Alternate Small Business Financing Options

When a person dives into a new small business, he always thinks of various alternative financing options. Even though big businesses might not have that great an urge to know about such financing options, small businesses that are typically short of traditional financing options are always game to explore them. In case, you too are looking for such alternatives, then you have come up at the right place to get all the information about the alternative financing options for small businesses.
Make A List: First of all, make a proper list of names with their family and friends who are close to you. Then, evaluate who all you can contact for your financing needs. Remember, to ask from people who are trustable. Make your list starting with your inner circle, including your parents, siblings, grandparents, uncles, aunts, cousins, in-laws and close friends.

Evaluating Each Person: Once you have made a list of you near and dear ones, then start evaluating each person one by one. You can evaluate each person on basis of four characteristics, like, trust in you, business experience, ability to afford the investment and lack of emotional baggage. Once you will evaluate in this way, you will end up drawing a list of best people with at least two of the above four mentioned characteristics.

Evaluating All The Prospects: Next step is to evaluate all the prospects. Once you are able to know which prospect best suits your financing needs, you will be able to ask for business investments from there. Consider, whether you would like an investment as a business transaction or as part of your personal relationship. For a better evaluation, you can divide the prospects in four categories, including, savvy and worried, inexperienced and worries, savvy and analytical and inexperienced and analytical. All the type of prospects need to be tackled differently.

Make The Pitch: The fourth step is to make the perfect pitch for your investors. You first need to start with your business plan or idea and describe it to the investor. Make sure to convince the investor with your business goals. Ask your investor some genuine questions like if he or she is satisfied with your business goals or not.

Tackling Objections: The most important phase of availing alternative financing options is to tackle with objections. The most common objections that the investors raise are:

• “I have different plans for the same money.” In this case, be polite and ask for the different plans and try to convince the investor with your own plan.
• “I can’t afford to lend you the money.” In this case, try to suggest a small amount as loan.
• “I have invested my money elsewhere.” In this case, try to motivate the investor to contact his or her financial advisor to check whether the money can still be moved without any penalty.

We now assume that you have got a fair enough knowledge of the alternative financing options for your small business.