Alternative financing solutions business ideas
When your small business takes off, it can really take off. And spending time with bankers and credit union executives isn’t typically the fastest way to secure those much-needed funds to continue pumping out product and services.
Luckily, there are a few different sources out there that let you secure cash quickly.
Here’s a breakdown of a few of those solutions.
Kabbage is an interesting service that markets having the ability to secure funding for your business in as few as seven minutes. There are no application fees, no obligation to even take the loan and once approved, you have ongoing access to cash at anytime.
So, how does it work? Unlike going to a bank where you would need to present your business plan again to some executives, Kabbage takes your actual business data and determines how much it could afford to give you to keep on growing.
So, if you run an eBay or Etsy business, simply connect your accounts and the Kabbage technology analyzes the data to determine how much money you’re eligible to receive. Credit lines can range from $500 to $100,000.
Even if you don’t run a specialty business like eBay or Etsy, you can hook other accounts up to it, such as Xero accounting software, which can analyze your data from any type of business.
Depending on your credit score and Kabbage score (their version of a credit score), fees range from 1 percent interest to 13.5 percent interest. There are no early payment fees.
On Deck Capital
On Deck Capital is a good solution, as long as your business has at least a year’s worth of revenue data to show. The company analyzes your business’ cash flow and positive payment history instead of a credit score and then determines if you are eligible for a loan.
The process takes about 15 minutes and can even issue repayments ranging from three to 18 months. It can typically fund a loan that’s $25,000 or less in about an hour.
For people who run businesses that run nonstop — think restaurants, 24-hour convenience stores, etc. — On Deck is a good solution for securing funds quickly.
Upstart is different from the other two solutions mentioned above because it uses a crowdfunding platform.
Here are the logistics: After answering a few quick questions (you must have a college degree and have a full-time job), a team then analyzes your potential and determines how much money you’d be eligible for. So, instead of just looking at your FICO score and years of credit, Upstart also looks at your education, area of study and your job history.
If approved for somewhere between $3,000 and $25,000, APR starts at 5.7 percent, with no prepayment penalties.
So whether you’re looking to pay off credit card debt or do some traveling for your job, Upstart is a solid solution that have helped many small business owners.