If your small or medium-sized business has been denied funding in a traditional form such as a small-business loan from a bank, you are not alone. The majority of small businesses tend to have less-than-perfect credit–and, moreover, large banking institutions tend to be reluctant to finance even the most stable of small businesses. This has led to an unfortunate number of companies that now find themselves in the exact position your company may be in if you are reading this article. Fortunately, there are a few alternative sources of funding out there–some of which may work better for small businesses in the first place. Moreover, in some cases it is even possible to solve such problems internally, without seeking outside funding at all. Here are a few possible solutions:
Self-financing projects. We will begin with a solution that, though not universally applicable, is worth considering. If you can manage to finance your project yourself(either by using your company’s capital reserves or by investing some of your own personal money into the company at this time) then this may be the best route. After all, this eliminates the need to seek funding–as well as the need to worry about interest and repayment. Of course, it is important to be very sure that this method is feasible not only in the short term, but in the bigger picture as well: if you suspect that you may experience cash flow problems at some point down the road, than making such a huge investment with your own funds can be risky, as it can limit your ability to respond to such issues in the future. This is why you may wish to consider a few more of the options listed below.
Reevaluating project’s budget. If, through some changes, it is possible to complete the same project that inspired you to seek funding for less, than it is worth considering. Don’t fall victim to overly-optimistic thinking here, though: it may be feasible, for example, to purchase a cheap used vehicle when you had planned on buying a new one–but it probably isn’t likely that you are going to find cheap real estate in your favorite part of Manhattan.
Delaying project. This option may not be fun, but it is sometimes the smartest. If you are unable to finance a new purchase, project, or investment, it may be best to simply wait until the time is right. It is better to delay a project than to start it only to fall short of the funds necessary for completion, while also endangering your other operations by creating a potential budget shortfall. However, sometimes, delaying just isn’t an option (or isn’t the best option) which is why considering forms of alternative funding may be the best course of action for your business.
Alternative funding. Because small businesses have so much trouble obtaining funding from traditional sources such as bank loans, a wealth of new alternative funding options has emerged. Many investors and financial institutions are still eager to finance the small businesses that keep our economy running–and the plans they offer are often tailored to the unique needs of small businesses. At Fund Kite, we can help you find exactly the right kind of funding for your company–and we typically get you approved within just a few short hours. Moreover, because alternative funding is not beholden to the conventional loan process, funding obtained through companies such as Fund Kite is typically made available within days–not within weeks or even months like with most bank loans.
Building for the future. One last factor to consider: if you have been denied funding, it is likely because your business does not have the credit history to justify such an investment in the bank’s eyes. With smart management, it is often possible to get funded in a different way or to temporarily evade the need for outside funding. However, it is important to understand that, sooner or later, there probably will come a day when your business needs traditional funding–which is why building up a solid company credit history now is a good investment for you as a business owner.
Learn more about alternative funding. Visit Fund Kite online today!