6 Tips to Arrange Finances for Your Growing Business

We bet every one of you must be aware of the fact that a start-up mostly fails in its initial stage due to the lack or unavailability of funds.

Money is the driving force of any business. In fact, even for an idea of a business to materialize into a reality, the abundance of capital is a must. This is why we often see individuals having a goal of starting a business or entrepreneurs amidst their start-ups asking how will they raise funds to kick-start their business or continue running their operations respectively.

Now you know how much it is crucial to arrange finances but it is more important to do that according to the nature and type of your business. But, just in case it is this moment that you are looking out for an option, you have come to the right place.

Below is a comprehensive guide encompassing six options that will help you in raising capital for your business. Before you make a choice, it is important to note that the option which proves to be viable for one business may not be as supportive of the other one. So, make sure you have had your complete research done and then feel free to have your pick.

1. Give Crowdfunding a Go!

It has managed to emerge as one of the most popular and reliable options for raising funds in the industry lately. Crowdfunding is just like taking a loan or seeking a contribution from more than one person simultaneously.

So, how does one exactly make it happen?

Well, to put the process in perspective, there are online crowdfunding platforms on which an entrepreneur is required to put up his idea or background of the business in detail. It should include details about the goals and aims of the business, the planning regarding profit generation, the reasons behind his seeking funding and how does he plan to put the funds into action. Subsequently, people will start putting in their money if they happen to relate or like the idea of the business. The best part is that anyone from anywhere around the world can contribute money if they share a liking of the business idea.

2. Try Angel Investors

The Angel Investors own surplus cash and have a keen eye for investing in budding business ideas. They function by working in groups of networks in order to screen out proposals with the most potential and then move on to lending funds. In addition, they also offer advice other than the capital. The expert advice is another thing that you would require to help your business make its presence felt.

If you are wondering whether or not it is a fruitful option, allow us to tell you that giants such as Google or Alibaba initially have had enjoyed financial help from angel investors. This particular type of investing is needed in the early stages of the business. Also, the angel investors expect a 30% share in equity in exchange for the funding they provide.

3. Ever Heard of Venture Capitalists?

If you compare venture capitalists to angel investors, the former is where you can strike bigger amounts than the latter. Funding by a venture capitalist is the money that is managed professionally and is only given to businesses with immense potential.

In addition, they offer mentorship alongside expertise and help in the evaluation of the business in terms of sustainability and scalability.

However, this type of funding option is suitable for the businesses that have passed their initial stage and are already on the road to generating revenues.

4. Opt For Incubators and Accelerators

Growing businesses can seek help from incubators or accelerators. These are funding programs running almost in each and every major city. They run with the aim of assisting at least hundreds of business startups each year.

Both incubators and accelerators are somewhat the same in nature other than a few minor differences. Speaking of incubators, they are similar to how a parent is to a child where the business is that child. They nurture the business by providing the necessary capital and other tools. Accelerators, on the other hand, helps the businesses in taking a giant step towards success.

These programs run for a limited time of four to five months and demand serious time commitment from the owners of the businesses. Furthermore, they also serve as a good networking platform.

5. Make Use of Accounts Receivables Financing

Let’s begin this by understanding what is accounts receivables financing.

To begin with, it is also known as invoice financing in which unpaid invoices are instantly turned into cash. This cash, then, can be used to ensure the growing business survive and thrive.

Now, coming towards what makes it so suitable is the fact that you will not incur any debts. You are only having access to the money that, basically, you own.

The lenders who offer such a financing option consider the quality of invoices rather than the credit score. Therefore, a small business or a start-up can very easily opt for it as it does not have a high chance of owning that perfect credit score.

To sum up, it is a very good alternative to debt financing. Additionally, it is quite an easy process and on top of that, it is way easier to qualify for and obtain. Moreover, the funds are transferred in less than 24 hours. So, it is a win-win option for all the start-ups out there looking out for financing options.

6. Meet the Microfinance Providers

If you have failed when it comes to bagging a loan from the bank, then microfinance can be a great option. To be precise, microfinance is access to financial services and is meant for those who are unable to get through conventional banking services. In fact, it is gaining massive popularity due to its availability to those who can’t seek a bank loan due to a poor credit score.

The NBFCs or Non-Banking Financial Corporations are also a great option. They do provide banking services but don’t demand legal requirements that are generally associated with traditional banks.