Creative Financing Tips for Small Businesses

Finding financing for your small business can often seem to be quite difficult. Unless your personal credit is absolutely spotless, you may find yourself having trouble getting traditional bank financing or a corporate credit card. Without the cash-in-hand for capital, you may need to seek other forms of financing. Here are a few non-traditional and creative ways that you can help to get the financing that you need for your small business:

Cash Float

Cash floats are similar to “robbing Peter to pay John”. If you do not have the cash upfront for what you need, you can try to convince your suppliers to float your payment until your customers pay you. This will work only if you know that you will have the cash in hand to pay your suppliers when you promise to pay them.


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Hard Money Lenders

Hard money lenders are those that are going to charge higher interest but are often easier to convince when it comes to securing a loan. Payday lending companies for instance, are hard money lenders. If you are planning to use such a lender it is important that you understand what this loan will cost. The best time to use hard money lending is when you know that you will be able to make money quickly. You have to be able to make the return payment but you want to also be sure that you are making enough so that this higher interest rate is going to be worth it.

Silent Partners

Many small businesses began with a silent partner. If you cannot obtain traditional financing and you do not have savings that you can revert to, a silent partner may be a good choice. Silent partners simply put up funds for your business in exchange for a share of future profits. They have no decision making authority and are not present in your day to day operations. It is important that you make your choice of a silent partner carefully. The ideal situation is to take a small amount of funding from someone who has a lot to give. You certainly do not want to take someone’s life savings and cause them to be concerned about their return.


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Jack is Tech blogger. He contributes to the Finance, Insurance, Money Investment and Saving Tips section on InsuranceMost.