Bruce Freeman writes a column called the small business professor for Scripps Howard News Service. This week, he answers a question about financial resources from someone tired of running up his credit card for business expenses.
Banks have always been a main source of lending for small business owners, whether to start a business or getting a line of credit to keep the monthly bills in check.
After the recent economic downturn, lending has become increasingly more difficult.
Alexander Aiello, Advisor at Morgan Stanley Smith Barney, suggests other financing methods for small businesses to consider.
Investment firms have programs that allow small businesses to access money when they need it.
Lines of credit. Convenient form of financing that allow businesses to take advantage of immediate opportunities, and most of all unexpected expenses.
Term loans. Offers small businesses the cash they need to operate on a monthly basis.
Standby letters of credit. Used in international trade transactions to purchase goods from other countries. This is also known as a non-performing letter of credit.
Commercial mortgages. A mortgage loan using commercial real estate as collateral to secure repayment.
Security based loans. A loan against eligible security based collateral. This allows you to utilize what’s available. This avenue for loans has helped small businesses get the funding they need when they need it at very competitive rates.
Running a business and taking care of the required finances requires a great deal of work.
Sitting down and analyzing what your cash flow is month-to-month and planning ahead will allow you to have a smoother running business.
Don’t wait until the last minute to come up with enough cash to pay your monthly payments.
It takes discipline to plan ahead.
If you can’t do it alone, you may want to consult with an advisor.
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