As an entrepreneur, it is in your best interest to know how to finance your small business. These five methods offer solutions that can work in your best interest.
1. Trim your budget, then save up until you can fund growth. This isn’t always a wise choice or feasible, but it can do well for companies that are okay with very slow growth. Assuming that you are able to keep up your services and product, your customers won’t notice and you will be able to expand organically. However, if you noticeably cut corners, customers will eventually complain and stop using your business. Should you choose this method, it’s a risk you will have to take.
2. Use capital from other businesses or investments to fund the growth of your newer company. Most entrepreneurs are serial entrepreneurs or heavy investors, and this is a great thing to be. When you have multiple successful businesses, you can use some of your take-home profits to kick off growth in your newer small business. The same can be said of returns from your investment portfolio. Of course, if you don’t have spare cash around, getting funding isn’t feasible this way.
3. Get a merchant cash advance. This is currently one of the most common business funding methods that small entrepreneurs use, and as long as you have a Clover POS with Slice, you can do it. Cash advances aren’t loans, they’re purchases of future sales at a discount. This means there’s no credit check, the money can come within a matter of days, and you don’t have to pay anything during weeks where you don’t earn anything. It’s simple, easy, and fast.
4. Find private investors to help you get the money you want. Glamorous as this sounds, this method of funding is very difficult to do. Getting investors is never easy, especially if you don’t have family or friends who are well off. Most private investors will have serious stipulations you need to follow when receiving money, to the point that it can actually restrict business growth. Moreover, obtaining funding can take years through this route. It’s not a good idea.
5. Obtain an SBA loan from a bank. In many ways, bank loans are a lot like getting cash from private investors. They also involve a lot of hoops to jump through to prove worthiness. Most entrepreneurs will need perfect credit in order to obtain a loan. Anything less than perfect is grounds for instant rejection. Between fixed monthly payments and high collateral requirements, this is definitely a risky arrangement for most entrepreneurs.
If you aren’t sure which option works best for you, it’s wise to consult with a financial expert who can help guide you to the right choice. At Slice, you can get free business funding advice even if you aren’t their customer or you can also search on Google for other online sources.