One of the first challenges most small business owners will face is how to raise the capital they need to make their vision a reality.
This is especially true for first-time business owners, or entrepreneurs who are trying to expand a business that started out as a side venture into a full-time affair. The world of business financing can be confusing, and the prospect of taking on debt or opening a line of credit can be anxiety-inducing if you are still in the early days of growing your company.
But no twenty-first century business can grow without external funding, so your question should not be whether to engage funding partners to expand or scale up your business, but how.
If you’re looking for ways to fund a small business, here are three approaches that can help you get the capital you need.
1. Find an Investment Partner
Finding an investment partner is one of the oldest ways to raise funds for business expansion. Typically, a small business owner or entrepreneur will offer partial ownership or a certain percentage of returns in exchange for start-up capital that can help get the business to the next level.
To attract an investment partner, you’ll need to provide detailed information about your company and the value it offers, and you will need to be able to demonstrate real capacity for growth. Fortunately, because this is such a common problem for new businesses, there is plenty of advice out there for entrepreneurs who want to know how to attract investors.
2. Get a Merchant Capital Advance
Not everyone will be able to find an investment partner, however, and not every entrepreneur wants to give away part of their business to do so. Fortunately, there are other ways of getting cash that don’t require you to go through the trouble of securing a bank loan.
A Merchant Capital Advance is designed to help companies that need a quick injection of capital. When you get a Merchant Capital Advance, you are basically purchasing a tranche of funding that will become available immediately, and which you will pay for in installments over a set period of time.
If you are looking for alternative funding providers who specialize in Merchant Capital Advances, Sharpshooterfunding.com can help you secure the money you need quickly and efficiently, and they provide plenty of information about the costs associated with applying for a Merchant Capital Advance on their website.
3. Raise Money from Friends and Family
Raising money through friends and family is often cited as one of the most common strategies for generating investment capital. And if your friends and family have the money and believe in your plan, it can be highly effective.
The only problem is that this approach can put a strain on your personal relationships, especially if the scale up doesn’t go as planned. And there can also be tax issues if proper care is not taken in reporting. But if both parties are willing and able to treat it purely as a business matter, this can prove to be an essential source of funding.
Growing a business is hard, and to do so you’re going to need to secure the financial support you need to expand.
The good news is, finding an investment partner, purchasing a Merchant Capital Advance, and borrowing from friends and family are all ways that many successful businesses broke out of the basement and established themselves as major players.
