Starting a small business comes with a plethora of challenges, the biggest of which is often financing. Getting the business off of the ground can take up to a year; it requires investors to establish a firm footing, as customers begin to accrue. However, not all businesses are able to secure traditional lending through a bank. They’ll need to rely on alternative methods to gain needed financial security.
Peer-to-peer financing is a new type of microloan supported by online communities. Rather than heading directly to the bank to secure loans, small business owners use lending clubs found online. The same credit scoring policies apply, but lenders will place money in the hands of owners at a high risk with a greater return. The business owner will pay this amount back at an agreed upon rate over time.
Many small business owners would like to maintain a powerful presence in the business world, without incurring a lot of debt. The use of business check cards can allow business owners to make many of their purchases using the funds already established to make professional purchases. Thus, business owners eliminate the need to incur more debt with an additional credit card.