Raising financing for your business

Many people think that the only way that you can obtain financing for your business is to use a bank. Banks are a great way of obtaining financing for your business, but the task can be nearly impossible if you do not have perfect credit.

Here are some tips that you can follow to obtain financing for your business.

Tip one:
If your business accepts credit cards for payments, you can give yourself an option for non-traditional financing just by accepting credit cards. You might be able to qualify for a business cash advance with your credit card receivables. Banks are a traditional way of financing so they can be a poor choice to use when needing a cash advance, so you should look at non-traditional lenders, such as credit card receivables. One thing to keep in mind is that getting cash advances is similar to getting a loan, but it is still not the same, you might have higher interest rates on cash advances so do not use it to borrow huge amounts of money.

Tip two:
You can choose to sell personal or business assets to continue financing your business or to start up your business. If you do decide to sell some of your business or personal assets to obtain some financing you need to be careful in what you are selling, do not go overboard. Before you sell an item make sure, it is not something that is important to the basic operation. For example, if you are an independent freelancer you will not want to sell your computer, unless you have two or three extras sitting around. Before you sell, your personal items make sure that the amount you are getting out of the sale is going to be enough to get you by. You wouldn't want to sell your boat only to find out you cannot keep the company going any longer after two weeks.

Tip three:
When trying to purchase property for your business you can run into problems with banks wanting to lend you money, for certain types of properties, which are known as special purpose properties. These kinds of properties can include funeral homes, churches, sheet metal shops, etc. Banks try to avoid giving loans to these types of purchases because they are not as safe as other loans. Another thing that banks might try to do is to attach a balloon and/or recall provision to commercial loans. This means that the bank can require you to pay back the loan early under certain conditions. These can both be avoided if you look for non-traditional lenders, who tend to be a bit, more understanding when giving commercial loans.

Tip four:
If you have a whole life insurance policy, you can borrow against the policy to obtain financing for your business, with term life it is not a feasible option. You should only borrow against the insurance policy if you have had it for several years because the policy will then have cash value. Insurers have been known to all policyholders to borrow up to ninety percent of the policy's value. If you borrow against your policy, keep up on your payment obligations so the policy stays intact. If it is no longer intact, you will be required to pay everything back at once.

Tip five:
You can also take out a second mortgage on your house to obtain financing. This is a last choice option because if your business goes under you can end up losing your home. If you have a successful business and just need, some money to help expand your business this would be a good option because the interest you pay on the loan is tax deductible and is usually lower than a credit card or unsecured loan.