SME Toolkit
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How Do I Finance My Business
Part of the Buzgate / SME Toolkit Learning Series
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There are many ways to finance both the start-up and growth of your business. For start-ups, the most common funding sources include personal credit, family and friends. The U.S. Small Business Administration (SBA) also offers various loan products whereby a lender provides the actual loan to the borrower and the SBA guarantees a portion of the loan (between 50%-85% depending on the program) acting much like a co-signer. This helps lenders be more comfortable with a loan that they might otherwise not approve, such as a loan for a start up, or a borrower that has less collateral than a bank requires.
There are other types of business financing tools that facilitate access to capital under certain circumstances.
For example, if you possess commercial real estate, you can borrow against the value of the property using a Small Business Commercial Loan . Download a free Guide to Commercial Mortgages to learn more.
If you have been in business two or more years and have a history of accepting credit cards as a form of customer payment, you may be eligible for raising capital against the value of those credit card revenues. This cash advance is satisfied by making payments as a percentage of future credit card sales. Visit Small Business Alternative Funding to learn more.
A further innovative approach suited to financing growth without giving up equity is to utilize a process called factoring. Factoring refers to the process of selling your accounts receivable invoices to a third party who then performs the function of collecting the invoice. Called factors, these agents can move quickly to get funds to a business for a fee as a means of providing financing for growth. Visit Small Business Financing Using Accounts Receivable to learn more.
Focus Points
View SME Toolkit videos, media, and sign up for RSS feeds.
There are many ways to finance both the start-up and growth of your business. For start-ups, the most common funding sources include personal credit, family and friends. The U.S. Small Business Administration (SBA) also offers various loan products whereby a lender provides the actual loan to the borrower and the SBA guarantees a portion of the loan (between 50%-85% depending on the program) acting much like a co-signer. This helps lenders be more comfortable with a loan that they might otherwise not approve, such as a loan for a start up, or a borrower that has less collateral than a bank requires.
There are other types of business financing tools that facilitate access to capital under certain circumstances.
For example, if you possess commercial real estate, you can borrow against the value of the property using a Small Business Commercial Loan . Download a free Guide to Commercial Mortgages to learn more.
If you have been in business two or more years and have a history of accepting credit cards as a form of customer payment, you may be eligible for raising capital against the value of those credit card revenues. This cash advance is satisfied by making payments as a percentage of future credit card sales. Visit Small Business Alternative Funding to learn more.
A further innovative approach suited to financing growth without giving up equity is to utilize a process called factoring. Factoring refers to the process of selling your accounts receivable invoices to a third party who then performs the function of collecting the invoice. Called factors, these agents can move quickly to get funds to a business for a fee as a means of providing financing for growth. Visit Small Business Financing Using Accounts Receivable to learn more.
Focus Points
- US SBA Loan Products
- Types of Business Financing Tools
- Small Business Commercial Loan
- Download a free Guide to Commercial Mortgages
- Small Business Alternative Funding
- Small Business Financing Using Accounts Receivable
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