Simple Ways to Secure Finance for Your Business
If you need finance for your business, either to invest in new plant and machinery, to move premises, to expand in some other way or to give you better cash flow would you know where to start looking? For most businesses, their first port of call would be their bank, but they are not the only ones to provide finance and are not always the cheapest.
Business Loans
Like all forms of financing, business loans have their advantages and disadvantages. When you take out a loan it is usually for a specified term, and you could incur extra charges if you do not meet that. However, they do give you a lump sum of money to do with whatever you want, generally without you losing control of your business.
Stick to the terms of the agreement, and this can be one of the cheapest ways to borrow money. Even if your payment history is not great, it is possible to get a loan online that will cost you much less than some other ways of borrowing money. So, if you think you can manage the repayments, do give it a try because you might be surprised by the results.
Business Overdrafts
These appear to be a great way to borrow money because you can keep reusing the overdraft, as long as you keep within its limitations. The problem is, that unlike a loan, that is exactly what you do, and you may well find that you never pay it off. It is why eventually, many business owners convert their overdraft to a loan, just so they can say goodbye to the borrowing.
Government Grants
Government grants were introduced to help new businesses and the great thing about them is they do not have to be repaid. There are different types of grants with different criteria, but you can check out all the information online.
Angel Investors
Convince someone of how well your business could do if it has a bit more cash and you may well find they are willing to invest some money with you. Known as Angel Investors, they part with their cash in return for a stake in the business. They do not normally become involved in the running day to day, but may well specify what the money can be used for, and want regular progress reports.
Some people are happy to go along with this, but not everyone can deal with the fact there is someone else involved in the ownership.
Crowdfunding
With crowdfunding, you put your idea forward and ask people to fund it for you. The money could come from hundreds of small investors, and for a really good idea, this can be a brilliant way to get it off the ground. There is also Debt Crowdfunding, where basically the investors lend you the money and you pay it back to them with interest.
The Cheapest Way
Always, without any shadow of a doubt, the cheapest way to buy new plant and machinery and keep 100 % control of your business is for the company to finance it out of profits. That is not always possible though, so you need to look at the other options. Just remember that none of the institutions that lend money does so for free. By the same token, they want your business, and you should use that fact as leverage to get the best interest rate that you can.
This is a collaborative post.
