Creative—And Successful—Alternative Funding Options To Commercial Loans

Sometimes the whole process involved with getting approved for commercial loans can be enough to make you change your mind about going into business for yourself. Thankfully, there are other ways to find financing.

The approval process for commercial loans is part of your “process” for opening your own business, but it can often be a very unappealing process. Whether you are going the traditional route through a bank or trying to find a hard money lender that is familiar with your type of business, the process can take the excitement right out of you.

But you can’t even get started without a little money, so you have to just suck it up and do it—right? Not necessarily. You just might have to get a little creative…

Options To Commercial Loans

At one point in time, the only option to commercial loans was that Italian friend of your cousin that hangs out at the local pub all the time. His interest rates were kind of high, and there wasn’t much leeway when it came to missing payments. But that does not need even to be an option for you anymore.

The following are five alternatives to commercial loans:

• Throw a fundraising party: No, this does not mean put a big jar next to the keg for people to pitch in. If the success of crowdfunding has taught us anything, it’s that there are plenty of people out there that are interested in investing that do not have enough capital to fund your project wholly. Rather than go online and get a bunch of strangers involved, throw a party, get your rich friends liquored up, and talk them into becoming a silent investor.

• Approach the competition: Business is war, but sometimes the enemy of my enemy is my friend. Pitch your idea to a competitor and see if they may be interested in collaborating. You may lose some control with this option, but once they start investing, they are not likely to stop until the project is complete and a new business born.

• Grants: Just like in school, there are grants out there for all sorts of businesses and business people. There may be conditions attached to them, but otherwise, they are essentially free money. Who doesn’t want to use free money to start a business?

• Invest: So—you have some money, but it’s not enough for your project, and you can’t get approved for a loan. Invest what you have, or a portion of it, and then use the gains from your investment to finance your project.

• Sell some product: it can be a great way to generate buzz and raise funds. By selling a limited amount of your product or by taking pre-orders, you can get some cash coming in. It doesn’t hurt to find out how well your product may be received by the buying public either.

You Don’t Have To Take No For An Answer—You Just Have To Get Creative

When you decided to get into business for yourself, you likely had to use your brain power to come up with whatever your brilliant idea is. While there may be a semblance of safety by going the traditional route for commercial loans, they aren’t your only option.

You may have to get creative, but there is money out there.

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.