Running your own business is no small feat. As hard as you try, there may be times when your business runs into trouble and you need fast money to help you bail it out. There are many who will not have adequate credit to qualify for a traditional bank loan. With this in mind, here are clever ways to find funds when you need them the most.
Vendor Financing
This option applies most to those companies that manufacture goods. If your ability to pay the bills issued by your vendor rests solely on your company’s ability to manufacture certain items, you may want to approach your vendors and ask about extending the payment terms they request on their bills. Most vendors expect payment within 30 days before issuing financial penalties or cutting off your access to more orders until full payment is made. This problem can persist especially if the sales cycle is typically longer than 30 days. If the vendors can extend their billing cycle, this can give you access to more cash than you are typically used to.
Crowdfunding
If you are not familiar with this option, you basically tell your story on one of the many crowdfunding sites and hope the general public has enough sympathy to donate money and help get you out of the financial predicament you are in. Some sites offer the ability to receive donations with no strings attached while others give you the chance to offer incentives in return for donations. This latter option is especially popular with businesses that sell such items as collectibles or more tangible consumer-oriented goods.
Life Settlements
This is a great option if you want to keep your financial problems a bit more hidden from the public eye. The only catch with this is that it requires you to already have a life insurance in place. How it works is as easy two step process. You essentially sell the remaining balance of your life insurance policy to a third-party investor. All responsibilities and benefits of the policy transfer to the investor. This means that you are no longer on the hook for paying premiums, but the original beneficiaries also no longer receive any money when you die. You will typically receive more than the traditional cash out amount but less than the total value of the policy. This is a quick and easy way to receive money from your policy at a time when you may need it most.
Angel Investors
If your business is more on the cutting-edge side of things, you may want to look out for what are known as angel investors. These are investors who are more of the silent partner type that will invest money in your company in exchange for a share of the company. While you may be hesitant to give up a piece of your company, keep in mind that such large companies as Google and Yahoo were initially started with the help of angel investors and look where they are at.
