Alternatives to SBA Financing

SBA loans aren’t the only game in town; there are some alternatives to these loans that many small business owners might not know about. When you break it down, a SBA loan is still just a bank loan and if you treat it as such, it will still come down to many of the same factors and elements that are required for banks and other lending institutions to loan you the money.

SBA financing alternativesIf you aren’t willing to fill out mountains of paperwork or put down a personal guarantee, a SBA loan may not be right for you. Likewise, if you need cash right away, an SBA loan may not be suitable. In this instance, invoice factoring might be right for you.

Invoice Factoring

Invoice factoring? If you need access to capital right away, invoice factoring is the best way to get it. It is really just an exchange of cash for an asset. A provider can have the cash in your hands in less than 2 days and usually receives repayment through a fixed percentage from your daily receipts.

Equipment Leasing

Another way to get the equipment and supplies you need is through an equipment leasing program. With this program, you bypass the banks and the loan stage and skip right to the part where the equipment is delivered to your business. With equipment leasing, you not only have access to the best equipment when you need it, but you can get the equipment for very little money down and some reasonable monthly payments. Equipment leasing is becoming more popular with many of today’s small businesses and is one of the better alternatives to an SBA loan. With equipment leasing you get new equipment, low monthly payments and less hassles than you would normally get with the loan process.

Working Capital Loans

There is another alternative to SBA loans that is fast becoming a popular competitor; it’s called the working capital loan and it is a loan based on the gross sales of your company. Rather than relying on a credit file, the lenders look at your ability to make the monthly payments for the loan. This loan is especially good for new startups and small businesses that don’t have much in the way of a credit history but still need funding to take their business to the next level and remain competitive. A working capital loan is a much easier alternative to a SBA loan and this has many small businesses choosing it over SBA loans.

The SBA loan program is a good opportunity for startups and small businesses but there are alternatives and there is something available to suit every business’ needs. Finding one that’s right for you is easy and could save you a lot of time and hassle in the future.

 

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Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

8 Comments
  1. I’ve used the working capital loan once in the past. It’s fairly useful when having a business that makes enough to cover payment. I feel it’s the best of the bunch especially since I make a fair amount of money from my business per month, so having that really makes things so much easier.

    • For me, working capital loan is the best too because it is flexible. I particularly like the revolving type. You can use it like a credit card. What I mean is that its always there in the background, when you need it, you purchase whatever you need. Then you pay it off and you have the full amount ready for use again. This will give you the freedom to act quickly when you want to take advantage of new opportunities.

  2. Huh, I had no idea there was so many different ways of getting financing for a small business. I wish I looked more into it when I started my business. Oh well, live and learn I suppose. Thanks anyways for the info.

  3. I had no problem with the amount of paperwork to get a SBA loan, if anything it’s far better than most loans, at least it was for me. I had an overall better experience with it than I did for past loans of any sort. Plus it was just better in terms of the amount with the loan.

    • George, I’m glad that you had a good experienced with SBA loan. What’s good about SBA loan it that the interest rate is much lower compared to other commercial loans. The thing I don’t like is that it has many requirements and paper works.

  4. I didn’t realize that there were that many available options for people with small businesses. How wonderful. I definitely will be looking into the equipment leasing option in the near future. Your articles are very informative. Thank you.

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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

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