There is more than one way to raise financial resources for companies and raise capital and the first option starts with you. If you are not willing to invest in yourself, how can you expect someone else to do it?
Many successful entrepreneurs invest almost all of their savings in their small businesses, which helps attract the attention of investors because it is clear that you are fully committed to the project. But what if you have little capital to invest?
Most of the time, it’s best to wait for the launch of your product / service until you have something to offer.
Getting this first round of financing is usually the most difficult and lenders want to see that you are serious. When it comes to raising capital and getting closer to lenders, make sure you have an application value ready to be used.
Here are some of the best ways on how to get financial resources for companies, financing options and how to make the best choice.
Fundraising for companies
Access to capital is getting easier for small business owners, but they are not taking advantage of the traditional funding resources available.
According to The Hartford’s 2014 Small Business Successes study , more small business owners (46%) believe it is only slightly or not at all difficult to get a loan or other capital for their business – an increase of 39% compared to 2012.
However, 36% of small business owners surveyed used personal sources of finance, such as personal savings, retirement savings, or capital of their family and friends, on traditional sources of finance such as bank loans, bank credit lines, or loans .
Plunging into savings and taking away your future nest egg may not be the best way to fund a business. But where else can small businesses turn to?
In addition to several new programs being offered by traditional sources, there are several relatively new sources available such as online funding sites and crowdfunding sites.
There are also several new programs offered by traditional sources. Now that small businesses are finding it easier to get a loan, what resources should they consider? This will depend entirely on the situation of every small business owner.
How to raise financial resources for companies
1. Own credit
There is no way around this one. It is our # 1 choice of how to raise financial resources for companies.
Only in very rare cases can there be a startup with a founder investing $ 0 of their own money.
It does not have to be a fortune and the total sum depends on startup and a variety of unique circumstances. However, consider this a bid for yourself and prioritize it in fundraising for companies.
2. Investment of family and / or friends
It’s what many entrepreneurs avoid, but it’s actually the absolute best option. Do not worry about looking like you are begging or putting your loved ones in an uncomfortable position.
If you present your speech professionally and treat them as real investors (because they are), everything will go well, even if you are rejected.
You may be surprised at who has extra money and is interested in supporting your dreams.
This form of fundraising you “free” of various bureaucracies of traditional financing. But as we mentioned, it should be done in a strictly professional way and the parties involved should be aware and sure of the whole process. Therefore, review and create a schedule to present before mentioning values.
3. Loans on banks and traditional lenders
Small business loans from traditional lenders (banks) can offer surprisingly excellent terms and interest rates.
Of course, this depends on your credit profile and the kind of collateral you can offer. This is the reason why you need to have a well-crafted business plan for your company.
From the traditional point of view, this is your best bet on how to raise financial resources for companies and you can help optimize your credit score at the same time.
In addition, securing this loan helps other investors to realize that you are a “real company” and that it is worth investing.
If, for whatever reason, you do not qualify for a small business loan, there are several crowdfunding options available.
Do your research and select a reputable company with a high success rate.
This is a less orthodox approach, but it works wonderfully for many people in search of fundraising for companies.
Just be sure to look closely at the terms and fees and maybe have a legal advisor together to safely assess the advantages and disadvantages of that option.
5. Investment firms and angel investors
This is the cream of the harvest and the most difficult to ensure. Some investment companies have very clear instructions for betting, while others will basically come to you as if by magic.
To spark the interest of these profitable investors invest in Public Relations and Marketing. You may be exactly what they are looking for, but not if you are not visible in the market will not be found.
With the right supply of loans, for the right situation and for the right reasons, small business owners can take advantage of this access to money to grow, reach their goals and keep doing great things for their customers.