Module 6: Financing Options
- Types of financing available for your business include self-financing, angel investors or venture capitalists, crowdfunding and peer-to-peer lenders, lines of credit and installment loans.
- Understanding the features of traditional lines of credit and installment loans can help you evaluate other financing options that you are considering.
- Your business may qualify for government programs such as loan guarantees from the SBA, USDA and various state and local governments, depending on the purpose of the loan, revenues and other characteristics such as business location and ownership.
- Financing accounts receivable, leasing, inventory, factoring, and merchant cash advances are alternatives that should be carefully evaluated and may not be available at banks.
- Your chances of getting a loan may improve by:
(a) understanding how lenders use your personal and business credit histories
(b) understanding the Five C’s of Credit
(c) maintaining separate personal and business records
(d) preparing to apply for a loan before contacting the lender