Business Funding Strategies
Posted on Apr 30 2008 | Tagged as: Finance
Business Bank Loan
One of the most typical routes to business funding is a loan from your business bank, however in practice these can be difficult to be approved for unless you have assets to speak of, or you are willing to put up personal security to cover the debt if the business were to go out of business before the loan had been paid off.
Starting with your own bank can be a good strategy, your existing bank will be in a good position to merit you for your good standing and trading history. It pays not to over look other lenders, even if your bank offers you a competitive rate.
Factoring (Invoice Finance)
Factoring is a way of raising quick finance at low cost. It is ideal for business with steady sales in a business to business industry. Factoring firms will provide business funding based on the value of your outstanding invoices. This can be beneficial if you operate with high margins to justify the fees associated.
Credit Cards/Overdraft
If you are looking to cover unexpected purchase and expenses then credit cards can work. For a startup business with low initial launch costs credit cards can be a viable option. There are many interest free rates available so it can be a simple and efficient source of business funding. An overdraft facility is another option, however this is an unstable form of finance as the bank can withdraw the overdraft facility at any time.
Leasing
If you require business funding for the capital outlay for machinery or expensive equipment then leasing could be a safe bet. Leasing spreads the cost of owning important business equipment over a set length of time enabling the operation to scale up pretty quickly.
Equity Finance/Outside Investment
Seeking business funding by releasing equity shares in your business can be highly beneficial as outside investors, such as Business Angels can add experience and knowledge to your business as well as the capital injection. This type of finance also carries less risk to your possessions as you will not usually be required to provide any personal security to cover the funding needed.
An streamlined method to attract investors to your business is to register with Edge Venture and record an elevator pitch, this will present your business funding opportunity to many investors at once.
Edge Venture is a simple, effective way to attract attention from business angels looking for high growth business investment opportunities. Visit Edge Venture now to find out more.
- Simon Murray