How To Fund Business Growth
/
If your small business is doing well, you might be thinking about how best to expand from where you are. Whether you want to open a second site, expand your product range with private label products for small business, or take on more staff, expansion can be pricey but can be worth the investment. If you’re ready to grow, but aren’t sure how to finance this growth, try some of these ideas.
Look for specialist financing. There are companies out there that offer finance options for specific industries, such as medical finance companies that will lend money to medical professionals to expand. This sort of funding can be used towards expansion or new office space to help you improve.
Get a loan through the bank. There are plenty of loans available to business owners. Most business owners know about the loans available to get their business started but don’t always think of this kind of option when they’re trying to expand. If your finances are in good order, a loan could be a smart way to find the money to help you.
S out angel investment or venture capital. Angel investors are people who invest in new or growing businesses, generally in exchange for capital. This money can be very important for a business that is stuck at a smaller size and needs assistance to expand. Just make sure you’re happy to offer capital or shares in your business. To secure this kind of funding, you will need to have a strong business plan to show how you plan to achieve the growth you’re aiming for.
Explore crowd-funding. Crowd-funding can be very successful for business with a loyal customer base. Businesses like BrewDog have raised millions to help them to grow their businesses. Crowd-funding works by offering incentives and rewards to the public who buy into different levels of support. You could offer everything from free merchandise to shares in the company.
Apply for a government grant. Some governments and other organizations offer grants and other options for finance that won’t leave you with debts to pay afterward. Most grants are intended for new business, rather than established ones, but there are some options out there if you keep looking.
Ask friends and family for loans. Shorter-term loans from family and friends are simpler to manage, as there’s no bank to deal with, no complicated terms to meet, and usually lower rates of interest. If you do choose this option, make sure you legally lay out the terms of the loan, especially when agreeing on the terms of repayment. This reduces the risk of causing arguments later on if one of you feels the other is taking advantage.
Use your overdraft. If your bank has a generous overdraft option, then this can be a potential option for short-term borrowing. Just be aware that an overdraft can come with large interest fees, so it could end up costing you more cash in the long-run. This is a better option for smaller amounts of money, for example, to fund marketing campaigns, but is a poor choice for larger amounts for expanding to a second site.