{"id":19649,"date":"2016-02-22T00:00:28","date_gmt":"2016-02-22T05:00:28","guid":{"rendered":"https:\/\/www.wework.com\/creator\/?p=19649"},"modified":"2020-04-03T18:06:35","modified_gmt":"2020-04-03T22:06:35","slug":"when-you-cant-get-a-business-loan-3-ways-to-raise-money-fast","status":"publish","type":"post","link":"https:\/\/www.wework.com\/ideas\/community-stories\/member-spotlight\/when-you-cant-get-a-business-loan-3-ways-to-raise-money-fast","title":{"rendered":"When you can\u2019t get a business loan, three ways to raise money fast"},"content":{"rendered":"\n<p>Just about every new company has been there: you need funds, but the bank says no to a loan. What are some alternative ways to raise money?<\/p>\n\n\n\n<p>Rachel Hersh, Northeast region sales director of <a href=\"http:\/\/www.prestigecapital.com\/\">Prestige Capital<\/a>, says there are several good options. In the lending business for two decades, Hersh says there are three common scenarios in which startups can get much-needed capital even when banks won\u2019t make loans.<\/p>\n\n\n\n<h2  id=\"your-company-is-too-young-to-get-a-loan\"class=\"wp-block-heading\"><strong>Your company is too young to get a loan<\/strong><\/h2>\n\n\n\n<p>Your startup is scaling, and you need money to hire more people. You haven\u2019t been in business long enough to get a loan from the bank, but you do have a large volume of accounts receivables. A bank can refer you to a company like Prestige Capital to seek alternative loans.<\/p>\n\n\n\n<p>\u201cI work closely with Silicon Valley Bank,\u201d says Hersh, a <a href=\"https:\/\/www.wework.com\/locations\/new-york-city\/bryant-park\">WeWork Bryant Park<\/a> member. \u201cThey refer deals to me when people don\u2019t qualify for a bank loan because their companies are young. I also work with their investors to give them operating capital.\u201d<\/p>\n\n\n\n<p>Hersh says she was recently introduced to a content marketing company that needed funds to hire more people. She advised the company to consider accounts receivable financing\u2014basically, it\u2019s when you get cash by selling your invoices. Your company\u2019s line of credit is based on sales instead of net worth.<\/p>\n\n\n\n<p>\u201cI can take a company and grow them however much they want to grow,\u201d Hersh says. \u201cWe grow with our clients in a way the bank could never keep pace, and we will deal in the media space, the ad tech space, and we do some deals in tech, software, and services.\u201d<\/p>\n\n\n\n<p>Keith Smith, co-founder of <a href=\"https:\/\/www.payability.com\/\">Payability<\/a>, a provider of fast capital for businesses in mobile, media, and e-commerce, says he steps in when a bank is hesitant to increase the line of credit for a young company.<\/p>\n\n\n\n<p>\u201cSay a company is growing rapidly right after it first launches, and it gets a bank loan,\u201d says the <a href=\"https:\/\/www.wework.com\/locations\/new-york-city\/soho\">WeWork SoHo<\/a> member. \u201cBut the company gets only $100,000 line of credit, and it needs more. The bank will say it will think about increasing the company\u2019s line of credit, so \u2018let\u2019s wait a few more months.\u2019 That doesn\u2019t work for a company trying to grow that needs the money now.\u201d<\/p>\n\n\n\n<h2  id=\"you-need-money-to-ship-or-order-more-parts-for-your-product\"class=\"wp-block-heading\"><strong>You need money to ship or order more parts for your product<\/strong><\/h2>\n\n\n\n<p>Here\u2019s the scenario: you\u2019ve got a great product that\u2019s ready to hit the shelves. You\u2019ve got distribution deals with large retailers, but the cost of shipping is quickly adding up. You\u2019re nervous about fronting that much money because you don\u2019t know when it\u2019ll pay out.<\/p>\n\n\n\n<p>\u201cSay a health bar company sells its product to Whole Foods,\u201d Hersh says. \u201cSo after the product ships to the customer, and my client sells to Whole Foods and generates an invoice, we buy that invoice and pay off the purchase order without taking equity.\u201d<\/p>\n\n\n\n<p>Let\u2019s say it\u2019s not just the shipping costs you need covered. You also need to generate more products, so you can send out more shipments. Who\u2019s going to give you the money to build and order new parts for your products? If you\u2019re a young company, it\u2019s tough.<\/p>\n\n\n\n<p>Companies like Prestige Capital can provide a credit line against receivables, so you have the money to rent out warehouse space, buy all the necessary equipment, and keep chugging along.<\/p>\n\n\n\n<h2  id=\"you-need-flexible-financing\"class=\"wp-block-heading\"><strong>You need flexible financing<\/strong><\/h2>\n\n\n\n<p>Say you\u2019re a mobile app developer, a marketing company or a supplier using an online retailing platform. You can\u2019t wait 60 days for a company Amazon to pay you if you plan to keep scaling your business.<\/p>\n\n\n\n<p>Payability can provide cash to small businesses based on shipments delivered to Amazon\u2019s supply warehouse.<\/p>\n\n\n\n<p>\u201cOur clock starts ticking the moment you ship to Amazon,\u201d Smith says. \u201cWe simplify the collection process with Amazon, and you\u2019re paid on weekly basis based on what you shipped to Amazon instead of waiting.\u201d<\/p>\n\n\n\n<p>It doesn\u2019t matter if you have an immaculate credit score. It doesn\u2019t even matter if you have no credit history. The beauty of alternative lending is that you keep capital flowing through your company through both good and lean times.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Just about every new company has been there: you need funds, but the bank says no to a loan. What are some alternative ways to raise money? Rachel Hersh, Northeast region sales director of Prestige Capital, says there are several good options. In the lending business for two decades, Hersh says there are three common [&hellip;]<\/p>\n","protected":false},"author":917,"featured_media":19651,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[43903,43911],"tags":[],"class_list":["post-19649","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-community-stories","category-member-spotlight"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.4 (Yoast SEO v25.3.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>When you can\u2019t get a business loan, three ways to raise money fast<\/title>\n<meta name=\"description\" content=\"Just about every new company has been there: you need funds, but a traditional loan won&#039;t work.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.wework.com\/ideas\/community-stories\/member-spotlight\/when-you-cant-get-a-business-loan-3-ways-to-raise-money-fast\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"When you can\u2019t get a business loan, three ways to raise money fast\" \/>\n<meta property=\"og:description\" content=\"Just about every new company has been there: you need funds, but a traditional loan won&#039;t work.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.wework.com\/ideas\/community-stories\/member-spotlight\/when-you-cant-get-a-business-loan-3-ways-to-raise-money-fast\" \/>\n<meta property=\"og:site_name\" content=\"Ideas\" \/>\n<meta property=\"article:published_time\" content=\"2016-02-22T05:00:28+00:00\" \/>\n<meta property=\"article:modified_time\" 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