Small Business Financing For Company Growth–Companies Turn To Small Business Loan Alternatives For Capital

Small businesses have been seeking financing opportunities in the hope of growing their company and expanding their operations, and this has typically resulted in these companies seeking out small business loan opportunities. Throughout 2010, there were ups and downs reported for small businesses as some companies reported that banks were tight with their lending practices while others were able, at times, to acquire either traditional business loans or an SBA loan, thanks to funding which was given to the Small Business Administration which allowed them to guarantee a higher percentage of loans for a set period of time.

However, there are some companies who are seeking out financial assistance through investors rather than small business loans. Obviously, small business investors are nothing new, but for many companies, when it comes to a need for funding these organizations turn to a small business loan or line of credit as a way to acquire the financial assistance they need. Yet, there are obviously some concerns by businesses when it comes to finding these investors who may help them grow their company, become more profitable, and even begin to necessitate the hiring of additional employees.

Recently, it was reported that the SBA will begin offering new small business loan opportunities in 2011 and can streamline the application process, which could get credit and capital into the hands of small businesses and underserved communities in a shorter amount of time. Obviously, not all businesses may qualify for these loans, but companies who may need a small business loan through the SBA-guaranteed 7(a) loan program may qualify for funding of up to $250,000.

Yet, with companies who have seen difficulty when it comes to borrowing, many are looking at these alternatives to small business loans, mainly in the form of investing. Obviously, there are some businesses who may avoid angel investors or venture capitalists because they feel they will be beholden to these investors throughout the life of their company, yet there are opportunities which have been taken by businesses when investors have offered access to capital which can be useful in the growth of a company.

However, there are problems when it comes to investors as well, as many feel that the potential for growth in many areas of business is low at the present time next to the slow economy. Obviously, entrepreneurs or established businesses may benefit from investments, but winning over an investor or investment company may be difficult as many are still uncertain as to the immediate future of the economy and the potential for businesses to grow at a time where unemployment is so high and consumers may be unable to spend at a rate where businesses could increasingly profit.

When it comes to finding financial assistance for a business, though, there are these alternative options to small business loans which companies may turn to in the new year, as they have been resources for companies seeking to grow or simply establish themselves in the past. Yet, again, like small business loans, opportunities for a business to attract investors may be limited, but advisers suggest that, as is the case when a company is seeking a small business loan, businesses that show they are organized and have a well outlined a plan for the growth of their company and use of potential funding may be able to find the access to capital they need.