This is a contributor’s blogpost …
Businesses need money to survive. It’s not just at the beginning that they need the cash to be successful. As a business grows and develops, it needs to keep the money coming in to get where it needs to be. However, that money can’t always come from the profits the company is making. A business will often need a little help from additional funding to reach certain goals. Deciding what type of funding is appropriate is important to keep your business’ finances healthy. Different types of funding can work well for different situations, and some might not be at all appropriate for your business.
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Many people will take out a business loan to get their business started. Most people will approach a bank, although some might try some other lenders who could give them a business loan. A business loan is a more traditional funding option, and they can often have good interest rates compared to other types of credit. However, it’s not always easy to get a loan, especially for a new business. You usually need to be able to demonstrate what you’re going to do with the loan and many banks will want to see a solid business plan. If you have an existing relationship with your bank as a business, you might find it easier to get a loan.
A credit card is another option to get funding for your business. Rather than use one to launch a business, you might use a credit card to help with cash flow or to grow your business. A credit card can be useful for bridging the gaps in your business’s finances. It’s a useful method of funding for smaller, regular amounts of spending. For example, you might decide to put your Google Adwords spending on a credit card. You could get a credit card with your bank or look at other providers. Your bank might pre-approve your business for a certain amount on a credit card.
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Cash Flow Funding
Sometimes you might have issues with cash flow, and looking for extra funding to fill the gaps can help you out. There are a few different funding methods that you might find useful, including accounts receivable financing. Also called factoring, this method of funding can help you out when your business is struggling with cash flow. Instead of having to wait for your invoices to be paid, you can sell them to a factoring service that will give you an advance. This helps you to unlock funds that you otherwise wouldn’t be able to access.
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Funding from Supporters
Getting funding from the people who love and support you is another possible idea. This could come in the form of money from friends and family, or contributions from your customers and fans. Crowdfunding has grown in popularity in recent years and can be an interesting choice if you’re launching a new product.
There are different types of business funding that can work for different situations. It’s important to consider your options to get the right one.