Updated on: March 31, 2017
“Alternative financing” for businesses can have different meanings to different people. The information below is intended to help you begin brainstorming alternative business funding that you may not have otherwise considered.
The more you know about possible alternative sources of financing, the better positioned you will be to find the resources you need to be successful. After reading the below information, do your research and talk to your accountant or other professional advisor to learn more.
Learn more about the forms of alternative financing available by browsing the topics below.
Factoring is a financial transaction whereby a business sells its accounts receivable (i.e. invoices) to a third party (called a factor) at a discount in exchange for immediate money with which to finance business operations and improve cash flow.
Factoring your receivables allows you to be paid by your factoring company instead of waiting for your invoices to be paid by your customers which, in turn, can improve your business cash flow when you may otherwise be unable to meet your current working capital needs. Factoring is different from a bank loan in that, among other things, the emphasis is on the value of the receivable, not the credit worthiness of your business.
There are many factoring companies available in today’s market that can fund a percentage of your company’s creditworthy accounts receivable. Learn more about how to use factoring for cash flow and talk to your accountant to help you understand the advantages and disadvantages of factoring.
Leasing equipment can be a good option for business owners who have limited capital or who need equipment that must be upgraded every few years. The primary advantage of leasing business equipment is that it allows you to acquire assets with minimal initial expenditures, thereby preserving capital in your business.
Because equipment leases rarely require a down payment, you can obtain the goods you need without significantly affecting your cash flow. When compared to business loans, leases can be easier to obtain and often have more flexible terms. Often, lease payments can be deducted as a business expense, reducing the net cost of your lease. It’s important to note, however, that lease financing is generally more expensive than bank financing.
Deciding whether you should lease or buy will depend on your situation. Each business is unique, and the decision to buy or lease business equipment must be made on a case-by-case basis. Be sure that you explore your leasing options and thoroughly understand the advantages and disadvantages of leasing, and talk to your accountant before making any decisions.
Vendor financing may be an option worth exploring as you seek ways to improve your business cash flow. If you’ve established a good relationship with your vendors, sometimes it’s possible to get them to agree to extend their terms for a particularly large order and/or for an extended length of time. Essentially this becomes a form of financing for your business.
If you’re a new company with little or no history, you may want to consider approaching vendors and showing them your business plan. If the vendor is convinced your business will not only be successful but will also become one of their better customers in the future, they may be willing to work with you to provide extended or preferred terms now.
Finally, if you have a proven track record with a vendor and owe them payment for a large order, they may be willing to consider exchanging their accounts receivable from you for a notes receivable. As with any request for funding of any kind, be sure that you are prepared to have these kinds of conversations with your vendors.
There are numerous local, state and federal loan programs available to help businesses find the capital they need to start and grow their operations.
Here’s some important things for you to know about these programs:
- The requirements for receiving funds from a government loan program are similar to what traditional banks are looking for. After all, government loans are funded by taxpayer dollars, and the need to make sound loan decisions is just as true for the government as it is for a bank. As such, make sure that you’re prepared to talk to a lender regardless of what source you are requesting the funds from. One of the worst things that you can do is to approach a lender – whether the government or a bank – and not be prepared; this only serves to send a message to the lender that you’re not a good credit risk. Here’s the good news…There are resources right here in your community that can help you assess your readiness to talk to a lender.
- Many government loan programs require that a bank be involved in the financing. It’s important for you to understand this for a couple of reasons. First, you need to make sure that you’re prepared to talk to a lender; failure to do so can diminish your chances of securing the funding you need (see #1 above for help with this). Second, the more you understand what government loan programs are available the better prepared you will be to talk to your banker. The reality is that not every loan officer will know about all available programs. For this reason, if you’ve done your homework you can potentially be in a position to educate your banker about programs that they can use to turn their response to your loan request from a “maybe” into a “yes”. Before you talk to a lender, take time to learn how specific government programs can benefit your bank.
- Do your research and make sure you understand all of the programs that are available. You can’t utilize a program that you don’t know about. To help with this, we’ve compiled information about government programs on the Financing page.
Credit cards can be an acceptable form of funding for your business, and especially for start-ups, but this is only going to be true if you thoroughly understand the advantages and disadvantages and have a definite repayment source for the credit card debt.
For example, credit cards may work for you for short-term expenses that you know you’ll be able to repay quickly, but watch out for high interest rates and beware of mixing personal and business expenses on the same card. Shop for a good interest rate, understand fees, and know how your use of credit cards affects your credit score. The more you understand the advantages and disadvantages before you incur the credit card debt, the better off you will be.
Crowdfunding and Peer-to-Peer Lending can be an option for business funding, and as credit tightens, a growing number of entrepreneurs are turning to these lending sites to get the cash they need. Be sure to do your research and understand all aspects of such lending including, among other things, the impact it can have on personal credit scores.
A few sites that you can explore are included here. These sites are being provided for convenience only. No representation or warranty is made about these sites; visitors should conduct their own due diligence before using any service. Peerbackers; Kickstarter; Prosper.com; Kiva.org. Learn more about Crowdfunding.
Starting



Find the resources and information you need to help you start your business. From assessing your readiness to be an entrepreneur to launching your business and everything in between, Charlotte has the resources to help you position your business for success.
Below, you’ll find several resources for starting your business. Click on each image to expand and learn more.

Contracting Services



Explore the resources on this page to learn about opportunities that may exist for you and your business. From contracting with local, state and federal governments to contracting with major corporations in the private sector, there are many opportunities to do business in the Charlotte region. Explore the resources below to learn about opportunities that may exist for you and your business.
Direct links to City of Charlotte Projects, Mecklenburg Country Projects and the North Carolina Interactive Purchasing System are all available on this page. You’ll also find the contracting resources organized into the following categories: Opportunities, Resources and Vendor Registration. Click on each image to expand their profiles and learn more.

Training and Development



Keeping current with today business trends is the keystone to sustainability. Luckily, Charlotte has a number of resources available to help you position your business for long-term success. Browse the topics and pages below to get familiar with the partners that will help you to grow yourself and grow your business.
Choose between the two categories below (Legal Assistance and Local Resources) to further refine your search and help navigate the growth of your business. And don’t forget to check out the Calendar of Events for upcoming training, networking and other local business events!

Site Selection



Find the resources you need to locate and set up your business. There are many factors you need to consider before you choose the location for your business. From zoning to demographics, the resources below will help you find where your business will be at home.
On this page, you’ll find resources organized in the following categories: Avoiding Mistakes, Market & Demographic Data, Real Estate Search and Zoning. Choose from one of these topics to refine your search and to find more information about choosing the perfect location.

High Growth Entrepreneurship



The resources on this page provide technical expertise, counseling and capital to support Charlotte’s high-growth entrepreneurial culture. The ability to develop and execute an idea into a scalable commercially-viable venture is the hallmark of an entrepreneur, and Charlotte has just the right ecosystem to support this vital role.
On this page, you’ll first notice local organizations that offer regional efforts and resources for high growth entrepreneurship. These include Charlotte Regional Fund for Entrepreneurship (CRFE), a report featuring a map of Charlotte’s entrepreneurial ecosystem, and a report showcasing Charlotte’s strategy for high growth entrepreneurship.
Further down on the page, you’ll find even more resources for high growth entrepreneurship. Refine your search and find the resources you need by choosing from the following categories: Annual Events, Business Advisory & Incubation, Financial Resources and Training & Networking. From there, click on each image to expand and learn more about the local resources available to help your high-growth venture.

Exporting



On this page, you’ll find the resources you need for export assistance and financing. Exporting goods is a great way to expand your business and take part in the global economy. In fact, data has shown that companies that do business internationally grow faster and fail less often than companies that don’t.
The categories listed on this page include Export Assistance, Research & Statistics, Export Financing and Local Resources. To refine your search, select the category that best describes the help you need, and click on the images to expand and learn more about each resource.

Patents



The resources on this page will help you begin to understand everything you need to know about copyrights, patents and trademarks.
On this page, you’ll find various organizations and resources that can assist you with all of your patenting needs. Simply click on the images to expand and learn more about each.

Franchise



The resources on this page will give you insight into what you should consider before becoming a franchise owner. Want to back your business smarts with a brand name? Franchising might be right for you.
On this page, you’ll find a few of the best resources available in Charlotte to assist with all of your franchising needs. Click on each image to expand their profile and learn more.

Non-Profit Resources



Starting a non-profit? Non-profits are businesses, too Find everything you need to know about starting a non-profit and funding on this page. Charlotte offers a variety of resources that can help non-profits and social ventures alike be best positioned to reach their organizational goals.
This page is organized into the following three categories: Funding, Local Resources and Starting a Non-Profit. To refine your search, select the category that best describes your needs, and click on each image to learn more about the resources available to you.

Networking



On this page, check out the networking opportunities available through our partners, including business associations, contractor associations, and Chamber of Commerce events, as well as industry specific events. Networking is an essential skill for successful business people, and it will help you identify new revenue opportunities and potential strategic partnerships.
Not quite what you’re looking for? You can find more networking opportunities in the Charlotte Business Resources community; check out the Calendar of Events!
To refine your search, pick from one of the categories on this page, which include Business Associations, Chamber of Commerce, Contractor Opportunities and Industry Specific. From there, click on the images to learn more about each resource available to you.

Overcoming Obstacles



Find the resources you need for overcoming obstacles, from confidential and expert one-on-one business advising to human resource assistance and more. Business obstacles are inevitable and can take many forms.
Choose from the categories to refine your search and find the resources you need.

Traning and Development



On this page, you’ll find the training and development resources you need, including those for legal assistance. Charlotte has a number of resources available to help you position your business for long-term success.
The filterable topics on this page include Human Resources, One-On-One Business Advising and Online Resources. Click on the topic that best meets your needs, and explore the local resources available to your business.

Workforce



Find the employment and training services your business needs on this page, including services for financing, training and your workforce.
The topics featured on this page include Financial Incentives, Training Programs, Workforce Data and Workforce Services. To refine your search, click on the topic that best describes what you’re looking for. From there, take a moment to check out the resources available to you; be sure to click on their images to expand the profiles and learn more.

Environmental Sustainability



Going green can give your company a competitive advantage, improve your business efficiency and potentially lower operating costs. Explore the resources featured on this page to find everything you need to know about promoting environmental sustainability at work.
The topics featured on this page include Financial Programs & Incentives, Local Initiatives and Tools to Green Your Business. To refine your search, click on the topic that best describes your needs, and take a moment to browse the resources available to you. Click on the images of the resources that interest you to expand their profiles and learn more.

Exporting



On this page, you’ll find the resources you need for export assistance and financing. Exporting goods is a great way to expand your business and take part in the global economy. In fact, data has shown that companies that do business internationally grow faster and fail less often than companies that don’t.
The categories listed on this page include Export Assistance, Research & Statistics, Export Financing and Local Resources. To refine your search, select the category that best describes the help you need, and click on the images to expand and learn more about each resource.

Patents



The resources on this page will help you begin to understand everything you need to know about copyrights, patents and trademarks.
On this page, you’ll find various organizations and resources that can assist you with all of your patenting needs. Simply click on the images to expand and learn more about each.

Transitioning Ownership



Finding what you need when exiting your business is just as important as finding what you needed when you started. The resources on this page can guide you through the execution of your exit strategy.
The topics featured on this page include Legal Assistance, Local Resources and Resources on the Web. Click on the topic that best meets your needs, and discover all of the resources available to you. To learn more about each resource, be sure to click on each image to expand their profiles.

Networking



On this page, check out the networking opportunities available through our partners, including business associations, contractor associations, and Chamber of Commerce events, as well as industry specific events. Networking is an essential skill for successful business people, and it will help you identify new revenue opportunities and potential strategic partnerships.
Not quite what you’re looking for? You can find more networking opportunities in the Charlotte Business Resources community; check out the Calendar of Events!
To refine your search, pick from one of the categories on this page, which include Business Associations, Chamber of Commerce, Contractor Opportunities and Industry Specific. From there, click on the images to learn more about each resource available to you.

Certifications



Access the most valuable certification resources for your business on this page. Being certified in your trade can give you an unparalleled advantage when being considered for contracting opportunities. Don’t let your lack of certifications hinder your business growth.
If you’re looking for increased opportunities to do business with local, state and federal government; as well as, with major corporations, you should explore becoming certified by each applicable agency.
The resources on this page are organized into the two following categories: Government and Private Sector. Click on the category that best fits your needs, and click on each image to learn more.

Bonding



Find the resources you need that can help with your business bonding needs. On this page, you’ll find access to bond programs, as well as the resources you need to prepare for a bond. It is not uncommon for businesses, and particularly those in the construction field, to need some form of surety bond in order to receive government and other contracts.
The resources on this page are organized into two categories: Bond Programs and Preparing for a Bond. Click on the category that best fits your needs, and click on each image to learn more.

Bidding



The bidding resources on this page will help you understand the bidding process and put you on a path to throwing a compliant, competitive hat into any ring. Bidding on contracts can be an overwhelming process, so it’s best to be informed and do your research.
For more information on the local tools available to you, click on the topics on this page to expand their profiles and learn more.
