Alternative Business Funding3

1. Alternative Small Business Funding Ideas Are you looking for extra cash for your small business? Tired of the hassles of borrowing from banks or credit unions? Running out of business funding ideas? Alternative Business Funding As small business owners, we sometimes find ourselves in a situation where needed cash is unavailable and bank requirements and processes are just too much for our situation. Fortunately, there are other sources of funds that small businesses can tap into. Let's take a look at two alternative funding ideas and see which one works best for your business. Factoring One of the most widely used small business funding ideas is accounts receivable factoring. This is where a third party (factoring company) buys and pays for a specific number of your invoices for a stated sum of money (usually a percentage of the invoice amounts). The factoring company then collects the full invoice amounts from the corresponding customers on the invoice due date. It then pays you the remaining balance minus discount charges. In other words, you're selling your invoices for quicker cash inflow. Generally, it's simple to obtain funding through factoring. Usually, factoring companies check to see how well established your accounts receivables are as well as the creditworthiness of the customers involved. Moreover, factoring allows access to cash without your business incurring debt or selling any capital assets. Factors only disadvantage is the discount charge as well as other fees for application and documentation. Nonprofit Lending Institutions The second alternative business funding idea is called "microlending." This is usually done through non-profit micro-lending institutions which lend funds to

2. applicants such as small businesses. Microlending institutions are mushrooming in the different parts of the world, especially in Third World countries as it is the easiest way to start your own small business and it entails less hassle the would be business owners. These organizations base their loans on your business's ability to pay the amount back rather than on its credit rating. Access to funds via microlending is fairly easy. Most non-profit organizations require a guarantee that the loan will be repaid and usually does not impose any further requirements. The main disadvantage of microlending is the limited amount of cash that can be acquired. Nonetheless, it is still a good way to raise some needed funds quickly. These are just two of several alternative business funding ideas that may help your business when needed. Whatever option you choose, its success still depends largely on your abilities. After all, these are just ideas.Alternative Lending Tamar has over 23 years of experience in the events and promotions industry and her passion to help as many people as possible to find financial freedom through knowledge, education, and inspiration