Today in Australia, it’s not easy to get a business loan. The economic climate is constantly changing and banks are hesitant to give out loans without the assurance that they’ll have their money back. In most cases, you are asked to provide collateral. So, what happens when you don’t have the collateral or maybe what you own is not substantially equivalent to the loan? If this is the case, you have to look for help somewhere else. Frankly, it’s not easy to get someone who’s ready to offer your business the financial support that it may need. However, if your business idea is great and you approach the right people, you may get the financial aid. In that respect, here are the options that you should consider without going to the bank.
1. Factoring
Factoring refers to a business financing method where you are required to sell all your receivables at a markdown price. In this case, you promise to sell the earnings at discount offers to earn the cash up-front. The option is great if your business has a bad credit score or requires orders to be filled before payments are made.
2. Crowdfunding
If you have a supportive family and friends or a massive social following, you can get the funding from them. Crowdfunding allows you to create a site where your friends, family, and fans can be informed of your idea and contribute financially.
3. Angel Investor
An angel investor is someone unknown to you but is willing to give you financial aid. To get a small business support Australia, for instance, the angel investor needs to be persuaded by your pitching. You need to demonstrate your understanding of the Australian market and your expertise in your preferred entrepreneurial line.
4. Future Pledge
If you are ambitious and willing to gamble on your future income, you can bet a fraction of it in exchange for financial support. For example, if you predict your small business to earn millions in the near future, you can swap a small percentage for a specific figure. Let’s say, 10% for a $1,000,000 cash up-front.
Bottom-line
Apparently, you don’t need a bank loan to grow your small business in Australia. Despite the economic tussles, you should pick any of the four options for small business financing and take your enterprise to the next level. If you are not sure about the best direction to take, you can partner with a business support mentor to help you out. There are lots of small business support Australia mentors who are ready to uplift upcoming entrepreneurs even without charging any fees.
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