Best ways to get working capital for your business
Posted on: 02 March 2018 by Paul Glenn
No matter what your business is all about, at one point you would require some sort of funding to bring your ideas to life or scale up.
This is one area that a lot of entrepreneurs have to deal with and here is the top 5 ways to get working capital for your business outlined by Unblock:
More often than not, a lot of entrepreneurs and small business owners have to revert to their own services to personal savings to boost their business. This trend which is also known as boot-strapping is what sustains and acts as the net working capital for a lot of small business owners before they can pull in funds from investors, banks or partners. A lot of investors are often wary about entrepreneurs who cannot out in their money into their own business or idea because if you cannot put your own money into your business. Then why should they do the same?
Friends and Families
Friends and families are often the first investors in any startup idea or small business venture so it is important to rely on this avenue to get a working capital for your business as they always without interest and you can work without pressure (if it is not a huge amount of money). It also faster to get investment from friends and family although there is a downside to it because if the business fails and they don’t get their investment back, it could affect the relationship that you have with them in the long run.
Small Business Loans
I know you are probably rolling your eyes when you read “small business loans” because you have a bad experience with banks that refuse to provide the small funds that your business needs to scale but would rather give millions of dollars to a huge company that has not pulled in a profit in 2 years. Well you are right but there are a lot of companies that provide small business loans and all you need to do is to get on the internet or ask a few business friends and you could be well on your way to getting a net working capital for your business and you don’t have to give away a part of your business.
Angel investors can be the angel that your business needs to stay alive and if you get the timeline and your business plan right, you could well be on your way to getting the right funding for your business. Angel investors are great when you need a little bit more money than a small business loan can provide for your business and this is often needed when you want to expand your business. Getting the attention of angel investors can be a very tricky business because sometimes it is not about your business but how it is presented as they get loads of business plan on a daily basis so yours has to be standout.
You can pull in a lot of funds to keep your business afloat is to ask for upfront payment for products and services. This is not a very popular method of raising money but it is a very effective way of getting net working capital especially if your products or services are very relevant to the everyday lives of customers.
It does not matter the path that you take and you can combine all 5 to boost your business. What truly matters is your product or services so you have to keep refining it till it gets better and irresistible to consumers.