A business will always need more capital, no matter how long it has been running. Expansion is one of the simplest ways of increasing your bottom line. There are always ways to utilize the funds in order to raise more funds for expansion. It is therefore wise to establish what kind of financing that your business really needs to move on to the next level.
ASK FOR A LOAN
Though asking for a loan is one of the oldest and most common way of raising money to finance businesses it is also one of the easier ways of financing and it is worth a try. This type of financing requires collateral for you to be able to access the funds. You also have to have a great track record with the bank and also a reliable guarantor who will ensure that he would pay the loan if at any cost you are unable to pay. There are also other options beyond banks of course, like if you are looking for a property development loan there are companies who can help you directly.
BUSINESS PARTNER
Sometimes you may have a compelling business idea but lack funds to turn the idea into a reality. While still being in such a position you may still know someone who has the funds and is willing to invest as a business partner. You must stipulate rules that are in the interest of the business in case the partner opts out. Also negotiate your own financing terms with tenacity like this retail packaging business did even if all you may have is a vision for the future, someday it may be worth a fortune.
GO TO ANGEL INVESTORS
Most entrepreneurs seek to invest back into a business after they have become successful. This is what is referred to as angel financing. The benefits of angel financing go beyond just the figures but ideas, connections and valuable advice you receive from an angel investor goes a long way into helping you achieve success in your investment. Most angel investors have been in the field for a long time and have had experiences that will be of great use to you. They will help you avoid the mistakes they made and help you make wiser decisions than they made. Some of the world’s most popular businesses such as Skype, Google, Facebook and twitter have been born out of angel investors.
VENTURE CAPITAL
Venture capitalists aim to invest in the startup process of a promising business. In the past they required equity in a business in exchange for funding it. Today, however, they demand a mixture of equity and debt financing.
CROWD FUNDING
Though crowd funding is not a common method of raising funds it is fast gaining popularity. In this form of financing you receive funds from the public who give you money straight from their pockets. You first propose the idea and people decide how much they should give you. Mostly what is needed from you in turn is to give for free the service or product to the people who funded you. Soon some laws may be put in place to ensure that the people who funded the business will receive some form of equity from the business they funded.