• Home
  • About
  • Advertise
  • How to Start a Blog

Smart Marketerz

Marketing And Smart Business Tips

  • Business
  • Make Money Online
  • Finance
  • Marketing
  • Blogging
  • Social Media
  • SEO
  • Web Traffic
  • Tech

How To Finance A Small Business

September 16, 2018 By Erik Emanuelli 3 Comments

Obtaining funds to finance the growth of an SME is a constant challenge in the lives of entrepreneurs; finding the funding you need for your small business has never been a simple task. It gets even worse if the current economy shows very poor growth and stagnation of consumer consumption. Therefore, setting up a business and finding the necessary financing to carry it out is presented as an almost titanic task, with many uncertainties.  

The good news is that there are new channels available for small and medium businesses, such as crowdfunding, bootstrapping and more. Many are having a significant impact in recent times. Here are a few funding tips to consider: 

 

1. Bootstrapping

Bootstrapping often refers to starting a business with no resources or with very few resources. In the area of ​​business, it means to exercise some entrepreneurial activity with little or no capital, such as undertake activities with only the means that are within reach.  A considerable advantage of bootstrapping is that the risk is almost zero since the business owner will not owe anything to anyone. If they fail, they will not have lost too much, and can always try again. 

 

2. Bank Loan

Going to the bank to ask for a loan has become the norm for many small businesses. The problem with borrowing from the bank in the case of SMEs occurs when companies need to have extra capital that allows them to grow. It is a situation that makes the possibility of banks granting them credit more complex since they prefer to invest in larger companies that present a lower risk when it comes to meeting financial obligations. 

 

3. Get A Credit Card

A corporate card can be used to order the daily expenses of your company and works as a line of credit, since the payment is made after the expiration, as in the case of personal cards. Some cards can offer discounts on business-related items as an additional advantage.  

Obtaining a credit card from the bank is prevalent in many businesses. However, as a new business, you will need to ascertain that you have good credit to do this. If not, it may be best to consider alternative methods such as using companies such as Bonsai Finance. They can provide credit cards for people with poor credit. 

 

4. Use Startup Incubators

If your business model demonstrates the intensive use of technology and is scalable, it is likely that the type of funding that will most benefit your business is an incubator or a business accelerator. Most often, these types of funding will help to shape your business ideas, and you may also get some good mentoring and financing to get your business running. 

 

5. Consider Leasing

Leasing is a form of rent with purchase option, which can be used to acquire vehicles, machinery or other goods of great value. The payment period is usually between 36 and 60 months, depending on the item. Once finished, the product can be returned or your purchase can be completed at a pre-established value, which is lower than the market value, taking into account the expenditures made as a rental and the wear of the good during the time in which it was already used. 

 

6. Consider Networking

The use of networking through the exchange of services involves reaching agreements with other companies to form a relationship in which everyone somehow wins one way or another. Although this method does not directly involve you getting finance, it does somehow help to reduce the fixed costs of your business and can help your company save money. 

The only downside with this method is that when dependency on such business relationships is created, there is always the risk of conflict where one of the parties does not comply with the original agreement. 

 

7. NegotiateAnAdvance With A Client

If you are lucky enough to find clients that are willing to purchase a product or service even before launching your business, you can use that money to finance other needs of your business. However, it is best to only count on clients that assist with giving your business a better image, are trustworthy, and that also value the quality you have demonstrated on previous occasions. This is good because you will be certain that these are loyal clients, and this can become a recurring way to finance your activities. 

 

8. Use A Business Angel

Angel investors are a great option because they tend to demonstrate a social commitment to the community in which they find him or herself. They are usually successful entrepreneurs or investors seeking the development of entrepreneurs. 

 

9. Consider Venture Capital Lenders

If your business idea can somehow demonstrate that it is scalable and that it can generate profits in the short-medium term, it may be worthwhile to consider using venture capital funds. The positive part of using such a service is that such investors are used to losing money and are used to risk. They understand the reality and know that if one of their investments goes well, the benefits they will gain in return will be enormous.  

The downside is that many venture capital companies are more concerned about the benefits the funds will bring to themselves rather than the company, sometimes forcing the founders to make decisions that they do not truly want. 

 

10. Consider Crowdfunding

Crowdfunding is a great alternative when financing a company. It allows any small investor to bet on your company, and the investments are often backed by the transparency and quality of the company providing the service. When considering crowdfunding, it’s always best to have an idea of the kind of funders you want to invest. 

 

11. Ask FamilyAndFriends

Resorting to family and friends is another option to consider if you really want to get your business off the ground and grow it. With a collective investment, they can help to offer you the initial kick which you need to start your project.  

 

If the above alternatives do not fit the financial needs of your company, do not be discouraged. These are just some of the most common forms of credit. There are other ways to finance yourself. Do not forget to check with your bank or a specialist to find the model that best suits your needs. 

 

 

 

  • Facebook
  • Twitter
  • Google+

Related posts:

3 Cunning Small Business Marketing Ideas 4 Reasons Why Non-Conforming Loans Are Better Should You Choose a Short Term Business Loan or a Credit Card? 7 Points To Remember Before Entering In A Contract With A Factoring Company The Pros Of Starting A Business In Singapore Why Investment Could Help Fund Your Startup Default ThumbnailMake Your Employees’ Wellbeing A Priority: How To Support Staff With Musculoskeletal Disorders  5 Things to Ask Your Car Loan Lenders in 2019 When to Outsource in Business The Journey to Financial Freedom and Understanding A Guide to Pension Contributions and Types The Key Considerations When Creating Your Business How To Get Finance In An Emergency When You Have Bad Credit Must-watch Films About Finance

Filed Under: Business Tagged With: business

Comments

  1. Goody says

    September 24, 2018 at 3:48 pm

    Honestly , many people out they have good business ideas but no capital to start up the business. thanks for this tips.

    Reply
  2. Onoff says

    October 15, 2018 at 8:26 am

    Finance is always a headache when business starts.

    Reply
  3. Erika Ann says

    October 16, 2018 at 10:32 am

    I feel like asking clients for advance is such a risky thing to do when starting a business but it could be a high risk high reward investment. Crowdsourcing is good too! But you could promise returns to those that would fund your business ideas.

    Reply

Leave a Reply to Erika Ann Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

SPONSORS

Don’t Miss to Read This

How to Figure Out If You’re a Workaholic – by Wrike project management software

Cartoon Pharmacist Riding Capsule Missile

Some Technical Tips to Improve Your Blog

3 Cunning Small Business Marketing Ideas

How To Expand Your Marketing On A Global Scale

It’s Easy to Become a Notary Public

SPONSORS

Don't Miss to Read This

  • 8 Ways to Increase the Alexa Rank of YOUR Blog 29.5k views
  • Making Money Through Blogging: Is This Really A Possibility? 28.2k views
  • 6 Easy Ways to Get More Traffic on Your Site 16.9k views
  • How to Get More Traffic to Your Blog 12.5k views
  • 20 CMS You Can Use as Alternatives to WordPress 8.4k views

Recent Posts

  • 10 Evergreen Tips to Improve Your Blog
  • Guide To Buying An Air Conditioner
  • 6 Marketing Investments Skilled Trade Businesses Should Consider in 2021
  • Why Leadership Development is a Great Investment
  • How to Start a Vacation Rental Business

Search

Archives

Copyright © 2021 SmartMarketerz - Privacy & Disclosure Policy

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.Accept Reject Read More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Non-necessary

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.