The Small Business Administration (SBA) 7(a) loan program is the most embracing small business loan source for almost every small business. Small businesses can quickly grow or expand with an SBA 7(a) loan program, after they fulfill its definite eligibility requirements. Though, because of excess demand for small business loans, the SBA announced that their 7(a) loan program cap has already reached for 2015 on the new loan amount that can be made.
Also, this is a good indication for the overall U.S. economy growth as more small businesses are feeling sanguine about the future and are eager to invest in their business’s growth. As of this date, SBA announced that they have already approved more than 45,000 7(a) loans accumulating more than $16.5 billion, 25 percent more as compared to last year.
On the other hand, the bad news is, now future small businesses can’t get a 7(a) loan program and have to look for other options since Congress only authorized a certain amount of money for the SBA 7(a) loan program. However, there are few other small business loan options are available:
Small Business Grants
Small business grants are another source to secure money for expansion of your business. Small business grants are available for specific purposes or certain businesses types like there are special grants for women-owned businesses or minority-owned businesses etc.
Borrowing from your personal or business credit cards is another option if you’re unable to get a small business loan or business credit line from a lender. The only negative aspect of this type of funding is the high interest rates as compared to business loans or lines of credit. This may risk your financial future even before your business is started.
Setting up an online crowdfunding campaign is another option to raise working capital for your business. You will find many cut-rate, accessible online platforms like Kickstarter, GoFundMe, or can ask your loved ones, existing customers, etc to support your business financially. Use of different strategies can help you raise donations, like giving away prizes or coupons etc.
As there’s rise in crowdfunding tools, there are many online platform lenders offering options for small business to get a small business loan. These alternative lenders include online marketplaces, peer-to-peer lenders and platforms like Merchant Advisors. In a CNBC article, “Why Small Businesses Don’t Want a Loan,” it is stated that online platform lenders are making up just about $3.2 trillion of economic activity, and particularly they are in-demand for businesses with revenues under $5 million.
So, if your small business is unable to get a SBA 7(a) loan, worry not – you still get a small business loan with many other options available. Whether it’s a traditional loan, a crowdfunding campaign, or an alternate online lender, you can raise capital for your small business. You will find numerous ways to avail financing for your small business.