Funding your small business? Bank loans are good but consider these options.
Given how frequently we are contacted to write business plans and develop business strategy, it’s amazing how often a small business owner wants the business plan solely so their business can get a loan. And as much as loans are a great way to finance your business, there are two problems with this approach:
First, the reason for developing a business plan shouldn’t be merely to qualify for a loan. Banks and guarantors want you to have a business plan to demonstrate that you are thinking strategically and can map out a successful future for your business, not to create an artificial hurdle to obtaining a loan (more on this in a future article). Second, there are many other ways to finance a business beyond a simple long term bank loan, and though only a few are appropriate options in any given situation, all should be considered by small business owners and budding entrepreneurs before they put in the effort to seek a bank loan.