Finding Money For Small Business

Finding money for small business can be challenging, especially in these tough times. More and more, business owners are turning to non-traditional means of funding their enterprises. The good news is there are plenty of alternatives when looking for money for small business.

First of all, there are always the traditional methods of finding money for small business. These would include banks, credit unions, and the SBA. Now the SBA does not actually loan money for small business, but they do guarantee the loan and it makes it much more attractive to the banks. Of course you have to have great credit and plenty of assets to cover the loan. In today’s business climate these traditional methods of getting money for small business are getting increasingly hard.

This brings us to some not so often thought about methods of getting money for your small business. There are quite a few and with this article I would like to throw a few out there, and maybe get you to think of a few on your own that you may have not considered.

First, one of my favorite ways to get money for small business is one you have been warned about time and time again. It is using friends and relatives to get money for your small business. I know, you should never think about it right? I disagree. As long as you treat the money for your small business as a real loan and have a binding loan document you should be fine. Just realize that your friends and relatives expect to get there money back and you should expect to pay it back. It has to be treated as a business arrangement. Also, you have to be willing to pay the money for your small business back, even if the business goes under. Using friends and relatives can work out great because they are usually willing to give you great rates and terms that you may not get anywhere else.

Another method of getting money for business is using government grants. You will see lots of ads on television and the internet for programs that show you were to find grant money for small business, but most of these programs are scams or you can find the information yourself. You will have to do some searching but everything you need can be found for free.

Also, a really good method of getting money for small business is using peer-to-peer lending. Programs such as Prosper.com are great for getting that money you need for your business; however, unfortunately at the time of this writing Prosper has been halted by the government because they have accused Prosper of acting like a bank. The way these programs work is after you sign up, you can request a loan and people bid on you and the rate they are willing to lend at by your credit rating and the story you tell about why you need the money for your small business. People hedge their risk by lending small amounts to several people. Hopefully Prosper.com will be allowed to continue.

Hopefully these methods have given you some ideas for your business. More importantly I hope they have made you think about other ways you can find money for small business.