Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Five Alternative Financing Options

Posted by: Today's Tip Contributor on August 23, 2011

Getting new business often means needing new financing, which can be difficult now that balance sheets have been roughed up over the past several years. For such companies, it may be difficult to secure bank loans, lines of credit, and even Small Business Administration loans. Yet there are alternative financing options, even if they are a little more costly.

1. Asset-based lending. These loans, often in the form of lines of credit, are based on a percentage of the value of a company’s assets, including inventory and accounts receivable.

2. Factoring. This financing alternative allows businesses to borrow against outstanding invoices. In a sense, a company sells its accounts receivable at a slight discount.

3. Hedge funds and private-equity funds. A growing number of funds, flush with cash, are lending to midsized businesses, but often charge relatively high interest rates.

4. Your 401(k). Although somewhat complicated, business owners can tap their retirement account for up to $50,000, or 50 percent of the value of the retirement account. You’ll need the help of a financial planner or retirement-plan administrator to do this.

5. Vendors and suppliers. Not all vendors or suppliers will be interested or in a position to help, but these companies have a stake in your success. The right ones may be interested in providing financing to good customers.

Scott Rutter
Citrin Cooperman
New York

Post a comment



Want to improve the way you run your business? Entrepreneurs, academics, and consultants from diverse industries offer practical advice on a variety of topics each business day.

To submit a tip for consideration, first check our archive of previous tips to make sure you're not repeating a tip someone has already contributed. Then send the tip to Small Business channel contributor Michelle Dammon Loyalka. Because of the volume of material she receives, she may not respond to each individual.

BW Mall - Sponsored Links

Buy a link now!