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Business financing made easy

How can Business Funding Help You?

Are you a new entrepreneur looking for the right funding solution for your business? Are you already seasoned in your business and searching for options to increase your business capital? Are you overwhelmed with all the possibilities coming across your way and do not know which one to choose? You are not alone! Many seasoned business owners are confused when it comes to finding the right funding solution for their business. Whether it’s your first business venture, or you’ve run your business successfully for years, it is always essential to keep updated with the different business funding options open to you. After all, nobody can anticipate the need for urgent cash to jump into an exciting, more significant opportunity or simply cover expenses.

Obviously, funding is an essential aspect to starting a business. You need capital to establish, and to run your business. You may be one of those many business owners who started their company with personal savings or a small loan. However, now that you have some experience running your business successfully, the thought finding more funding for expansion can be an issue. You must plan adequately before jumping into expansion.

Let's now delve into each situation to understand your business's requirements and how you can venture into business funding successfully.

Reasons you may need business funding

  • Combating the slow periods

In an ideal world, your business is supposed to run smoothly all the time. However, there can be moments when sales slow, or you have a sudden, inconvenient, expensive repair to make on some equipment. Such situations can quickly decrease your cash reserves and make you feel uneasy about your business's future.

  • Seasonal slow periods: Businesses face a lot of busy seasons and slow seasons alike. Some businesses, like resort towns, restaurants, and lawn care companies, have their season. So if you are among owners who have a seasonal business, you are aware of the importance of building cash reserves for a slower season. However, at times despite your best efforts, the reserves aren't enough to get you going through the busy season. Having a suitable funding option in reserve will undoubtedly help in such slow periods.

  • Unexpected repairs: Your business is set up on technology and equipment, often many types to deal with different aspects of your operation. If a piece of necessary equipment suddenly breaks down, you can be left in quite a tough spot. This is when business funding, such as equipment leasing, will help you quickly to replace the broken equipment without cutting from your savings.

  • Covering for unpaid accounts: Few business factors can be as frustrating as waiting for an outstanding invoice to be paid. A little bad timing can leave you in a cash crunch and make it challenging to meet the daily expenses while waiting for the payments. This is when business funding can come in as a stopgap for such times.

Being in such a slow period can be extremely difficult if you do not know where to find help. Fortunately, there are a few options that can help you in combating these slow periods and help you get your cash flow back on track. This is where you can turn to these lines of credit, business loans and such other small business funding solutions to help you get adequate working capital required to keep your business running.

  • Growing your business

Small business funding is essential when the business is booming, as it is when slow. If you are looking forward to having a growth plan for your business within the next few months or even in years to come, a secure funding option should be an essential element towards the same.

Taking your business to the next level without any funding option will be extremely difficult. Meeting the increased demand, hiring new employees and investing in the new market perspectives and advertising campaigns will be expensive. Without a proper business funding solution, you will never be able to achieve your dreams. You need to give yourself the chance to succeed in growing your business by understanding the financing options well. This will help you to:

  • Manage your employee needs: With your business's growth, you will have to formulate ideas and change the way of managing your employees. It would also include hiring the right employees and investing in the current workforce to retain the most significant staff.

  • Expansion to a new location: Whether you are looking forward to moving to a bigger and better space or have a second opening in a new place, the extension is an expensive proposition. If you have a ready funding solution, then you can score the perfect location as soon as it is available for sale or rent.

  • Increasing the inventory: With increasing sales, it often means that you will have to stock up your inventory with your most popular products. This would mean that you will have to take on more inventory than you used to before. Having a proper funding solution becomes critical to for purchasing inventory.

Who can help you with small business funding?

There are many ways to get adequate funds for your business requirements, including taking loans from lenders or seeking more prominent investors. Different funding channels will have different kinds of
requirement for receiving and paying back the funds. Before selecting any such agency, you need to be sure of their requirements so that you can easily compare their pros and cons. Understanding who can help you with your funding requirements and what their criteria are is essential to you making an informed decision while trying to raise your capital.

  • Traditional lenders: These lenders provide loans as a business financing option. These lenders will give you straightforward terms and prove to be a good source of funds, too, if you meet their approval criteria.

  • Alternative lenders: They are similar to traditional lenders and offer loans and other financing options. However, unlike conventional lenders, these lenders will have less stringent requirements while funding a small business, which increases your chance of getting approval even if you are a business owner with bad credit, or a loan history.

  • Small business administration: These lenders can provide you with a customized loan program. Through an SBI loan program, you can quickly get a regular loan from a private lender who will partially be guaranteed by an SBA agent. This guarantee ensures that your lender receives the sum of the agreed loan even if you cannot pay it back. However, this program's requirements are quite stringent and it’s not possible for every business owner to get approved.

  • Business grants: Business grants work like loans. However, you do not have to pay the money back, as these grants are funded by non-profit research institutions and government centers. Securing them might be extremely difficult and competitive as strict application requirements are needed.

  • Crowd funding: Crowd funding is a fantastic option to raise money for your business as well. Various crowd funding platforms operate to help your business raise capital. Before opting for such a solution, you
    need to determine the implications of your business and be prepared to give up a part of your ownership to said investors.

What are your choices for business funding options?

  • Business loans: The most common way of funding your business is using a business loan. Here, a lender will help you determine the terms of the loan, the amount, the rate of interest, and the length of the loan. If you are looking for a quick influx of cash, you can opt for short term loans. If you are looking to get more significant amounts for funding bigger projects like a new office construction, you should opt for long term loans.

  • Equipment leasing: Equipment financing and leasing are a simple way of replacing a piece of old, worn-out business equipment without digging too far into your existing cash reserves. You can lease or purchase a piece of pre-owned or new material with ease. Depending on the situation, you can save a lot of money on taxes using the special tax deduction scheme for business equipment.

  • Invoice factoring: Dealing with unpaid invoices can be really difficult. For most businesses, your everyday cash flow is dependent on getting those invoice payments. An invoice factoring agency will pay you
    a percentage of the unpaid invoices up front. They will also collect your customers' payments on the invoice for you. Once the invoice amount is collected, you will receive the remaining amount after deducting a small fee from the company. If most of your clients tend to schedule a delayed payment on invoices, you can take the help of an invoice factoring company to recover your money.
  • Merchant cash advances: This is a business growth opportunity that provides you with the option of an advance payment on your future debit and credit card sales. Unlike regular business loans, this option does not have a set schedule for repayment. You will have to pay a percentage of the transactions on your credit card to your cash advance lenders when the sales occur. This funding solution works best for
    businesses that have many card transactions.
  • Business credit card: Business credit cards work in the same way as personal credit cards. The issuer will provide a credit limit on the card, which will allow you to make your business purchases up to said
    Businesses can generally get approved with a good credit score.
  • Business line of credit: Similar to a business credit card, a business line of credit will provide you with access to revolve your credit. This means that once you pay off the balance, you can use it again
    as long as you have credit. These credits are lower in amount than the business loans.
  • Bartering: Bartering is a common trend in business to date. For example, if you provide book-keeping services and need a website for your business, you can hire the services of a website designer in exchange for book-keeping services for them. Make sure that you speak with your tax advisor to ensure any tax consequences on your trade are handled properly.

Choosing the best funding solution to fit your business

It is essential to choose the right type and source of financing to ensure that your business grows and is successful. We would advise you to consider your available options only after carefully going through them and then choose the best one that suits your requirements the most. There is no such one-size-fits-all solution when it comes to funding your businesses. Take your time and do the research, and compare the different funding solutions to find the right fit for your business. This way, you will have a higher chance of getting approved and will be able to get your business moving in the right direction.


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