Business owners of all kinds are united by a couple of goals – to have more time, and to make more money. The thing is, these two high-value commodities seem to have a negative correlation. The more time you spend earning, the less time you have to yourself. Similarly, taking time off could lead to lower dividends and profits.
Fortunately, there are ways to find the sweet spot between time and money, with the most reliable being to scale your business. If you can grow your company effectively, you may eventually reach a point where it runs itself and you’re only needed to make the big decisions whilst still taking home a significant portion of the profits.
On top of knowledge and effort, you’re going to need money if you want to expand your business – but finding it isn’t always easy. Entrepreneurs frequently find themselves hitting a brick wall when trying to finance their commercial ideas, but that needn’t be the case when there are so many funding options available.
With these concerns in mind, here are four of the best ways to raise money for business growth as we go into 2021.
1. Borrow from friends or family
Sometimes it pays to look for help close to home. From Amazon’s Jeff Bezos to Alibaba’s Jack Ma, there’s a long list of serial entrepreneurs who have asked for help from their nearest and dearest in the past, and it’s easy to understand why.
For one thing, friends and family are unlikely to charge an extortionate rate of interest and might well invest based on goodwill and trust alone.
The major problem, of course, is that raising money from friends and family might not actually be an option since not everybody has high levels of liquid capital to pump into a business. Even for those who do, it might be that their investment requires you to give up a slice of your rapidly growing business.
2. Get investment from a venture capital firm
Venture capital is a form of finance that’s available to early-stage companies that seem to have significant potential. The money can generally be used to scale the firm and many of the investment firms that involve themselves in this kind of funding can also provide invaluable business guidance whilst stumping up vast quantities of cash.
The catch, of course, is that business owners will need to sign over a portion of their company in exchange for the help and money. If you’re comfortable with giving up some control of your business (not to mention a portion of its future profits) then venture capital may very well be the answer, but entrepreneurs should think carefully about their goals and how they might be affected.
3. Take out a bank loan
Bank loans are the most traditional method of funding a business expansion, but not necessarily the best. As with any bank loan, you’ll first need to satisfy the relevant underwriters and managers that your business meets with their requirements, and even then, you’ll need to comply with the conditions of the lending which can be quite restrictive.
It’s also worth bearing in mind that you’ll need to meet the eligibility criteria of high street lenders, and this might include having a good credit score, having assets against which the loan can be secured, or the need for a company director to act as a personal guarantor for the loan. These requirements might not be the most onerous, but they can really make it difficult to find the right borrowing solution for your business.
4. Get a flexible personal loan
A direct challenger to bank loans, taking out a short-term personal loan from a modern direct lender could help you to avoid the restrictions that more old-fashioned financiers may impose.
By using an online credit broker such as Little Loans, business directors could take out a personal loan to help them cover the costs of an expansion – with a flexible repayment period and none of the tasking questions about how you’ll use the money to improve your business.
These are generally no guarantor loans that are easy to apply for and simple to manage.
The right funding solution for your business
In all, finding business finance is all about choosing the right option for your plans. Whether that’s a no guarantor personal loan or even seeking out formal support from a venture capital firm, there’s money to go around – you just need to know where to look!
