4 Alternative source of capital for small business

Lack of capital is a classic problem for most small business. Many small businesses use personal funds to sustain the business, but often run out of funds and effort should be closed. In fact, there are several ways to obtain a source of capital or investment alternatives.

4 Alternative source of capital for small business
4 Alternative source of capital for small business

We will discuss an alternative source of capital for SMEs here.

Borrowed funds in the Bank
The first and primary way is by borrowing funds at the bank. The classic way of getting the source this capital had long been there and remains reasonably powerful for most parties. One of the advantages of borrowing funds from the bank is a large loan that is usually high, approximately USD 1 million  to the top.

However, for some SMEs, the excess can be felt even as a debilitation due to huge bank loans that turned out to be too big for their needs. The other major weakness of bank lending is the requirements and processes that are considered difficult.

However, if you are still interested in borrowing capital from the bank, do not hesitate to check the loan product of the bank. Especially since many banks are still open capital loans for SMEs. Look for bank loans that are suited to your business needs.

Sharing system
This revenue sharing system is still rare in SMEs. What is the meaning of the profit-sharing system itself? Revenue is an alternative financing model in which a lender's business is capitalized (can be an individual or a group). Financiers and business owners agree that part of the earnings or business profits will be redistributed to the investor.

One of the reasons the revenue-sharing system is less popular is because it is less favorable. Also considered to be less profitable for the business for the long term. In addition, if one of the investors out, then business activity will be disrupted.

However, revenue sharing can be an effective funding model for those of you who open a business first because of course your business is still very small and not yet qualified for financial products that have more stringent requirements.

Become s distributor
The third source of capital is to become a seller. Your customers are goods. What does it mean? For example, in your area are rarely sold basketball shoes. You can order basketball shoes with reseller system from big city. By becoming a reseller, part-time activities can help you accumulate profits into capital.

P2P Lending
Peer-to-Peer Lending or P2P Lending is now a source of alternative business capital loans for SME players.  In fact, the P2P Lending registration process is similar to a bank-funded application system, but the P2P Lending platform fund is not managed by a financial institution or non-bank institution. Although it may be considered a new funding model, P2P Lending has several advantages, especially for SMEs.

The flowers are affordable, in addition to the online application process, easy, and fast. Fund disbursement is not complicated and refunds are also not troublesome. P2P products are also targeted specifically for smaller businesses, with loan ceilings and tenor as needed.

That's 4 sources of capital that can be used as an alternative by SMEs in developing their business. Hopefully useful for you.

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