All businesses hit a wall at some point in their lifespan. And, the only way to break through these walls and grow is by finding the money to do it. Some people are lucky and can draw on personal wealth, but for the vast majority, it’s a different story. You need to find financing for your business goals, and there are no guarantees. But where do you find this money? In today’s guide, we’re going to reveal some of the easiest ways to get what you need. Let’s get started right away.
Image Credit Ken Teegardin
Friends and family
One of the cheapest and best ways of financing business growth is by borrowing from a family member or a friend. You might think this will be a difficult conversation to hold – until you think about it carefully. Your family and friends are likely to be keeping savings aside in a standard savings account. As everyone knows, interest rates are currently next to nothing. Even the best savings accounts on the market are offering pitiful returns. On the other hand, loans from the bank are still going to cost you a pretty penny. It makes sense to offer a friend or family member a higher rate of interest than they are getting right now, which still undercuts the cost of a bank loan. You get the money you need, while they get a higher rate of interest than they were getting on their savings.
The right bank
The past few years have been tough for businesses looking for a bank loan to fund their growth. However, things are starting to look up. According to recent reports, loan approval rates are on the rise for the first time in many years. But, it’s only from individual banks – so you will need to shop around. The reports suggest that it’s the bigger banks that are starting to lend more to businesses. Smaller, independent banks are still keeping their belts tight – and some are even offering fewer loans. So, if you want to improve your chances of loan acceptance, the shrewd move right now is to go to a major bank.
If you still get a negative response from the banks, the best option is finding a private investor. You could try crowdfunding, which is picking up lots of small investments from a large group of people. Or, you can try and find a private equity firm who will pay you some money for a chunk of your business equity. Yes, you will be giving up a lot of control over the direction you want to take. But, the truth is, without those funds, you won’t have a chance of breaking through the wall stopping your growth. The good news is that many investors out there are currently taking their money from hedge funds and putting them into equity firms instead. Play your cards right and put a strong business case across, and you might be able to catch this particularly wave.
So, there you have it – the three best ways to get financing right now. Good luck!