How to get the best out of your short term financing goals
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Having worked the rat race of the corporate culture has left you depleted and you’d rather do your own thing. You have decided it’s time now that you devise up that business plan and get to it. Naturally so, the first hurdle here would be getting yourself funded or getting some short term financing.
Regardless, the best of plans by entrepreneurs never see the light of day as progress is thwarted by a lack of venture capital. So, it’s integral to go about it in a rational way and firstly determine how much working capital do you exactly need.
Now start with making an estimate of your costs, which includes all things like the various departments in the company’s structure, physical office cost, business licenses, insurance policies, equipment, supplies, and a whole myriad of things. Only once that you are done with these things and have a rough estimate can you get down to cost-cutting? Make sure you have put pen to paper and jotted down all the necessities and routine supplies needed to streamline your business. You need to be able to justify all this expenditure when going for business capital loans.
Short Term Financing
Working Capital Loans have long been considered a great option for short term funding solutions. They help you cater to your immediate needs. However, with the emergence, of online business loans there is no need for collateral and there is minimum paperwork. Nearly every industry is accepting of these, and you can easily request amounts between $5,000 to $500,000 depending on your monthly sales volume.
Short Term Financing Alternatives
Now next to Working Capital Loans, other alternatives include getting what’s called an angel investor, however, they are hard to come by and end up owning a considerable portion of your company.
What is an Angel Investor?
An angel investor is an individual who provides capital for a business or businesses start-up, usually in exchange for convertible debt or ownership equity. Angel investors usually give support to start-ups at the initial moments (where risks of the start-ups failing are relatively high) and when most investors are not prepared to back them.
Crowdfunding too is a great idea and you can check out the many platforms online, where you just upload your proposal and business plan, and interested parties fund you for it. Talk about fast business loans.
What is crowdfunding?
Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture. Crowdfunding makes use of the easy accessibility of vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together, with the potential to increase entrepreneurship by expanding the pool of investors beyond the traditional circle of owners, relatives, and venture capitalists.
Factoring is a quick and flexible source of funds for businesses that are waiting for outstanding receivables to pay. Factoring simply utilizes your accounts receivable as the collateral and advance funds against the face value of your invoices.
What is Factoring?
Factoring has many identities and is commonly referred to as accounts receivable factoring, invoice factoring, and sometimes accounts receivable financing. In a nutshell, invoice factoring is a way for businesses to fund cash flow by selling their invoices to a third party (a factor, or factoring company) at a discount. Going for factoring is a great option, but if you are considering short-term financing solutions, a working capital loan could be it for you.