Whether you’re starting up a new business, or looking to expand, at some point you will need to raise some capital. You need to invest to grow and to see returns, but finding the capital isn’t always easy. There are plenty of ways to raise capital though, you just have to work out which way, or combination of ways, best suit your needs. Is it a quick fix you are needing? Or something a bit more long term? How much capital do you need? There are traditional ways and more modern ways, thanks to the rise of the internet. Here are just five ways that you can raise capital for your business.
1. Look to Yourself
While this is not always possible for some, it is often a good place to start finding some funding for your business by looking what you, yourself, have available. Though this is not suitable for businesses that require a large injection of cash, such as manufacturing, for smaller ventures you may be able to find the money yourself.
It may also take some time, but putting some money aside especially for your business is a good idea. Don’t use your entire savings, but if you have an achievable figure that you can raise yourself from the simple act of saving, then it is a great way to fund your business. If you invest in your business, it also looks good for when the time comes to pitch for serious investment. If you have funded it yourself, you must believe in what you are doing.
Be aware though, this does come with risks, as once spent you can’t get the money back if it goes wrong. But sometimes, the potential pay-offs are worth the risks.
2. Use A Business Credit Card
If you need a quick fix, getting a business credit card can be a great way to gain quick access to some much needed funding. Though you need to be able to pay back the cash within the required time frame.
Look for a 0% or low interest APR business credit card to minimise the amount that this costs you overall. Another plus point is the amount of benefits that come with business credit cards, such as the rewards you can get.
3. Ask Around
Another place you could get some funding is from your friends and family, although this does come with risks. Only ask those you are comfortable asking and ensure you set out how and when you will pay them back; you don’t want it to come between you.
That being said, most people are pleasantly surprised by the amount of family and friends that will be willing to lend you some money. Quite often they will lend you some capital with no interest too.
However, this has similar issues to funding yourself; as it is unlikely you’ll be able to raise large amounts this way. But if you only need a small amount, or a quick fix, this can be an easy, cheap way to raise funds for your business.
4. Take Out A Loan
Applying for a loan is one of the more traditional ways to fund your business, but still a popular way to raise capital. There are various types of business loans; secured, unsecured and cash advances for example.
As long as you have a good credit history and can accurately forecast your finances, it should be relatively easy to take out a business loan. Depending on the loan, you may also have to meet other requirements, but there are plenty of lenders out there so one should suit your needs.
Crowdfunding can be a great way to raise funds for a business, especially if your business relies on a product that you are going to sell. With the right product and pitch, you can raise a lot of capital. It also means that your product gets in front of customers before it is finished, so you can get feedback along the way and improve.
Some crowdfunding websites will allow anyone to invest, whereas others only put you in front of investors. Either way, your pitch needs a good story; what need your product addresses; why you need support and the value of the product all should be part of the pitch. But if done correctly, and promoted well, you can raise a lot of capital from this source.
If you’re looking for help raising money for your business, check out our funding solutions here.