Now, more than ever, businesses need to be aggressive about seeking and taking growth opportunities and maintaining a reservoir of funds specifically for growing your business is key to having a successful business.
Here are some ways you can increase your business’ growth capital.
It’s very common for owners to invest their own money into their businesses for any reason, but for the intention of growing their business is one of the best reasons. Personally investing in your company keeps you from selling parts of the company too soon and looks good in the future if you’re seeking a loan or business investors.
Receiving growth capital from investors, whether venture capital firms or angel investors, always come with fine print and risk. Venture capital firms are institutions that seek out opportunities for their clients (investors) whereas angel investors are either individuals or a small group of individuals who are investing in businesses. In exchange for growth capital, both form of investors ask for equity in the company as well as a seat on the board to make decisions.
Taking out a loan is a very popular option for business owners, if they can qualify. Although banks may require collateral (e.g., inventory, equipment, property, etc) they do not gain any equity when lending money. There are loan programs, SBA loans, that are specifically tailored to aid in business growth and expansion.
Friends, Family & Local Businesses
Friends and family members, as well as other local businesses, are often some of the biggest investors. They have a vested interest in the community, the business’ success and in you. They genuinely want you to succeed. Write out the terms and conditions of the payment arrangement and pay them back as agreed. While receiving help and growth capital from friends and family members, keep in mind that these relationships are close to home. Ruining them over money can cost you a lot more than a business.
When growing your growth capital, keep inflation in mind. Money should always be saved and invested, if possible, to cover both current and future costs. New Horizon Capital Funding offers a wide range of solutions for growth capital. Contact our offices today to learn more.