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For those wanting to obtain a business loan for a small business project the alternatives would include venture capital funding, stock market quotes for companies that are already established. Alternatively pure cash financing from the small investors savings and money from friends and family can be used. Another step can be to advertise the company for ownership by finding a suitable business partnership.

. The control of the partnership is more difficult, though the small business owner saves some money in being able to carry out the day to day business without needing a bank loan. The money saved can sure help in this case. The company can start trading with fewer initial financing problems.

Small businesses can try to find suitable funding from venture capitalist companies and equity investors who lend the business owner money in return for a stake in the company. The expertise offered by venture capitalist can be useful in helping the company make some useful business decisions that help the company achieve its objectives in terms of profits and sales.

The small business can be started using the owners own savings and equity investments by selling his/her own home to fund the business. The company then can establish his or her own business decisions and strategy without the loss of control and have greater flexibility in the direction of the business.

Whilst bank loan funding is the most likely source of finance for many businesses the entrepreneurs can inject their own money thus avoiding the loan criteria of having a floating charge against the business. The savings in interest payments of loans are avoided if using cash and the bank manager is no longer a creditor in the business. Also these days due to the credit crunch some business owners can not get business finance. The alternatives should be used so that the loss of control and the business decisions are held with the owners and stakeholders who come from within the business. Partnership agreements and own cash funding should be considered first as opposed to bank loans. For small businesses expertise and initial financing decisions which should use leasehold as opposed to owning the freehold of the premises as well as minimising on costs and doing the best to maintain positive cash flow during the early stages of the business.
Supplies of goods should be agreed with delayed terms to suppliers and the owner should have orders from customers in advance to show the suppliers that the company is of worthy of repaying credit.

Learn more about this author, Costas Chryanthou.
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