3 Ways to Get Financing for Your Business

Saturday, April 4, 2020, 6:00 AM | Leave Comment

Whether you need to make a purchase or acquire property, or you urgently need money to buy or replace equipment, you might be looking for financing options right now.

The good news is that there are tons of choices available to businesses, all with their own pros and cons.

However, you have to make sure that you understand which of these would be better for you based on how much you need, the best amortization period for you, and the requirements.

Here are some ways that you can get financing for your business.

  1. Mortgage Finance

    If you own a commercial property and have some equity in it, you can borrow against it. This is usually a great option if you want to extend your property portfolio. It is not always the best choice for short term needs or cash flow issues, however.

    The best part about these types of loans is how fast and simple it is to qualify. If you own equity, a service like ONYX Finance in Melbourne Australia will be able to lend you some money with your property as collateral. ONYX Finance specialises in first mortgage commercial property finance and will be able to finance you up to 5 million dollars.

    The downside of these loans is that your property will be on the line. You may also have issues if you want to sell the home later and there’s still a loan against it. However, you always have the option of selling the property at a high enough price to cover for the principal.

  2. Invoice Financing

    Invoice financing is another option you could consider. Invoice financing is when you borrow against invoices due and get a portion of the money lent to you. This is usually a good option for companies with cash flow problems or immediate needs, such as restocking or covering payroll.

    It’s also a good option if your business hasn’t had the time to establish credit yet. This is because the credit of your debtors will be used to determine eligibility, not yours. On the flip side, it also means that you might not be able to get it if they have less than stellar credit.

  3. Crowdfunding

    Crowdfunding is still a very new concept, but one that a larger number of businesses are considering and using these days. This is especially common among new start-ups.

    Crowdfunding allows you to present your idea to the public, and get finance through their donations. This is done through specific sites; each site has its own rules as to who’s eligible, and you should know that your credit score will be taken into consideration.

    While crowdfunding might be a good option for some, you should also know that it demands a lot of work and you’ll have to build a campaign. Don’t expect investors to come flocking either. Most successful crowdfunding efforts are the result of owners tapping into their own network, not the crowdfunding site magically generating interest in their idea.

These are only a few of the options open for business owners looking for financing. Make sure that you look at all the choices available on the market, and pick one that is in line with your needs and objectives.

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