Your sales have proven to be following a steady trajectory, and you see big things for your business in the not-so-distant future. But the excitement can give way to trepidation when you start to think about how to fund this next leap. Continuing to grow will require more personnel, inventory, space and resources. So where can you turn to afford all this? Here are a few options to consider when you’re in need of more cash.
Angel Investment
Even though venture capital is technically an option for all businesses, it’s not one in which small businesses usually find much success. Instead of getting your heart set on being funded by a credible VC firm, be realistic that this is rarely a feasible or optimal path for a small business.
A better option is finding an angel investor. This person can be from any walk of life, as long as he or she is wealthy and willing to part with some cash in exchange for a piece of the business. The downside is that you do have to be amenable to handing some of the company over, but sometimes it’s more beneficial to have a smaller part of something big than a big part of something small.
Crowdfunding
The concept of getting a project funded through asking a large pool of individuals for nominal amounts of money has gained steam in the last few years, thanks to websites like IndieGoGo and Kickstarter. When it comes to business funding, this has also become a real option. Sites like Fundable offer a way to raise money specifically for your small business. If you’re looking to get enough money to get you through the next cash flow hump, crowdfunding may not be out of the question. A good place to learn more about how this works is on the Small Business Administration’s website.
The main thing to remember with this method is that it’s not guaranteed. You may raise more than enough of the capital you’re seeking, or you could fail to raise any of it. This option is best for businesses that could use the extra funds but can also survive without them.
Small Business Loans
One age-old method for taking a business to the next level is through small business loans. While this approach has become less available than it used to be and layered with some new regulations, it still can offer a way to get the money you need without sacrificing any percentage of your business. Banks are no longer the only place you can go for small business loans, either, so research all your options.
Put Your Creativity to Work
The prior three funding methods are likely nothing you haven’t heard about at some point. If you’re in need of cash and feel like those three don’t suit your goals, don’t despair. A little creativity can go a long way in getting the financing you need. Think about things like having a presale, taking out a home equity loan or requiring deposits on large orders of your products. Through these ways, you may be able to land just enough dough to get you through the next payroll or pay this month’s utility bill.
Sometimes a little push through a cash flow hurdle is all you need. If you receive regular payouts from a structured settlement, you may be able to sell your future payments for a lump sum of cash now. These funds can help give you the momentum you need to grow. The point is, you don’t always have to be beholden to traditional funding methods.
So if your business is ready to go to the next stage, be sure you look into all the options available for financing. The way that worked best for your brother-in-law’s company or your competitor may not be the best way for you to go. Do your due diligence and don’t forget to be creative. You never know what untapped avenue might bring you the cash you need.
