cash it needs to keep growing. Here are some important financing tricks that every business owner should be aware of.
Apply for a Collateral-Backed Loan
If you are unable to qualify for a traditional loan because your company is just starting up or has a questionable credit score, consider applying for a collateral-based loan. Backing the loan with tangible assets such as equipment or receivables gives lenders the confidence to allow you to obtain the funds you need to handle necessary expenses.
Look for Grants
Grants provide you with funding that carries no interest and does not even require repayment. However, the requirements for acquiring grants are very strict, and you’ll face a lot of competition during the application process. Despite the difficulties, this is still one of the best financing tricks for eligible candidates such as veterans, women, and minorities.
Use Credit Cards
Even if your company is unable to acquire funding through a loan, business credit cards provide a viable alternative. The requirements for obtaining credit cards are generally less strict, and you can use them as revolving credit lines to handle urgent expenses. If you don’t qualify for a standard credit card, start out with a secured credit card and use it to build up your credit score.
Consider Debt Refinancing
Once your business has improved its credit score or arrived at other milestones that make it eligible for long-term loans, you may want to consider refinancing existing debt. This is advisable only if a new loan provides you with terms that are superior to those offered by your current short or long-term loans.
Have a Savings Plan
One of the best financing tricks you can implement is to establish a savings plan for your business. Even if your company is struggling, put aside a percentage of income for emergencies and unanticipated expenses.
For more financing tricks for businesses, contact Green Leaf Capital.