Are you a small business owner that’s just starting out in your industry? Or are you an entrepreneur looking to get your idea off the ground? Whatever type of business you run, it’s essential to have adequate financial backing, especially when you’re just starting out. Without it, your business may be doomed to fail from the outset. After all, it’s said that 60% of new businesses will go under in the first three years, and 20% will fail in 12 months. So how do you stop this from happening to your company?
If you don’t have thousands of pounds ready to go in your bank account, and Dragon’s Den doesn’t appeal… there’s plenty of other funding options to explore.
Bad Credit Business Loans
These loans are designed for small companies that need financial support to succeed, even if you have a bad credit history. If you can’t get a ‘traditional’ loan from one of the big high-street banks, it may be worth exploring bad credit business loans. Instead of looking at your history, these lenders often use alternative techniques to establish how well your business is performing, your reputation, customer feedback and more to create a picture of the level of risk. They will then decide whether to lend you money or not.
Venture Capitalists
A venture capitalist is a private investor that offers capitals to small, start-up companies that have high potential. They do this in exchange for an equity stake in the business – making this a great option for entrepreneurs that require both a financial investment and advice from an established businessperson. As they are taking a risk investing in you and your business, you need to show that you have a robust business plan that will ensure a good return on investment.
Cash Advance
You may be able to get a cash advance from a lender to inject capital into your business fast. This is a good option if you have cash flow issues or want to pay back the money back on your own terms – usually once your business has made money. For example, if you own a fashion store and get a cash advance, you can use it to pay for bills, wages etc and then pay the money back to the lender once you have sold stock to customers. A percentage of your debit or credit card sales will be taken by the lender until the cash has been paid back in full.
Of course, these are just some of the options available, and not every option will be right for every business. It’s important to understand the unique requirements and cash flow of your company before you dive into any financial agreement – and if in doubt, speak to Adam Guild a financial advisor.
