As a small business owner there are times when the cash flow starts drying up or you might need some cash infusion for a new product launch or buy more inventory and you wonder how to get a small business loan. All 3 types of business credit methods discussed here do not require you to have a great credit score (720+) but having a great credit score does help you get good interest rates on these loans.
Here are three unconventional ways you can get a business loan,
Getting a business loan from from a Credit Union
Ditch your accounts at the Big Banks and open a business account at one of your local Credit Union. Credit Unions are not-for-profit organizations offering a wide array of financial services just like your Big Bank but they are owned by their members (you). If you have an account with a credit union, you are a member and an owner. They do not have to charge you exorbitant fees to make a profit. Being a member/owner guarantees that your credit union is looking out for your financial interests and not that of a small group of stockholders. Memberships are limited. Credit Unions have different eligibility criteria and you might have to find one where you will be eligible. The only disadvantage Credit Unions had was lack of ATMs and branches but many of them have tie ups and have launched some great mobile apps that allow you to deposit checks using your smart phone.
Some great Credit Unions in Georgia,
- Georgia’s Own Credit Union
Image: Georgia’s Own Credit Union
- Associated Credit Union
Image: Associated Credit Union
My personal favorite is Digital Federal Credit Union – DCU.
I Love my Credit Union (TRUE STORY)
They are a California based Credit Union. I have an account with them and would like to share a personal story. I own a car, pledge my car title and got a car loan for 1.99 % (in June 2013) from DCU. If you have an account with them, a good credit score and direct deposit into one of their accounts you can get a loan in less than 24 hours! No kidding, I did. Their customer service was amazing. I asked them for a personal loan at 10% but the loan representative suggested a reverse car loan at 1.99%. Now you know why I love my Credit Union.
Image: I love Digital Federal Credit Union
Getting a business loan from Peer To Peer lending
Peer to Peer/Social lending is strangers coming together to fund/loan some money to you for personal or business reasons. The loan is made to you as an individual rather than your company. The loan rates depend on your credit score, credit history, current annual income and debt/income ratio.
The loans rates can be higher and will take at least 2 weeks receive the loan in your bank account.
Some of the well known Peer To Peer lending websites are:
Getting a business loan from Crowd Funding website
Crowd Funding – If you have a great idea – product, book, art, film or any other creation you can go on these website and pitch your idea. If impressed individuals will contribute and fund your project. The Crowd Funding is applicable mostly to new ideas and can take weeks to several months to completely fund.
Some of the well known Crowd Funding websites are:
Do you know any other unconventional method that has helped you secure a business loan? Let us know in the comments below.