As many small business owners know, the first years of trading and setting up your small business can be exceptionally difficult. In almost every industry and commerce sector, competition is intense, with the rise of e-commerce effectively opening up international trade for both businesses and consumers. Today, a consumer can choose to purchase goods and services from a company located outside their company, and they often will if the goods can be delivered in a reasonable timeframe for a competitive price. This means that small businesses will need to compete internationally in many instances. In addition, small businesses need access to finance sources to create, build and grow their operations. In this article, three ways to raise finance for your small business will be explored in detail. Each solution may benefit different businesses depending on their type of operation or how they wish to seek finance.
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Consider cash loans
Securing a cash loan can be the ideal way to raise finance quickly when there are no other short-term options at your disposal. This can be beneficial if you need a quick cash injection into your firm to enable the purchase of raw materials or stock. Today, many finance providers specialize in short-term cash loans, such as MiFinance which may also be able to offer a same-day pay-out if the necessary financial information is provided in a timely manner. Cash loans can be an extremely convenient way to raise finance quickly. Still, their main downside is that they tend to have higher rates of interest charged than other forms of finance that may take longer to secure. In short, cash loans can be suitable to help with short-term cash flow problems. Still,shopping around and finding a provider with the lowest interest rates is beneficial.
Crowdfunding is a relatively new way for businesses to raise finance, and it has grown in popularity in recent years. Put simply. It works when a business puts an idea for a new product or service online and invites people to help raise the finance for the project by offering business equity or other rewards for investors. It can be a suitable way for businesses to raise money when they are in the start-up phase of operations or are looking to introduce a new product to the marketplace. By promoting online on social media channels or putting your business idea on dedicated crowdfunding platforms, you can secure quick investments from a large number of interested parties.
As a final example of ways to raise finance, it can be valuable to consider approaching angel investors for assistance. These types of investors are typically business people who have already amassed considerable personal fortunes and are looking to help out other small businesses achieve success by providing their capital. Popular TV shows such as “Dragons Den” feature a panel of angel investors and business people who are able to assist businesses in raising finance. Typically they will ask the business for a percentage of their company in return for the investment. To secure an angel investor, it is imperative that you have a viable product or business idea and can demonstrate that the company will generate suitable returns over the early years of trading.