When you think about borrowing or lending money for your small business you may think of turning to your local bank, asking family or friends, or charming venture capitalist or angel investors. However, the financing landscape has drastically changed over the last several years where there are more options than ever before.
If you're a small business owner and looking to secure funds to help grow your business, then here are the alternative financing options to consider.
- Lending Club is flexible option that issues $15,000 to $300,000 in a loan amount, 8% to 32% APR, and approval under one week.
- Funding Circle is recommended for established businesses looking to grow. Loan amounts range from $25,000 to $500,000 with an APR of between 7% to 26%.
- Prosper is a solid decision for startups seeking $2,000 to $35,000. APR is at 6% to 36% and approval can occur in as little as two day.
PayPal Working Capital is a low-risk loan that has flexible payment options, no credit check, and a fixed fee determined by the amount of your loan, the repayment percentage, and your sale's history.
Square Capital provides personalized loans with fees between 10% and 16% of the amount borrowed. To ensure that you don't fall behind on your payments, Square will take a percentage of your daily card sales to pay off the loan.
Another popular online lending option is Kabbage. Resembling a line of credit, Kabbage uses your uses your, accounting data, seller history, and reviews to determine how much money you'll receive. Funds are deposited into your PayPal account with interest rates between 10% and 18%.
Another option is equity crowdfunding where you would exchange shares for the cash that you need.
You may also have access to lines of credit through your current credit card company, but just make sure that the interest rate is low enough to be worth considering.
You could also side hustle and get a side job to make some quick cash each month.
The main perk of product presales is that you don't have to borrow money elsewhere and the funds go directly back into your business.
Best Alternative Financing Options to Grow Your Small Business was originally published on Due Payments Blog by Renzo Costarella.