Small Business Financing 1-2-3

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Bank Alternatives:

In a struggling economy, it may not be as easy to get a loan with your local bank, especially if you have bad credit. However, if you need financing to start your business or grow it bigger, there are lenders out there willing to help you with funding.

What to Look For:

When shopping for unsecured loans, look for programs that do not have pre-payment penalties or lots of fees. The lower the interest rate, the better. Just like with traditional loans, applicants can improve the rate they receive by checking their credit reports in advance to make sure there are no weak spots are repair what is fixable.

Whether you need money to purchase equipment, pay down debt, fund new projects or something else, America One is a great resource for small and home-based business loans and financing.

American One also offers multiple financing options (business loans up to $1+ million and as low as 7.93% apr) for small businesses and entrepreneurs. They make it easier to obtain financing even in a "finance-challenged" market. You can even apply online, get a loan quickly and easily and have money in your hands before you know it.

Prosper Marketplace offers peer-to-peer loans at rates as low as 7.4% APR. No hidden fees. No pre-payment penalties. (They were also listed in the Wall Street Journal's Top 50 Venture-Funded Companies).

Small Business Credit Cards

Business credit is essential for any small business. When you start your company, you want to establish credit and build your business credit scores, no matter how small. A business credit card is an easy way to do this. Over time, you can grow your credit limit and rating. This will enable you to get financing for your business down the road when you're ready to expand your operations or even at an unexpected time of need.

Whichever credit card you decide to get, use it exclusively for business purposes. You want to keep personal and business finances separate. If you can, accountants generally advise that you put your business credit card under your business name so that you don't lower your personal credit score or complicate an audit.

Find a low interest rate credit card >> Low Rate Credit Card Finder

Small Business Grants

Do you want to get a grant for your business? Grants can be hard to come by, and there are many "government grant" scams out there. That said, there is money available.

Why Does the Government Offer Grants?

Small businesses help the economy thrive: they hire and pay workers, they pay taxes to the government and they provide products and services to the community. It's in the government's interest to help small businesses get started and be successful. However, government grant money is not widely advertised.

In addition, state and local groups offer grants, as well as non-profits and other organizations. There are grants offered in certain industries or for special purposes. Sometimes a business grant may need to be combined with other financing or funds matched. The task can become overwhelming without expert help.

The Grants for Small Business Owners has a grant proposal template sample you can use, along with links to 50 state agencies offering grants, special funding opportunities, instructions on how to fill out grant applications and more.

If you need to find a grant writer, Allied Grant Writers is a Better Business Bureau Accredited Company that offers business grant writing, non profit grant writing and federal grant writing services. They also write mini grant proposals and offer several other grant related services.

New York Times Bestselling Author Matthew Lesko runs a website dedicated to helping people find available grant money - especially entrepreneurs. He lists 10 Free Government Programs that are available to help small businesses increase their sales.

Lesko also has posted over 150 videos on his site that visitors can watch for free. Videos cover all aspects of obtaining money and grants from the government, including local business grants, help for struggling entrepreneurs, green business grants, grants for non-profits, how to secure government contracts and more. He'll help you find and apply for your own business grant through his Government Money Club.

Microfinance and Micro Loans

Another opportunity for small businesses to obtain money is through a micro loan. Micro loans can provide start-ups with needed capital, and they can also be used by existing businesses to grow operations. Micro loans can sometimes provide solutions for entrepreneurs with poor credit, those without collateral and people who don't have a stable income or are unemployed.

Microfinancing can be easier to obtain than the traditional bank loan and can be used for a variety of purposes. However, borrowers may be required to go through business management training in order to qualify. If your business provides employment for others and/or improves the quality of life for those in low-income areas, you may also have a better chance of getting a micro loan.

The Small Business Administration (SBA) is a government organization that helps small businesses unable to get loans through normal lending channels (including special interest loans, micro-loans and secondary market programs). To find a non-profit lender in your area, go to www.microenterpriseworks.org.

If you are a start-up business, you can apply for unsecured start-up loans to $150K online with America One Unsecured. Accion specializes in microfinance within the USA. A limited number of credit unions offer small business loans. As long as you are a member, you can apply, but be well-prepared. Since credit unions are owned by their members, they obviously want to minimize risk and carefully review loan applicants.

Crowdsourced Funding

Crowdsourced funding is also a means of getting the money you need to start your business. Several websites like PeerBackers and 33 Needs have platforms that connect entrepreneurs with investors so they can obtain the financing that they might otherwise not be able to get.

Crowdsourced funding sites often provide fundraising assistance, including creating a pitch, terms of the offer, managing fund collections, obtaining signatures and more.

More Tools to Obtain Financing:

Tip: Put together a business plan to make it easier to get financing. Microsoft also has a free letter you can download from their website called "Bank Loan Request for Small Business".

Small businesses that have been operating for at least two years can find capital through the Receivables Exchange, a global institute of international investors to whom small business owners can sell their receivables in exchange for working capital to grow their companies.