Whether you already own a company and have a brilliant concept for growing it or you have a vision for starting your own business, the fact is that nearly every entrepreneur needs to figure out how to get financing for a business and scrape together some cash at some point.
Fortunately, you're in luck. You have a lot of great options.
1. Traditional Business Loan
Sometimes tried and true is your best bet: When you look at how to get financing for a business, traditional loans can be a great solution. If you have all your paperwork ducks in a row and have a decent credit rating, a traditional loan might be the way to go.
The chief benefit of traditional loans is they typically cost the least over the life of the loan. The drawback is they can be difficult to qualify for and might require collateral to secure.
This sort of loan can take some time to process, so you won't be able to count on getting funding for your business right away. You'll need to provide the bank with all of your licensing and registration documents, as well as your business plan, tax returns and financial statements, in addition to any other documents required by your lending institution.
2. Business Credit Card
Depending on your funding needs, a simple business credit card may suffice. You charge what you need to grow your business—while accumulating rewards—and you find payment terms that suit your needs.
While credit cards might charge annual fees or incur higher interest rates, you can't beat them for flexibility and access to funds.
3. Alternative Lenders
When you're looking to get funding for your business, consider this big and growing category.
...Crowdfunding is a disruptive opportunity that really has provided lots of savvy entrepreneurs with the chance to get financing for a business of their dreams, all without going into debt.
You can get business loans from your credit card company and from a variety of online lenders, but know that they come with a wide range of payment terms and interest charges. That said, one of the benefits of using these alternative sources is that you can get financing for your business much more quickly than traditional lending sources.
4. Increased Sales
It's commonplace to think about ways to borrow money and do it as quickly as possible, but there are alternatives! One strategy many business owners overlook is to finance new ventures with money earned, rather than borrowed.
Say you've got a dynamite concept for expansion, but you don't want to incur debt. If you can boost sales and save up that increased revenue, you'll be able to tackle your new projects debt free.
Whether you offer a one-time discount that brings in lots of new shoppers or you double up your marketing efforts, focusing on increasing your sales can be the secret to future success. Of course, this strategy for how to get funding a business only works if you already have a business.
Anytime I hear about a new idea that has broad appeal, I think about the power of crowdfunding. With the right campaign, you can raise money to create your brilliant new product, and all you'll owe are the rewards you've promised your backers when production is complete.
You may need to invest a little in writing and producing a compelling video pitch, but crowdfunding is a disruptive opportunity that really has provided lots of savvy entrepreneurs with the chance to get financing for a business of their dreams, all without going into debt.
6. Prepaid Services
A lot of business centers around who owes what money when. For example, if you sell products, frequently you buy on credit from your vendors and need to sell a certain portion of your inventory to pay in a timely fashion.
When you're selling services, there's an opportunity to create a prepaid service option for your customers. You can sell a yearly or quarterly subscription for which you get funds up front and your customers can avail themselves of your services as needed. With that up-front money, you can invest in whatever business ideas you needed to get funding for.
You need money to grow your business, and there are a host of great options that can suit a variety of businesses and needs. Researching how to get financing for a business may feel like a daunting task, but it's vital and can be less painful than you might think!
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