2 Alternatives Ways for Funding Your Small Business

2 funding ideas titles



Getting access to small business financing is a crucial aspect of running a business. Every business encounters occasional cash flow problems, I just don’t want you to have no options when your back is against the wall. When customers take their time paying their bills or not pay them at all, when unexpected expenses arise, or if the business that relies on a short timeframe to make enough money to last all year. I believe these 3 Options will suite you when you need some line of credit, cash on hand, relieve of invoices, or back-up finances in the bank.

Line of Credit have some perks like:

  • Instance Access: Need to make a quick repair or deal with an emergency? Don’t have the time to go through a tedious loan application? Your line of credit is there.
  • Flexible Spending: Take out as much or as little as you need and only pay on that amount.
  • Sometimes unsecured: Most line of credit loans under $100,000 don’t require Collateral, so you won’t have to tie up anything to your business’s financials.
  • No-string -attached backups: A back-up line of credit could easily save your business of the wrong circumstances come around.



There are three we are looking at today and they are Inventory Financing and Equipment loan financing. Let me explain what these three Line of credit financing are all about.

1)      What is Inventory Financing?

An Inventory loan, or inventory financing, is a line of credit or a short-term loan specially designed to help small business owners buy inventory. With this type of loan, the business’ inventory (current and future) is used as collateral against the loan and can be surrendered to the lender in case the business is unable to repay the loan. Inventory financing is especially useful for businesses that must pay their suppliers in a shorter period of time it takes them to sell their inventory to customers. It also provides a solution to seasonal fluctuations in cash flows and can help a business achieve a higher sales volume.

Since these companies are going to want you to have a good amount of inventory this line of credit is not symbol for start-up companies. They want existing companies that are established and with a track record of buying inventory and keeping good records. This is the only way they will use your inventory as collateral. Also, companies who goes for the Inventory financing is retails or product-oriented businesses, not for service businesses (which have no physical inventory).



Demonstrate accurate inventory management. Make sure your inventory management system is well organized. Can employees find what they need? Are items grouped similarly by product line, color, size, etc.? Having a proper inventory management system is key to positioning your business to get your inventory loan approved. You must also have accurate business records including an account of your total inventory. You may need to work with an auditor to ensure the integrity of the numbers you present to lenders.

Check the elements. Is your inventory storage or warehouse facility temperature controlled? Is it too humid or too dry? How are you protecting your inventory supplies from the elements? Any damage to your inventory is like throwing money out the window. It’s wasteful and irresponsible, and it can be prevented simply by putting in place some easy checkpoints for you and your employees.

Be prepared. It’s not unusual for inventory loan lenders to make surprise inspection visits – after all, the lender wants to know what kind of risk they will be taking by using your inventory as collateral. Prepare your workspace, your inventory space, your employees and yourself for visits from lenders. Even if the surprise visit never happens, at least you have established a pattern among your employees to have high working standards.

Maintain impeccable sales records. This should be a no-brainer. You truly want to show lenders that your business is successful, and the most important metric is strong sales records. Showing lenders, a solid track record of sales success will help you qualify for that inventory loan to help you replenish and restock inventory and move your business forward.

Don’t be wasteful. There is nothing worse than a warehouse or storage facility filled to the brim with inventory that is slowly moving or worse, not moving at all. Of course, you need to have some inventory on hand to fulfill orders and to meet customer demand. But too much inventory shows poor planning, poor management, poor forecasting and predictions of sales, low inventory turnover rates (which are not good in the eyes of potential lenders) and poor leadership. Don’t be wasteful. Only keep enough inventory on hand to be able to fulfill orders for the next few months. Anything beyond that, especially for a small business, is probably too much.

Inventory financing can be an essential option for small businesses to get the funding that they need to replenish inventory, unlock extra cash flow, keep store shelves well stocked, make customers happy and maintain efficient and profitable business operations. With careful planning, inventory financing can be part of your company’s financial toolkit.


Kabbage is a good company where they can help you with inventory line of credit and much more. Gives you lines up to $150,000, 6-or 12-month terms, there are no prepayment penalties (you can save money when you pay off the entire loan balance early), and inside of interest Kabbage charges a simple fee each month you have an outstanding balance.

For example: 6-month term at a 4% Fee Rate

Months   Rate   x   Principal = Monthly Fee

1-2           4.0%   x $10,000 =   $400

3-6       your rate x $10,000 = $100


So, every month you have a balance. You’ll pay back 1/6 of the total loan (for 6-month loans) or ½ of the loan amount (for 12 month loans) plus the monthly fee. Fee rates range from 1.5% to 10% based on a number of business performance factors.





 Street Shares

Good option for:
·         Bad personal credit

·         Fast cash

·         Good personal credit

·         Flexible cash

·         Newer businesses

·         Good personal credit

·         Businesses looking for less than $100,000

Do you qualify?
·         No minimum personal credit score required

·         At least one year in business

·         $50,000+ annual revenue

·         Business checking or online payment platform required

·         600+ personal credit score

·         At least six months in business

·         $120,000+ annual revenue


·         600+ personal credit score

·         At least one year in business

·         $25,000+ annual revenue

$2,000 to $150,000 $6,000 to $150,000 $2,000 to $100,000
24% to 99% 16% to 62% 9% to 40%



 Credibility Capital


Good option for:
·         Good personal credit

·         Established businesses

·         Competitive rates

·         Bad personal credit

·         Companies with strong cash flow

·         Retail and food services

Do you qualify?
·         650+ personal credit score

·         18+ months in business

·         $150,000+ annual revenue

·         500+ personal credit score (most borrowers have 660 or higher)

·         At least one year in business

·         $100,000+ annual revenue

$10,000 to $350,000 $5,000 to $500,000
10% to 25% 9% to 99%



2)      What is Equipment Financing?

At some point in your business, you’ll need to upgrade, improve upon or replace various pieces of equipment. An equipment loan can provide the working capital that means the difference between succeeding or struggling. You can use an equipment loan by covering the costs associated with running your business on a day to day basis. Additional ways you can use an equipment loan include: replacing existing equipment, repairing equipment that has been damaged, and purchasing new equipment. Asset-based lenders are concerned with your upcoming prospects. Since the money you’re borrowing from then is tied to a specific bit of collateral, they’re betting on that new piece of equipment helping you repay your debts.


Funding Options





Credibility Capital

Smart biz


Best for Fast funding for large equipment purchases Small equipment purchases crowdfunding Strong-credit borrowers SBA loans Competitive rates
Loan details
Loan amount $5,000 to $2 million $2,000 to $100,000 $25,000 to $1 million $10,000 to $350,000 $30,000 to $350,000 $25,000 to $500,000
APR 6% to 24% 9% to 40% 7.4% to 36% 10% to 25% 8.5% to 9.21% 7.4% to 36%
Minimum qualifications
Personal credit score 585 600 600 650 600 ($30,000 – $150,000) 650 (more than $150,000) 620
Time in business 6 months 1 year 1 years 18 months 2 years 2 years
Annual revenue $75,000 $25,000 $100,000 $150,000 50,000 No requirement


If you want to crowdfund some of your financing: Able Lending provides a platform to recruit your friends and family as backers for your loan. You can opt for a loan that combines your backers’ contributions with Able’s or one that the lender backs in full.

For faster processing and higher loan amounts: Funding Circle is a good option if you don’t have time to wait for an SBA loan; on average, funding time is 10 days. Plus, the lender’s maximum loan amount is $500,000, compared with SmartBiz’s $350,000.

For strong-credit borrowers: Credibility Capital offers short-term financing with competitive APRs ranging from 10% to 25%. Equipment loans make up about 20% of Credibility Capital’s lending.

For fast SBA loans: SmartBiz offers U.S. Small Business Administration loans, which are generally the least expensive small-business financing available. With its online platform, SmartBiz typically can process applications in several weeks, compared with three months or longer at banks.




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