A great way to get in the door with some alternative financing institutions is to take out secured cards. The concept is the same as any other secured credit card. A secured credit card requires a specific amount down, securing liquidity, in exchange for a revolving line of credit. Spending is treated just like any other business credit card. The initial deposit made on the account is not used to pay the balance unless defaulted on the payments. The payment is tracked and, after longevity of the account, other lending options become a possibility. 

            Secured credit cards are not a form of alternative financing but are included in this chapter to remind the small business owner that long-term planning is needed to keep financing options open.

PEER-TO-PEER LENDING

            Peer-to-Peer Small Business Lending is a system used to connect a private lender and small business owner. The borrower posts the details of the business loan he or she is requesting at sites like prosper.com and our own site at www.strongbusinesscredit.com. Emerging sites like these give business owners the ability to customize their own loan options including the amount, term, and maximum preferred interest rate. Private loan lenders have the option to bid on the small business loan, and the best offer(s) will be accepted. The key to handling the risk factor is in the social aspect underlying this type of lending. The borrower’s payment habits are made public information on networking sites, available to one’s peers. This encourages the borrower to honor their obligation and can be damaging to their business image and brand if they do not.