It’s a tough market out there for any budding entrepreneur, particularly when it comes to business financing. Banks don’t want to lend money, venture capitalists notice a bear market coming, and relying on credit is a risky prospect. But it’s 2018, there are many ways to get the business financing you need to expand operations, hire another staff member, or unleash a new strategy.
Here are five things successful people want you to know about business financing in 2018:
1. Take Advantage of New Technology & Tools
As you have likely noticed over the last several years, there are new technologies and tools being born all over the Internet. Crowdfunding, Patreon, peer-to-peer (P2P) lending, and PayPal tipping are just some of the services that people use to send money from one person to another.
Entrepreneurs, startups, and small businesses can take advantage of these things, too.
If you’re out of luck at a bank and you’re not attracting any angel investors, then you can tap into these new tools to ensure that you get some financing for your company.
But that doesn’t mean you can’t complement the old with the new!
2. You Can Still Rely on Traditional Methods
Bank loans, venture capitalists, a line of credit, and other types of more conventional means can work just as well. That is, if you can get your hands on these traditional methods. It’s a tough environment out there for small businesses, no matter how much money is passing hands in initial public offerings (IPOs) or on “Shark Tank.”
Simply put: just because you’re use new tools, it doesn’t mean you can’t rely on old measures.
3. Factoring Can Help in Down Times
For the typical small business, cash flows and budgets can be tight. If a customer fails to pay their bill on time or you specialize in an industry that demands payments months ahead, it can be difficult to get by day to day.
This is why a new service is becoming popular for a diverse array of businesses and professionals, whether it is apparel or real estate. And that service is called factoring.
Factoring is a finance scheme where a business sells its receivables at a discount to a firm to receive a lump sum of cash up-front. It is true that it can be expensive because you pay a small fee of about one to five percent to get money within 30 days.
4. Seek Out Government Funding
Many governments – federal, provincial, or municipal – want to give away money to business, particularly if companies are focusing on industries near and dear to politicians, like green energy, biotech, social media, and other politically-friendly niches.
If you think that you’re in a sector that a politician would adore, then you should consider tapping into government funding.
Although small business grants are still offered across the Great White North, there are other funding mechanisms to utilize. These often include tax credits, tax deductions, contracts, and loopholes. Any little bit helps in the world of business.
5. A Credit Card Can Be a Life Raft
In the end, perhaps the only tool left in your arsenal is a credit card.
A Visa, MasterCard, American Express. It doesn’t matter what the credit card is, but it can be of tremendous help when your company is struggling to cover costs, expand operations, or even keeping the doors open. It is indeed a life raft.
That said, you need to be extra diligent and careful when using a credit card for business reasons. If you’re late, then you’ll endure a hefty interest charge. If you’re only making the minimum payments, then you’re getting yourself stuck in a hole that will be hard to climb out of. Use a credit card if you must but beware of the risks!
The stock market is booming, small business surveys show optimism, consumer indexes are ballooning, and shoppers are spending again. Are you getting your fair share of the boom?
For a lot of small firms, revenues may be doing well, but it is hard to step beyond that next threshold without business financing. Without it, they’re being held back.
Perhaps it is finally time to reach out rather than biding your time and waiting for that hand.
Crowdfunding or credit cards, angel investors or venture capitalists, the choice is yours. But you will need to meet the universe halfway if you want to obtain business financing.