If you are a business owner or a business manager and your business is in dire need of short term funding, finding a lender can be quite difficult especially in the current business climate. Although there are so many lenders in the money and capital markets, many of the ones you may come across may be unwilling to give you loans for professional reasons even if you are qualified for it. Beyond that, there is the issue of exorbitant interest rates to deal with. Loans that attract a high interest rate in double digits most times may be bad for the short or long term interest of your business.
If you are looking for a lender, the best place to go is a professional outfit that understands what your needs are and the best way to meet that need without jeopardizing your business’s corporate existence.
Venture Capital
A venture capitalist is a private investor or an investment firm that invests in firms and ideas using private equity. These types of investors study the current and future growth potential of the business before deciding on whether to invest in it or refrain from investing. Venture capital has been around for quite a log term and the stringent procedures found in banks and other financial lending institutions are absent in venture investment. So if you have approached multiple banks and lenders with little or no success, you may try approaching a venture capitalist for funds.
Private Lenders
Besides venture capitalists, there are also some private lending firms that offer short and long term loans to business enterprises. The idea is to secure the best possible loans at the lowest rate of interest from a lender who is willing to offer it to you. A private lender may or may not be a venture capitalist but what both have in common is that they seek out business enterprises in need of funds and offer them what they need in exchange for either a percentage of the firm’s shares or a percentage of interest.
Financial Institutions
Banks and mortgage lenders are also options open to business enterprises. Should you need a property for business purposes, a mortgage company can raise the funds to help you secure one. Banks also offer loans to company’s facing cash crunches or those looking to expand business operations.
The nature of loans required depends on what it is needed for and how much of an impact it will have on the business. Taking up a short-term loan for a long-term project and vice versa will not help your business in any way. Rather it may increase your level of indebtedness without improving your business fortunes as much as you would have hoped. Before taking a loan, have a clear agenda in mind regarding why you need it and in what way it will help your business.