Why 2017 Is A Great Year To Get Business Funding
The financial crisis back in 2007 may have highlighted the financial woes of some of the biggest US companies, but it also quietly affected small companies, too. While it has always been difficult for a new business to get a traditional bank loan, it became almost impossible after the financial crisis for a small business to get a traditional bank loan.
Fortunately, alternative lending sources like ARF Financial sprung up to champion the small business owner. These types of lenders helped promising businesses get the capital they needed to either start a business or stay in business.
However, alternative lenders did more than champion businesses with potential; they also expedited the loan approval process, making it easier for a business to get a capital loan, a bridge loan, or a line of credit in days, rather than weeks or months. What’s more, many promising businesses didn’t even need collateral to get the financing they needed to start, maintain, or grow their business.
Still Better News
However, weathering the storm of the financial crisis is only one part of the story of small business renewal. Now, in 2017, there is even more hope for business funding.
What has kicked off this renewed faith in the feasibility of raising enough money to grow a business comes from an unlikely source: Snapchat.
Snapchat, incidentally now renamed as Snap Inc., has caught the attention of businesses interested in raising money because of their impressive projected IPO valuation.
The Snapchat IPO, which may occur as early as next month, could seek a $25 billion valuation. This will make it the largest US tech IPO since 2012, when Facebook got an $81 billion valuation when it went public.
However, this news doesn’t just affect cutting-edge technology businesses and IPOs. It’s a rising tide that lifts all boats, raising hope for businesses of all sizes in all industries to be able to get the funding they need to grow their business. This news inspires even small to medium businesses to begin to look for novel ways to raise money and finance.
Sources of Business Funding Today
Even if your small to medium business is not technologically disruptive enough to grab headlines and get a billion dollar valuation when it goes public, there are still many ways to get the funding you need to grow your business.
You don’t need a big bank to approve a loan. Online lenders have made the entire loan application process fairly simple and straightforward. What’s more, not only can you get the money you need faster, you can even get it at more competitive interest rates than banks and other large financial institutions are even willing to consider.
Here are 3 examples of ways to get funded:
1. Apply for a business term loan. An online lender can offer you a loan up to half-a-million dollars. If you apply for a short-term loan, you will repay it from 6 to 12 months. If you apply for a long term loan, you will repay it over a period of 10 years. In some case, you can extend it for even longer.
2. Apply for a business line of credit. You can get credit from $2,000 to $100,000. In some cases, you can even get credit up to $500,000. Access to flexible cash can help you overcome a negative cash flow situation caused by an unexpected turn of events or to grow a business idea when new market opportunities appear like China opening up for foreign investments. The good news is that you are not charged any interest until you actually use the credit.
3. Apply for invoice factoring. Some businesses, like freight carriers, often don’t get paid by their customers immediately after delivering a service. Instead, it can be customary for the industry to give customers a 30 or 60-day credit. While a large business often has enough funds to manage the time lag, it can be difficult for a small to medium business to keep the lights on if they have to wait a month or two before they receive payment. Invoice factoring allows a small business to sell its invoices for immediate cash. The factoring company then collects their money from the customer on the invoice due date. Financing can range from $500 all the way up to $500,000.
The terms and conditions and the APR range for these types of funding depend on the weight of numerous risk factors but it is almost always ethical and fair.