Tips to help finance a small business

Obtaining financing for a small business can prove challenging regardless of the prevailing economic climate. Whether looking for money to help you survive during the hard times, capital to grow the business, or are in need of startup funds, it’s now proving to be tougher than ever before to secure the funds you may need.
But this is not to mean that all is lost. With the right small business accounting tips, you should manage to get the money that you require. The following tips should help you get started:

Consider Factoring

This is a business financing method where the firm opts to offload some of its receivable to assist it to get some upfront cash. Factoring is a financing method that is often applied by companies and organizations with a bad credit score. Firms in the apparel industry may also resort to it especially considering that they’re required to start filling in their orders long before they have received any form of payment.
However, as efficient as it is, it also happens to be quite expensive for the seller. The firm that is to receive the receivables is often expected to part with a small fraction/percentage of what the receivables are worth. This means that, if you do choose to part with a 2% fee so as to get a thirty-day advance, you will have paid an equivalent of twenty-four percent per year.

Look for a Bank Loan

Even though the lending standards continue to become stricter each year, there are banks such as Bank of America and J.P Morgan Chase that normally earmark annual funds to be lent to small business owners.
So, why not consider applying for a loan from your nearest lender? Your loan application just might go through enabling you to obtain the money you need to start or expand the business.

Use a Credit Card

Granted, using a credit card to fund the company is considered risky by many financial experts. In the event that you end up falling behind on your payment, the chances of your credit score getting whacked are quite high.
Additionally, opting to pay the minimum amount per month also means that you will likely end up creating a hole for yourself that you will probably never manage to get out of. But when you use the credit card in a responsible manner, you can manage to free your business finances from the occasional jam.
It can also help you extend the business accounts payable to a period where your cash flow will start to improve.

Try Pledging a Portion of Your Future Earnings

If you are a young and ambitious business owner who is not afraid of taking risks, you can always make a bet on your future earnings. There exist numerous online marketplaces, e.g., the Thrust Fund where you can pledge a certain portion/percentage of what you will earn in a certain period.
What you get in return is upfront cash offered to you in the form of venture funding. But you need to note that enforceability and legality of some of these contracts are yet to get established.