Finding funding for your business can be challenging, but with a bit of work and planning, you can find the money you need to help your company grow. Many small and medium sized businesses are held back by lack of money. Here are some ideas to help you secure funding for your business.
If your business has outgrown the money you started with, your source of new funds will be bank loans, alternative lenders, and venture capital.
How to get a loan
To get a loan, you will need to have a business plan. The best companies are unique and servicing niche markets that legacy companies overlook. Also, starting a business that will be the only type in the area you want to set up shop in can be very successful. Funders want to know that they’ll get their money back after they finance your business. Therefore, you must be able to show in your business plan how you will be able to pay them back. You must be realistic as you write your plan. Every business faces competition and challenges, your plan should show how you will deal with them successfully.
Finding your financing
When you have your business plan ready, it’s time to start looking for funders. You can start with your local banks, maybe one that specializes in in SBA lending. The SBA is a good option if your business is new. Still many banks maintain a policy of requiring a company to have two years of profitable history. Another source of small business funding can be alternative lenders. Factoring companies, leasing and online lenders all offer financing to companies that may have been turned down for a bank loan.
These alternative lenders usually focus on your assets for repayment. In the case of factoring companies, they are most interested in the credit strength of your customers since they are buying your invoices. They can be a good choice for business owners who have damaged their personal credit by using their personal credit to fund their business.
Consider crowdfunding and venture capital
Another option is crowdfunding. With crowdfunding, you don’t need to write a full business plan. You also don’t need to meet specific qualifications. You will have to offer incentives to funders based on how much they contribute.
To solicit venture capital, keep in mind that you will have to give up some equity. And depending on the size of the investment, you might have to give up control. You will want to work with experienced fund raisers if you pursue venture capital.
Finding funding for your business takes time and preparation. With a bit of planning and work you can find the money you need to keep your business growing. For over 40 years, American Receivable, has helped small businesses to get the funding and cash flow that they need. To receive your free quote call 1-800-297-6652 or complete our quick online application form.