Secrets to Finding and Securing Business Funds

friendly lending specialist shakes hands with young small business owner couple

Robin Lamb | Published 2 January 2023 | Updated 2 February 2023

Starting your own business requires a lot of hard work and dedication, but the biggest obstacle is often how to get the funds you need to bring your idea to life. From angel investors to crowdfunding platforms, this guide will provide helpful insight into how to raise money for your business.

Consider Which Financing Sources are Right for Your Situation

Different businesses have different needs when it comes to securing business funding, so it’s important to determine which sources of financing are best for your company. Some common options include angel investors, venture capital, crowdfunding platforms, bank loans, government grants and small business loans. Assess each option with care to make sure you find the best way to finance your business given your unique situation.

Research the Different Types of Working Capital Loans Available

Working capital loans help businesses that need short-term funding for day-to-day operations, such as payroll and supplier payments. These loans are typically offered by banks and come in several different forms. It’s important to research the various types of working capital loans available so you know how much money you can get and understand the terms of your financing agreement. Consider whether a short-term loan, line of credit or invoice factoring solution is right for your business before committing to any financing option.

Pay Attention to Loan Repayment Terms and Rates

When comparing working capital financing solutions, the terms and rates of repayment should be top priorities. Repayment terms affect how long it will take to pay off a loan and should suit your business’ cash flow cycle. Rates are important since they are directly tied to how much you’ll pay over the lifetime of the loan. If you don’t match your finances with a loan that meets your criteria, lenders might not approve your application or offer high-interest rates.

Utilise Crowdfunding Platforms and Other Alternatives to Bank Loans

If you’re feeling constrained by traditional bank loans, consider alternative financing options. Today, there are several crowdfunding platforms that offer financial products tailored to specific industries and needs. You can also look into working capital loans, factoring or invoice funding through online lenders. All these products provide access to short-term financial solutions for businesses of all sizes, and repayment terms are typically flexible.

Assess if Investment is a Viable Option for You

Investment can be an effective way to access capital for your business, but it's important to assess if it’s the right funding option for you. Many factors come into play when assessing an investment offer, including how closely your business model aligns with what investors are looking for and how much control you are willing to give up in exchange for the money. Additionally, cash investments typically require longer repayment cycles than traditional loan products. Evaluating the risks associated with each funding product is essential in getting financial help from the right source.

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