If a business owner required financial capital a hundred years ago, he/she would have no other choice but to go to a bank. All of that has changed in a few short decades after the dawn of the age of information due to the internet. That is the main reason why today, business owners have multiple sources of finance for a business. The options include crowd funding, credit unions, and even Merchant Cash Advance.

Banks are not just the only financing method though, but they are not even the best ones. So, what are the best sources of finance for a business today anyway? Let us find out by comparing all of the above methods to understand which method is the best one for obtaining working capital for a business owner to expand his/her business.

But before we get into that, let us understand a few shortcomings found in traditional banking institutions:

  1.    An old bureaucratic system that makes the whole process slow and frustrating.
  2.    Banks need to have restrictions on the usage of money.
  3.    Banks disregard to the business owner’s demands and a non-business like dealing system.
  4.    Their reliance of asking for collateral and rejecting businesses with bad credit history.

Now let us take a look at other sources of finance for a business and see which one turns out to be the best overall.

Crowd funding

Crowdfunding is a relatively new ways of attaining financing capital for any business. It does have a potential of becoming the biggest financing institution for just about anything, but that is still very much in the future. Its advantages allow business owners to derive their working capital from a large pool of crowd investors. But it comes with a few disadvantages:

  1.    The business owner has to drive his/her PR campaign to find support.
  2.    The time to reach the capital goal can be anywhere from a few months to a few years.

Credit Unions

Credit Unions are one of the best sources of finance for a business as they are a completely democratic system, unlike banks’ corporate oligarchy system. The biggest advantage of working with them is that all members are treated equally and are given the equal share of profits. And so business owners can find great deals on business loans according to their needs.

But they are closed groups who require an introduction from an existing member and also come with various restrictions.

Merchant Cash Advance

Merchant Cash Advance is one of the most expanding sources of finance for a business since they are specially designed to suit business owners. They come with no restrictions and allow business owners to negotiate on their terms with their lenders. They do not ask for any collateral or even find bad credit history a problem.

They use innovative repayment methods like ACH withholding that allows financiers to get automatic access to a portion of the business owner’s earnings. The only problem is the high-interest rate but that is overshadowed with the many perks it provides.

That being said, Merchant Cash Advance is the best source of obtaining finance for any business.