Note: This is a guest post by our partners at Fora Financial.

Since the COVID-19 pandemic, many business owners have turned to government business loans to keep their operations afloat.

Without government funding, many businesses wouldn't have survived the COVID-19 pandemic. However, government loans aren't always the best funding option, and many business owners need additional funds to close the gap. In addition, government funds typically come with restrictions on use, so you may need more flexible funding to address each of your required expenses.

Luckily, if your government loan funds have run out or you missed the deadline to apply for the PPP (Paycheck Protection Program) loan, other financing options are available. In this blog post, we'll review the diverse business funding options you should consider.

👋 If you have questions or want to talk through these options, book a time to talk with us!

What Business Funding Options are Available?

Business Loans from Alternative Lenders

Government business loans aren't your only funding option; various alternative lenders provide financing.

For example, many lenders provide term loans, in which you can receive a lump sum loan amount and will be required to repay it during a set term. Compared to government-issued funds, these usually offer faster application processes, more flexible terms, and typically have no restrictions on use.

Business Credit Lines

Like business credit cards, a business line of credit is a type of financing that comes with a set credit limit. However, you can use a business credit line for purchases that are too expensive to charge to a business credit card, making it exceedingly more flexible.

Invoice Financing

Invoice financing is a viable option if your cash flow is affected by outstanding customer invoices and your government loan funds weren't enough to balance cash flow.

If you decide to pursue invoice factoring, you'll select an invoice financing provider who will purchase your outstanding invoices from you, using them in place of collateral. When your customers pay the invoices, the loan is repaid with interest.

The benefit of having access to invoice financing is that while you wait for your customers to pay their outstanding bills, you can still make rent payments on time, meet payroll deadlines, and afford other time-sensitive expenses.

Equipment Loans

Business owners struggle to afford expensive equipment repairs, upgrades, or purchases in many cases. Even if you previously received a government loan, there's a chance that you couldn't afford equipment costs. In addition, some government loans can't be used for equipment.

Consider pursuing equipment financing if you still need additional funds to meet your business's equipment needs. This loan can only be used for equipment costs, so you should seek funding elsewhere if you need money for other business expenses.

Merchant Cash Advances

Does your business accept credit card payments? If so, you'll likely qualify for a merchant cash advance.

Unlike a term loan, merchant cash advances are a lump sum financing option with no set repayment terms. Instead, MCA remittance fluctuates based on your business's future credit card sales.

Small Business Grants

If you struggle to qualify for the funding options previously mentioned, you may want to seek a business grant. The most notable benefit of this financing option is that you won't have to repay a business grant; you'll simply receive funding for your business.

There are numerous grant programs, such as:

• Federal agencies
• State and local governments
• Private organizations
• Small business grants for veterans, minorities, women in business, and other under-served communities.

Ask Your Government Lender for Additional Funds

In some cases, you may be able to qualify for additional government funding, such as SBA (Small Business Administration) loans. However, you'll need to restart the application process. You should keep the following factors in mind:

Strict eligibility criteria: As you already know, the SBA has strict qualification standards for business loan applicants and will review the following aspects of your business finances:

• Credit Score
• Time in business
• Financial performance
• Planned Use of Funds

Set funding usage requirements: In most cases, government loan programs have specific requirements for how loan funds can be spent. For example, the SBA Disaster Loan is provided to business owners with businesses located in designated disaster zones.

A personal guarantee is required: Government lenders require applicants to sign a personal guarantee, even if they have already received a government business loan. This document signifies that you agree to be personally responsible for repaying the agreed-upon loan amount as the borrower.

Conclusion: Business Funding Options Are Available

Lacking the necessary business financing to run your business can be stressful, but it doesn't have to be. Once your government funding runs out, don't hesitate to pursue one of the business funding programs mentioned in this post. You can ensure that your business has ample resources to pursue growth opportunities by securing additional financing.

📌 If you're curious about these options and want to discuss with a Skip funding expert, book a time to talk with us here!

Note: This is a guest post by our partners at Fora Financial.