For all of the axioms of business, fewer are truer than the statement, “it takes money to make money.”
As a business owner, you already know this. You’ve been working day and night going over the loan application to get your niche business off the ground.
But unfortunately, they aren’t biting. The lending officer doesn’t understand the niche at all and doesn’t see it as a worthwhile use of the bank’s money.
You might feel like your dreams are dead in the water, but don’t worry! There are several lending solutions available to you even when the bank says no.
Read on to see how you can find the funding to get your dreams out of your notebook and into the real world!
When you apply for a loan at a bank, the bank has one concern…
Getting their money back.
They look at your credit history, your financial situation, and business plan to determine how likely it is that they will receive their money back.
Usually, the bank will ask an underwriter to secure your loan. If they can’t find an underwriter to take on that risk, then your hopes of getting a loan are on the rocks.
P2P or peer to peer lending bypasses all of this bureaucracy and puts you in direct contact with another individual.
In a P2P loan, you ask a wealthy individual for a loan. Some of them may require collateral, but many will offer an unsecured loan at a slightly higher interest rate.
If you’ve ever seen Shark Tank, you’re already familiar with the idea of an angel investor.
An angel investor is a wealthy individual who gives a sizable amount of capital to a startup. Often, this is a friend or family member, but it may be a benevolent member of the community.
Many niche businesses have gotten their start with the help of an angel investor.
However, these investors typically fund your business in return for a portion of the company. If you want to remain the sole owner, this won’t be a good option for you.
Line of Credit
If you can’t get approved for a conventional loan, you may still be able to open a business line of credit.
When you get a term loan, all of the money is deposited in your account at once and you pay the loan back in monthly installments.
However, a line of credit works much like a credit card. You are approved for a certain amount of money that you can borrow as you use it. You only make payments when you use that credit.
Lines of credit are often unsecured, so you don’t need to offer collateral or find a cosigner.
Even if you can’t find a physical bank in your area to give you a loan, you might be able to find an online lending institution that would be interested in funding your niche business.
You can apply online and get approval in minutes. Money is often deposited in your account within a week.
While these institutions may operate much like a traditional bank, they are often more flexible with who they lend to.
Get Your Niche Business Off the Ground!
If you’ve had a hard time getting banks to show an interest in your niche business, you might have felt like you should just give up.
But don’t worry! There’s still hope to fund your business and give your dreams the kick start they need.
Apply now and get your business off the ground!