Hopefully you are beginning to see positive changes in your business efforts as the economy slowly begins to improve. Even with some signs of economic improvement though, the availability of credit continues to be an area that frustrates many small business owners and entrepreneurs. Although the reasons for this are varied and the solutions complicated, I’ve decided to present some information in this blog to give alternatives to those who are in that “frustrated” camp.
- Traditional financing is available but without excellent credit it is difficult and maybe more expensive to obtain. Go to your current bank first and find out who the commercial loan person is. Explain your needs and work together to find the best amount and lending product to meet those needs. If they can’t help don’t get discouraged as your business future may depend on securing adequate working or expansion capital.
- Visit with one of our SBDC financing experts. Although the SBDC does not make loans we may be able to help you locate a source for funding. At the very least we can help you understand your “fundability” and explain the myriad of different loan programs out there.
- Look into non-profit financing organizations such as Community Development Financing Institutions (CDFI’s) or Intermediary Re-lenders. Most areas are served by one or both types. In the San Joaquin Valley there is the Fresno CDFI www.fresnocdfi.com or Valley Small Business Development Corporation www.vsbdc.com Both provide “mirco” and mid level funding for qualified business borrowers.
Consider Social Lending or Peer-to-Peer lending websites. The two largest and most reputable are Lending Club and Prosper.com. The concept is simple. These sites match everyday people with money with regular folks like you who need money and charge a small fee to broker the lender/borrower relationship. These tend to be sources for small amounts of funding so if you need more than $25-$30K they probably are not going to work for you. Also keep in mind that the lower your personal credit the higher the interest rates are through these sites. But they can be a good source if not the only source for some business owners.