You have done a great job already if your business has started to make its presence felt. However, your duty doesn’t finish right here. Your real test starts from this moment on. This is the juncture which has seen many promising businesses to lose steam over the years.
This is the point where you need to put on your thinking cap and devise a foolproof strategy to expand your business operations. The reason why you need brainstorming is the fact that business expansion requires more than just one aspect to ponder upon. One of the most important aspects to focus on is the arrangement of financial resources to help you grow your company.
In simple words, business financing is a tough challenge for every growing company. Thankfully, you now have access to various financing options, including accounts receivables financing, SBA loans, and a number of other short and long-term financing to help you achieve your goal.
Let’s take a look at seven smart strategies you can use to ensure financing for your business growth.
1. Opt for a Bank Loan
A majority of businesses opt for a bank loan when they look to expand their wings. The best part about a bank loan is that they are mostly available instantly if you manage to maintain good credit history and credit score. Moreover, these loans can easily be paid back in a short or a long term. It allows companies to maintain their expenses in a long run, keeping in view the quantum of their liabilities. A number of financial institutions like JP Morgan Chase are known for earmarking extra funds for the smaller businesses and companies to help them grow. However, at the end of the day, you need to maintain a great reputation as a company to be able to inspire the lenders to release funds for your business expansion projects.
2. Complete Your Paperwork
Before you decide to secure a bank loan, your top priority should be to complete all your paperwork. Keeping all your documents in order will go a long way in giving you the advantage in the loan process. A smart and successful businessman keeps detailed records of the business operations, which allow the lenders to know exactly the state of the business and gauge its financial health and immediate as well as long-term potential challenges. The detailed business records also allow the lenders to keep track of the company’s competition. By doing this, the lenders can come up with a set of risks and challenges for your business, which should be kept in mind.
3. Credit Cards Can Come Handy
A proven effective strategy is for a growing business to use credit cards to arrange for funding. Although using credit may seem quite a risky option it allows you to pay the exact amount you require for business expansion.
On the other hand, any small or big-sized loan would require you to pay interest on the overall amount, whereas credit card option lets you pay only for the amount that you have used. Using the amount responsibly holds the key in this equation, because if you use up all the money on your credit card and somehow opt to pay the monthly minimum amount, you would only dig your own grave.
Business cards are also useful because they come with several perks related to cash back and travel rewards. For example, the Marriott Business Bonvoy credit card from American Express offers 6X points at Marriott Bonvoy hotels, making business purchases even more rewarding.
4. An SBA Loan Can Go a Long Way
One of the toughest challenges for entrepreneurs, seeking financing options, is bigger banks’ reluctance to take risk with them. In such scenarios, SBA loans turn out to be the best option, which are guaranteed by the U.S. Small Business Administration. The SBA loans have gained in popularity in recent years and many small businesses have ensured continuation of their journey through instant cash through such loans.
5. The Emergence of Crowdfunding
The phenomenon of crowdfunding has emerged in the recent years, which is becoming popular with small businesses with time. Under the system, you set a goal for financing that you want to raise over a period of time. People, including your friends, family members, and others, can pledge money on the site.
6. Give Factoring a Chance
Factoring is one of the most effective ways to generate funds for the expansion of a company’s operations. Factoring comes into play when a business sells out its receivables at a discounted price. You would often see company with poor credit report or credit history using factoring to generate cash. The thing to keep in mind is that it is regarded as an expensive option.
7. Find an Investor
If you’re lucky enough, you would be able to find a financially strong investor who is ready to buy risk in your company. Although the recent economic downturns have made it a difficult task to find an investor for your business, but there are still quite strong individuals and investors’ consortiums that are on the lookout for the businesses with potentials to park their investments.
The Final Word
Whether you’re a small business or a medium-sized company, your consistency will get you over the line at the end. Your consistent efforts will not only fill you with the confidence to make your business idea a success story but also give lenders the trust to buy risk in your company. This would provide you with the financial freedom you would require to implement your business expansion plans.
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for Growing Businesses