Funding Small Businesses

Do you need small business funding to expand your business or to buy equipment to make it more efficient?

Funding for small businesses needs to get creative in a tough market. You already know funds for your small business won’t come from banks for the near term, so what are your options?

Small business funding can take the form of a large lump sum loan or it can simply mean access to lines of credit. In a tight market, even lines of credit can mean survival.

There’s a great article in the Wall Street Journal, Wednesday March 12, 2008, in the “Personal Journal” section that talks about alternative sources of credit for small businesses other than banks. The article might be dated, but the sources are not.

Banks, as you may recall, are busy nursing their balance sheet migraines over bad loan write offs. This means credit is drying up even for very credit worthy small businesses. Unfortunately, small businesses are usually low on the lending totem pole. After credit markets choked, many of the large banks simply stopped doing business with small business owners.

Wall Street Journal article highlights a coin laundry business owner in the Midwest. He received $25K in small business funding as a loan from He claimed his rates were lower, paperwork was less, and it took far less time than if he had gone to a traditional banking institution.

The article mentions several other online lending networks you should check out for funding small businesses; (the very same Sir Richard Branson)

It’s all part of the “person to person” lending segment of the web. We haven’t had the chance to vet these small business funding sources listed above, so tread carefully.

If you do decide to contact them, please tell us what you find out. These seem like decent options for unsecured micro loans (up to $25000) for going concerns, not start ups. But if you get in a cash crunch, it’s a FAR better alternative than maxing out on credit card debt. Remember, every business goes through a cash crunch at one time or another.

The time to apply for a credit line is when you don’t need it.

Don’t wait until your suppliers are knocking down your door for payment; or worse, the IRS is chasing you. Like insurance, just because you have it doesn’t mean you use it everyday. You use insurance when you need it. Think of a credit line the same way.

In Your Corner

Dawn Fotopulos

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