Business growth and expansion have always been the primary goals of entrepreneurs. However, doing these require an infusion of capital. If you don’t have loads of cash, don’t fret because there are still some ways for you to hit your targets. Consider these five ways so you can afford to expand your business.
Apply for a Commercial Loan
The most standard way to expand your business is to apply for a loan. Banks and lending institutions offer different kinds of commercial loans. These have varying requirements like collateral, interest rate, loan terms, and more. Your loan’s approval or rejection will hinge mainly on your credit history, the financial standing of your business, and your other personal assets. Prepare to gather the necessary documentation so you can apply for this loan at your chosen financial institution.
Ask Help From Family and Friends
When you require quick access to money to address your business issues, a loan may not be the best option because it takes a lot of time to process your papers. Usually, it is common to seek help from family and friends when you run into problems. However, be careful of this approach because you don’t want to sever your relationship if you are unable to make payments on your loan. For best results, treat your deal as a business transaction with a contract and collateral. This protects both you and your loved ones.
Seek the Aid of an Angel Investor
Many angel investors in various networks out there are looking to help startups expand their business. Do your due diligence and research to see which angel investors align with your products and services. Prepare a detailed presentation on your expansion plans to secure funding. The best benefit of using this financing method is you gain an experienced mentor who can give you valuable insight and help you guide your business. They can also help you connect with other businesses that complement yours, such as a better distributor/supplier.
Set Up Crowdfunding
Thanks to the advent of technology, there are many crowdfunding sites where you can ask for monetary contributions or donations to fund your expansion. You appeal to the kindness of strangers by sharing your business story online. Make it worth your donors’ while by giving away something free like an ebook, a webinar, or something tangible like a T-shirt. With crowdfunding, you open your doors to the whole world, so you are not limited to your locality. Crowdfunding is also a great marketing campaign since you get brand exposure from the website’s traffic.
Use Home Equity
If you own your own house, and you have been living there for a while, consider leveraging your home equity. Refinance your house and use the extra money you get to fund your business expansion. When you go with a home equity loan, you get reasonable loan payment terms that you can stretch out for a long time. On top of that, you also get a good interest rate that doesn’t levy too much cost. Aside from real estate, other personal belongings that have considerable monetary value, such as jewelry, paintings, and your car, can be used as collateral to secure a loan.
This is not even an exhaustive list yet, but as you can see, there are many ways you can expand your business without breaking your wallet. For best results, list down your goals so you can assess which funding option will work best for your company. It is vital to grow your business if you don’t want to get left behind by your competitors.