Starting a business is fairly easy. However, getting any business off the ground can be a daunting task. Besides, funds are required for the expansion of any business and unfortunately, not many entrepreneurs have the cash they need to expand at hand. However, the entrepreneur is lucky as there are many options for acquiring funds. Read on to find out which tactics for acquiring funds for your ongoing business we think are the smartest.
Try Invoice Factoring
If you are a growing business that is just starting to see a boom in sales but has no funds to process incoming orders, invoice factoring might be the best option for you. Invoice factoring refers to the process of selling unpaid receivables to a factoring company. This means that the customers will pay to the factoring company. Selling invoices gives you quick access to funds to process incoming orders and avoid losing customers.
Get a Small Business Loan
Another smart way to access funding for your small business is taking a small business loan. Accessing a small business loan is as easy as typing the words on the internet. You will get a plethora of results for lenders that offer such loans. However, when choosing the best small business loans lender, ensure that you check the leniency of the requirements.
Consider Purchase Order Financing
This is a viable funding option for ongoing businesses. It entails forwarding your purchase orders to a financing company who will then pay your suppliers on your behalf so that you can deliver to your customers.
If your business needs costly equipment to complete tasks and start making cash inflows, equipment financing is the choice for you. It includes a financing company giving you a loan to finance the equipment. Your business will then repay the loan in instalments.
Go for Merchant Cash Advance
A merchant cash advance allows you to access a large sum of funds based on your credit card receipts’ value. This is a fast way of accessing cash to continue running your business because all you have to do is provide your credit card volumes.
Use a Line of Credit
A line of credit works the same way as a credit card. It allows you to use the money on the line of credit and only pay interest for money used. Additionally, if the balance is paid on time, you can use the line of credit over and over again. Also, you get to benefit from lower interest rates if you pay early.
If you are willing to share your company’s rights, venture capital is a great option. It is especially beneficial for businesses in their early stages. The investors provide funds to run the business in exchange for business rights.
If used responsibly, your credit card can move your business up from stagnation to growth. All you have to do is ensure that you make timely payments.
Use your 401 (K)
If worst gets to worst, you can always use your 401 (K) benefits to fund your business. However, you need to be sure that this is the right move and get an expert to guide you through the process.
Your family and friends can help you set up a site to pledge money. This helps you raise money in a cost-effective way. But, entrepreneurs should note that this is only a one-off solution.