Suggestions a small business owner can use to get some cash are introduced in an article which has the appealing title of 5 Surprisingly Cheap Forms of Small Business Financing.
But extreme caution is called for.
As an example, credit cards are cited as one of the methods of business financing:
A 16 percent APR might sound high for a personal loan, but new businesses often face APRs of 40 percent or higher from alternative lenders.
In that context, credit card financingis surprisingly inexpensive. SBA loans and traditional bank loans are among the few financing options with a lower APR, but these have much higher requirements and only offer loans of $30k or more. Marc Prosser, business.com
Surprisingly inexpensive? Is he kidding? Whew! What else does he suggest for a business owner who needs some cash?
Square Capital is another one: With an APR of 35 percent, Square Capital is much cheaper than other merchant cash advance providers (who can assess an APR of up to 80 percent). business.com
Sounds like an effective way for a business owner to become Square Capitals slave. In two years he would be paying back, if he can, double what he borrowed.
LiftFund, not suggested by Prosser, is a funding source that appears much more doable. It is a nonprofit that teams with government to offer 5.5 percent loans. It operates throughout the southeastern US as far north as Kentucky.
Even with what appears at first glance to be a reputable organization such as LiftFund, its best to do ones due diligence and not to let such words as nonprofit and government lead one into complacency. For example, can the terms of the loan change drastically after the loan is taken out and the papers are signed similar to what can happen with a credit card? What are the penalties, if any, for late payments?