There are 25 million entrepreneurs in the US, and around 60% seek financing each year to support growth initiatives, cover working capital levels and handle emergencies. Equity financing is difficult-to-almost impossible for most small businesses to obtain due to the level of competition for those funds. As a result of this circumstance, the majority of small businesses will seek Debt financing for working capital and business investments. The most popular form of debt financing comes from financial institutions such as banks and credit unions that also manage the banking processes of small businesses.
These institutions are usually the first choice that small business loan applicants seek for financing through the form of business term loans, SBA™ loans, business credit cards and home equity lines of credit. In the late 90's through mid-2000's, banks and credit unions provided lending to small businesses and entrepreneurs like never before, right up until the financial crisis of 2008. Today, viable businesses with stable profits and excellent balance sheets are beginning to obtain financing again from these institutions, but the red tape and lengthy closing process usually kills investment opportunities due to the large amount of time before funding.
Today small business owners are faced with a tough task of starting an enterprise, growing an enterprise and tackling the various challenges without the traditional sources of working capital assistance. This growing demand has created new alternative financing options and has created popularity over other options that were historically considered "too costly," including the following:
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Please review the three links above to obtain more information on the three most popular forms of alternative financing vehicles for your small business right now. From there you can decide which one might be the best option to fund your growth initiatives, cover working capital levels, or handle your operational emergency.