Even the most original business concept or plans can only go so far in having the required growth. You will certainly need to raise funds for your business to reach the desired stage.
The most difficult task for business owners is raising capital for new ventures or expansion. You will require assistance unless you are independently affluent.
There are a variety of ways to raise funds for your small business, but many of them are either expensive, require collateral like personal property, or involve the involvement and expectations of other people, as in the case of loans from friends and family, funding from angel investors, or venture capital financing.
If you would rather finance your company endeavours, here are five smart ways to raise funds for your business by yourself.
1. Open a savings account
Opening a savings account is a terrific way to get your business off the ground. The adage “cash is king” is one that we have all heard. Use your savings account as a holding place for all the money intended to launch your business if you have previously set aside money to do so.
Depending on the nature of your business, you may need to set aside money for legal expenditures like trademark filings, creating an internet presence, and any costs associated with purchasing items.
Always keep separate savings accounts for unforeseen personal expenses. Never spend your entire savings only to launch a business.
2. Open a personal loan
Opening a personal loan with a bank is another independent means of financing your company.
Applying for a personal loan with an online bank that offers low rates, like Branch, Carbon, or Okash is a better option because most traditional banks normally only offer short-term loans that must be repaid within a couple of years and require collateral to get a loan.
If you have good credit, you can be given a longer grace period before making loan payments. It helps raise your credit score and allows you more time to repay the loan, making a good cash flow system for your business.
The ability to refinance a loan after three months of payments is an additional advantage, as it may result in reduced interest rates and monthly payments.
3. Make use of “buy now, pay later” programs
Outsourcing the payment of your sales is another way to finance your business. If you run an online business model, platforms like Credpal or Spectra compensate your business for purchases made by customers while enabling them to pay in convenient instalments later.
These “buy now, pay later” payment methods encourage customers to place orders even if they want to pay overtime and are especially useful if your website sells expensive items like luxury goods, expensive courses, or home furnishings.
With the help of these services, your company can receive the funds right away without taking the risky step of giving customers credit.
Use the power of the internet to raise the funds you require for your business if you are passionate about a cause.
In recent years, crowdfunding websites like GoFundMe have grown in popularity among businesses, inventors, and the general public.
They’re simple to set up, and if you can express your enthusiasm in the description of your fundraiser, you might be able to win the support of individuals all around the world.
Additionally, you can directly borrow money from friends and family or ask them to donate to your crowdfunding campaign. The best and safest way to raise money is through people you know.
They will likely be more receptive to your suggestion because they have witnessed your hard work and commitment.
5. Funding initiatives
If you’re wondering how to raise money for business expansion, looking into government or private initiatives like Tony Elumelu Foundation is an excellent place to start.
The business funding programs are an option but keep in mind that they are very competitive.
With this kind of financing, government or private initiatives might help a business raise money. It’s crucial to remember that interest rates are a little higher than those offered by most banks.