8 WAYS TO FINANCE YOUR BUSINESS TO EXPAND
To stabilize or flourish a business is one of the most essential goals set for a businessman no matter how enormous or a small business he is running.
But, in order to expand a business or to elevate its present value without seeking out other channels for financing—the possibilities of its expansion stability can become greatly doubtful. Planned finance or funding for your business acts as a support system that actually helps you to execute your new, innovative and growth-related plans and ideas smoothly.
Here are the 8 ways to finance your business to expand:
1. Taking Bank loans:
One of the most conventional and approachable steps to finance your business is loans—offered by banks.
Bank loans, however, can be a convenient source to finance your business as you can opt from variable choices of funding being offered by banks to run business operations according to your requirement and convenience. Bank loans often have lower interest rates and can be the most accommodating source to get it for your business if you are their old costumer.
However, seeking loans for your business is not always as easy as you think. Loans applications often get rejected depending on their requirements but that could also be included in the years of your overall experience aims or potential of your business.
2. Asking a special acquaintance:
By getting your trusted friends, family members or colleagues help to invest in your business is one of the most preferable options in order to fund your business.
Because approaching the people near you is much easier since such people know you personally and can help you better more than approaching the banks who sometimes can refuse to invest in your business. For family or friends the chances of interest while you repay your loan are also much lower, also there is possible flexibility in the methods and terms of repayment.
But before presenting your idea of your business expansion to the possible financer with whom you have personal or professional relationships with, you have to form a proper method for the repayment beforehand to get him in confidence—it is highly recommended to infer from borrowing funds or money from friends, family or colleagues informally.
Moreover, do not hesitate to present your plans in front of them including risks and benefits.
3. Finding an angel investor:
When you are thinking abouthow to get small business funding, find an angel investor is also one of the most reliable and convenient sources to seek finance from—especially if you aim to expand your business to a much greater level.
Angel investors can either be a single person possessing wealth or a group of people who can provide you finance for your business also depending on the potential of your business and the target you aim to achieve through the invested amount. Though Angel investors most preferably invest with an expectation of higher return they are more approachable than bank loans and the certainty of their investment is also much higher than banks
There are several ways to find angel investors and why it is most recommended for your small business.
5. Self-investing your business:
Self-financing also known as “bootstrapping” this way to finance your business demands you to aid your own business by your own saved money or assets.
Especially if you are running a small business and looking forward to expanding it, without seeking loans from other sources, the best way to finance your business is your own money. In this way, you don’t have to worry about the repayments and installments you would have to pay to the banks or other firms you choose to get your investment from.
Also, this is one of the most reliable sources to grow your business. The exception is if you aim to develop your business to a greater level in a rapid speed despite that the higher risk chances, then you should consider outer sources to fund your business.
6. Crowdfunding:
For your business expansion, crowdfunding is also a considerable option as it allows you to raise funds for your business. However, where seeking finance is beneficial for increasing your business is equally important for you by knowing and understand the requirements of your business.
You need to consider your own strategies to form a campaign in order to attract micro-investors that would help you to raise funds for your business and help to campaign for your ideas through their sources if you motivate and attract them with your appealing ideas. It is also one of the more convenient way to accommodate your business financially than getting involved into more formal process of bank loans and other firms.
7. Attaining a Business Grant:
To finance your business for expanding can be done by attaining a grant being offered by the government or any organization, also one of the most important sources.
Because, once you receive such grants for your business, you don’t have to worry as they do not demand to get repaid—other than using your business as a source of promotion for the offering government or business grant schemes.
These grants also support small businesses. But, to achieve such grants for your business, your credibility and the ideas you want to execute through these funds must meet all the required criteria for the application.
8. Reaching the Microloans:
Attaining the microloans through non-profit organizations for small business is also a less complicated and less documented source, receiving loans for your business growth with a comparatively less interest rate.
But these lenders offer a small number of loans, which means you would not have to repay a huge amount of money back to the providers. You can consider this option if your required amount matches the range of loans these lenders offer.
Conclusion
There are many sources to finance your business to expand, but before considering any option or any source you must be well aware of your business, its aims and its requirements, your own financial condition, the location your or area of your business. Also, the kind of business you are seeking funding for and the most suitable kind of investment you are looking for.