You may have more options than you think
Bank loans are becoming harder and harder to get if you are trying to obtain working capital for a small business. Small business loans can be useful for a variety of reasons, but if a business has fallen on hard times it can be difficult to find a bank who is willing to help. Small business owners do have alternative sources of funding they can look into.
Merchant loans are becoming popular as more and more small businesses have started taking credit cards. A portion of each credit card sale is used to pay off the money borrowed from the cash advance company. Their interest rates are higher than what a bank would charge, but they take a much greater risk by loaning the money without collateral to back it up.
Angel investors are another way to raise working capital. Investors will loan the business owner the funds they need in exchange for repayment in a timely manner. They will often request a percentage of the amount loaned to be paid as interest over a specific period of time. In some cases, they will offer the funds as long as they are allowed to offer advice to members of management in an attempt to improve the way the business operates.
Hard money loans are also an option for small business owners. This type of loan has nothing to do with the credit rating of the business or how credit worthy the owner is. A hard money loan is one that allows the owner to place the company's assets up for collateral to secure the total cost of the loan.
A company may opt to sell its Accounts Receivables. This basically puts immediate funds in the business's coffers, even though the money is not there to cover it. As the money is paid in by the clients, the business turns the money over to the lending agency. This type of loan carries a much higher interest rate than normal business loan, but they are guaranteed due to the nature of the business. The money is already owed to the company, it is just a matter of time before it is received.
If you can't get a conventional loan, there are always other options. With a little searching, you can find the funding your business needs to get through any difficult time.