You are talented, creative, passionate. You know you have the next big idea. The One. The idea that is going to change a small, or a big, part of the world. There are days where you can think of nothing but how your idea is going to explode into reality. But how do you go about funding a business?
Money makes all the difference when you’re trying to get a new business idea off the ground. Whether you’re trying to grow your existing organisation, start a new one, or launch an innovative product, the chances are that you’ll need cash to do it – but part of the challenge is in knowing where to look.
As female entrepreneurs look to accelerate out of the COVID-19 pandemic, we’ve summarised five of the very best sources of business funding available on the market today. By accessing commercial credit from one of these sources, you could improve your chances of business success in 2021 and beyond.
Options for funding a business
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Ask Family and Friends
If you don’t have access to an existing pool of capital in the form of savings, the easiest option may be to ask for support from family and friends. This option is only likely to be available to certain entrepreneurs, since not everyone’s family members have money to spare.
The important thing to remember about borrowing from relatives is that any issues can put unnecessary strain on your relationships. For this reason, it’s essential to put any funding agreement in writing. Failing to do so can lead to arguments and even business-related disputes in the future, which many entrepreneurs are naturally keen to avoid.
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Use a Bank Overdraft
If you anticipate needing to draw on regular credit to finance your business’s growth, a bank overdraft could be the convenient option you’ve been looking for.
The principle is relatively simple. By agreeing to a revolving bank overdraft, you can maintain your cash flow by dipping into the facility as and when you need it. The amount you borrow can then be repaid during busier months, leaving you with a flexible and affordable means of borrowing money.
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Try Out Crowdfunding
Crowdfunding platforms make it possible to raise much-needed cash from a wider pool of retail investors. When raising funds in this way, you’ll usually be confronted with a very significant decision – whether to offer equity or rewards in the form of products and services.
It might seem like an easy choice to offer rewards rather than a small stake in your business, but you’ll still need to satisfy those gifts and early-adopter orders at some point in the future. You’ll also need to find a way to entice investors into funding your business, and so this is usually a more appropriate choice for ventures that have a novel and easily marketable product.
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Apply for a Personal Loan
Personal loans can provide entrepreneurs with easy access to cash, all without needing to explain to their bank why they need the extra funds. The only catch is in finding the right lender for your business.
By applying for a personal loan via an online credit broker, you could avoid having to make multiple applications in the hope of getting approved. Many direct lenders even offer options where you can get your loan quickly, with the money you request making it into your account within moments of an approval.
Personal loans are an incredibly simple way to borrow money for your business, and can provide rapid access to the cash you need.
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Business Cash Advance
Depending on your business proposal, you may be able to access extra funds by way of a cash advance. Some payment services providers make it possible for their customers to secure significant sums of capital upfront, with the amount repaid directly over time as the business makes sales.
It’s a flexible and convenient way to access substantial sums of money, but it can prove difficult to qualify for these schemes since their providers are generally looking for well-established businesses with long credit histories.
6. Small business grants
Many organizations offer small business grants to entrepreneurs, and there are specific small business grants that women can apply for.
Secure the Funding Your Business Needs
All things considered, there are plenty of options for female entrepreneurs looking for a little extra business funding. The main difficulty is in finding the right option to suit your circumstances and the needs of your business.
As with any commercial decision, the key is to assess the advantages and disadvantages of any particular form of business funding. By doing your research and thinking carefully before making an application, you’ll stand a better chance of getting approved and securing the money you need to seize opportunities as they arise.
