5 Business Funding Techniques
Business Bank Loan
One of the most obvious routes to small business funding is a business bank loan, however in the real world these can be difficult to be approved for unless you have collateral to speak of, or you are willing to put up personal guarantees to cover the debt if the business were to go out of business before the loan had been paid off.
A good strategy is to start with your own bank, your current bank will be in a good position to merit you for your good standing and trading history. Even if your bank offers you a favorable rate it pays not to over look other lenders.
Invoice Finance (Factoring)
Factoring is a way of raising quick finance at low cost. It is ideal for business with steady sales in a business to business industry. Factoring companies will provide business funding based on the value of your outstanding invoices. This can be beneficial if you operate with high margins to justify the fees associated.
Credit Cards/Overdraft
Credit cards are great for unexpected purchases and for expenses. For a new firm with low initial operational costs credit cards can be a viable option. There are many interest free rates available so it can be a simple and efficient source of business funding. A bank overdraft is another option, however this is an unstable form of finance as the bank can withdraw the overdraft facility at any time.
Leasing
Many business require funding for machinery or expensive equipment, in these cases leasing could be beneficial. Leasing spreads the cost of owning critical business equipment over a set length of time enabling the operation to grow pretty quickly.
Outside Investment/Equity Finance
Seeking business funding by releasing equity stakes in your business can be highly beneficial as outside investors, such as Business Angels can add expertise and knowledge to your business as well as the funding you need. This type of funding also carries less risk to your possessions as you will not typically be required to provide any personal guarantees to cover the funding required.
An effective method to attract investors to your business is to register with Edge Venture and record an elevator pitch, this will get your case for business funding in front of hundreds of potential investors.
Edge Venture is a simple, effective way to get attention from business angels looking for high growth business investment opportunities. Visit Edge Venture now to find out more.
- Simon Murray
:: Mar.25.2009 :: Uncategorized :: No Comments »
