It’s never an easy journey when trying to get your business to succeed. There are so many things to think about and funding is one of the most important factors. Managing your personal finances might seem easy compared to your business funding. For instance, you may apply for a no credit check loan to see you through an unexpected financial emergency. But when you need funding for your business, it can be a little harder to come by. To help, we’ve put together 5 top tips to help you fund your growing business. Keep reading to find out more…
- Business Credit Cards
If you don’t want a lump sum of cash, you might want to think about getting a business credit card. Just like a regular credit card, you have a limit of what you can spend and a minimum monthly repayment. But you should be able to borrow a lot more than if it was for personal use, making it great for any unexpected expenses. The beauty of a business credit card is that you can utilize it whenever you need it, and you don’t have to worry about getting yourself into a large amount of debt. As a growing business, you want to try and keep your outgoings to a minimum and a credit card will enable you to do so. Generally, credit cards also have lower monthly repayments too so you could end up saving money. Opting for a business credit card will mean you can spend as and when you need it, helping your business to grow with ease.
- Crowdfunding
If you’re still relatively new and growing, then you could attempt crowdfunding. This method of financing can work well for innovative companies that are demonstrating something new and exciting as it helps get the public involved in your development. When crowdfunding, you’ll set a financial goal that you wish to reach, and then ask members of the public to fund you. You could also offer a reward in return such as shares in the company or first pickings of new products. If you meet your goal, you then can have access to the funding you need without putting yourself into any debt. However, crowdfunding may not work for everyone as it can be a lot to ask of the general public if they don’t believe in your venture.
- Bank Loans
The most common method of business funding is a loan from a bank. As a business, you’ll be able to apply for a large sum of money than if it was a personal loan, so you can put the money to good use once received. As a growing business, there are specific loans that banks can offer that is targeted at businesses like yours. They may offer better interest rates and such which can really make a difference to your repayments. Although receiving a lump sum of money can be an excellent idea, it’s not always viable and your application could possibly be denied. If you’re lucky enough to receive such a loan, as a growing business there are so many things you could spend it on to help continue your success.
- Grants
If you don’t want to have a lot of debt in your business’s name, then you could take a look at business grants. These are often sums of money that are awarded to businesses and there’s no stipulation to pay it back. Most of these grants are also aimed at growing businesses so they’re definitely worth applying for. No matter what market you’re trying to break into, you can be sure that there’s a business grant out there. Grants are also an interesting way to shine a spotlight on your business and help make a name for yourself, which is exactly what a growing business needs. Again, while they’re a brilliant option, they aren’t guaranteed so you don’t want to pin all your hopes on them, only for them to be dashed. Some grants aren’t renewable either, so you may then have to source finance from elsewhere if it’s not enough.
- Equity Financing
If you don’t want to rely on the chance of getting a grant or get yourself into debt with loans, then you might want to consider equity financing. This type of financing is when investors offer you a sum of money for shares in your business, meaning you accrue no debt. However, as you’re handing over shares of your company to the investor, you will lose ownership and need to make decisions with the investor too. So, although it’s a great option for growing businesses as you’ll gain finance, and you can utilize their expert knowledge too, allowing your business to go from strength to strength.
Funding your growing business doesn’t have to be impossible, and there are lots of fantastic options out there to choose from. When it comes to deciding, it’s all about figuring out what your business needs and wants. For example, do you mind taking on debt, or would you rather lose some ownership and remain debt-free? These are the sorts of questions you should ask yourself and you’ll soon be able to find the right funding for you.
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