After declaring bankruptcy, you are generally persona non grata at some of the major financial institutions. This can put you in a tricky financial scenario, because you’ll need capital to run your business. So, do you quit and go back to your day job? The answer is no, because there is always a way to secure a loan or a cash injection in a pinch. Just because the banks won’t give you money, it doesn’t meant that you should throw in the towel – there are many other institutions and financial wells that you can tap into. You just have to be creative and resourceful. Here is how to secure a small business loan after bankruptcy.
- Look for factors. A factor is basically an individual or a business that offers cash loans based on payable purchase orders. Basically, if you have a number of orders to fulfill, a factor will give you the money you need to produce those orders. This can come in handy when your orders go beyond what your available cash holdings can handle.
- Look for cash advances. Another option is to tap into cash advances. There are many companies, like Express Capital, that can help get a business loan for your company. Many of these cash advances are granted based on how much money your business has coming in. If you have purchase orders and your business is making money, there is a much higher chance that you will be approved for a cash advance – regardless of the fact that you declared bankruptcy in the past and regardless of the fact that your credit may be less than healthy.
- Look towards credit lines. If you have a number of orders to produce, you may be able to tap into credit lines. You can usually set up credit lines with some of your manufacturers. Basically, the manufacturer covers some of the initial costs. When you receive your monies from the retailer, you can then close your credit line. When it comes down to it, this can be a great way to get your products manufactured and hold on to your available cash flow.
- Look towards a local bank. When it comes down to it, a local bank may be a lot more willing to give your business a loan than a larger private bank. If you are a small local business, the bank may have a vested interest in making sure your business succeeds. If you are a mom and pop grocery store, a local bank will give you an influx for however much you need and you’ll be able to pay it off in segments.
- Look for angel investors. If all else fails, you may need an angel – an angel investor. Angel investors are always looking for struggling businesses to give money to. If an angel investor sees potential in your business, you could have the loan you need. When speaking to an angel investor, make sure that they actually have the capital they want to give you. In the end, you don’t want to be caught in a scam.