Undoubtedly, the business landscape has evolved dramatically over the years.
Nowadays, resourcefulness and out-of-the-box thinking are crucial if you want to get ahead. The same traits are also necessary when it comes to finding the right funding alternatives for your venture.
If you are in the lookout for financing ideas for your business, below are some of the best options available at your disposal.
If you need an additional amount you can use alongside funding you have gotten from other sources, a micro loan would be ideal. In most cases, micro loans are used as start-up cash and are often given to small businesses as working capital.
Many entrepreneurs however use their micro loan for numerous other purposes like purchasing fixtures, furniture, equipment, and supplies. Others on the other hand sometimes use the money to purchase another business.
With generous repayment terms that can often range from one to five years, you can never go wrong with micro loans.
If you get the approval of a business angel, you’ll likely get access to investment in exchange for an equity stake. Oftentimes, angel investors are seasoned entrepreneurs themselves so they can relate to what you are going through as they have most likely been there themselves at one point or another.
Fortunately, enticing an angel investor is not actually as daunting as it seems. There are companies that can give you recommendations on how to perfect your pitch and help you get in touch with hundreds of angel investors.
If you are willing to give up a share of your business and you can come up with a robust pitch with promising growth projections, then this route would be perfect for you.
Simply put, crowdfunding can be likened to a charity sponsorship. People come together to help fund an idea or a venture they support and believe in.
In most cases, investors or donors on crowdfunding sites are private individuals contributing a small amount on a concept they believe has a potential to make it big. And since no significant amount is involved, donors will often not demand rigorous conditions or conduct thorough grilling like angel investors would.
Apart from getting you the financial assistance you need, crowdfunding can also help get your idea out there. Now, that’s some word-of-mouth marketing you can’t pass out on.
Once you have chosen the funding option you want, you can hasten the process of getting that financing your business needs by keeping in mind the following tips.
- Examine your current credit report. Obtain a copy of your credit report so you can check if the figures are accurate. This is imperative as most financial institutions and prospective lenders will most likely review your credit report before they would approve any loans.
- Prepare a projection of future operations. To effortlessly entice a prospective lender, it will be a good idea to keep your projection of future operations handy. It should cover a year of projection or up until such time when you can achieve positive cash flow.Ensure you adhere to industry standards when projecting your profit and losses. If you are unsure as to how to go about it, this task will be a good excuse to hone your research skills. The Internet should be a good place to start your search. Type in “12 month profit and loss projection” and you’ll get many options to pick from.
- Prepare your financial statements. Understandably, any lender would want to be certain you’ll have the means to repay any money lent to you.With that in mind, always get your balance sheets, reconciliation of net worth, and other financial statements handy. Also make sure all your financial statements are not more than 90 days old.
You might also need to prepare a breakdown of your accounts payable and receivables, in case you will need to present it.
Getting funding for your business can seem like an overwhelming task. However, nothing can be farther from the truth. With numerous options for you to pick from nowadays, it won’t be long until you find the best financing alternative that will help you get your business off the ground.