Most new businesses need at least some start-up capital. In the first instance it makes sense to call upon your own resources – emptying the savings box or raiding the holiday fund. You may even decide to trade in assets or borrow from friends or family before seeking interest-bearing credit. But ultimately, the need may nevertheless arise to go cap in hand to a lender.

But what becomes of your business idea when the lender says no? Possibly there was a debt back in your dim and distant past that you were slow to settle, or an earlier business venture which didn’t quite go to plan? For whatever the reason, the money you need is not available to the likes of you.  So what to do?

Social Lending Site

One option is to turn to a social lending site. This is a relatively new, web-based initiative whereby private individuals lend to one another. It may prove easier to explain to a real live human being – one who may themselves have been in your situation and thus have a certain empathy – how you came to be considered unworthy of a bank loan. Often the qualifying criteria for being accepted for a social loan will be less prohibitive than that laid down by a bank.

Another approach might be to use any existing assets, including any machinery or work tools of value, as collateral in negotiating short-term funding. Some business lenders will lend against security when otherwise they would have been reticent.

As a last resort factoring, or the selling of outstanding invoices at a discount to a third party, could be considered. The factor becomes the claimant against the invoices and makes a profit when your customer settles them in full.

Of course it is always better to have a clean reputation and to be able to call upon conventional credit without any fuss.  But as the old saying goes, where there’s a will there’s a way.