How to Fund Your Small Business Growth

Running a business can be a wonderful thing. The thrill of providing excellent quality and service to your customers is a hard feeling to beat. By its very nature, a business venture is usually destined to experience growth. Some people actually think that if a business is not growing, it is in fact dying. Expanding a small business can be a little tricky. Many owners raise the capital for their small business startups by somewhat unconventional means. If you have ever tried to borrow money from a bank for an unproven business idea, you probably understand why many entrepreneurs have to devise alternate methods for getting money to launch. Once the business is up and running, at a certain point another infusion of cash will likely be necessary for a venture to take the next step to grow in size. Business growth normally requires the owner to find a source of funding that is willing to risk capital on the notion that the operation will be profitable when running on a larger scale.


Operating an already profitable business, even if it is a small business, can make the borrower’s chances of getting a loan somewhat more favorable. However, most conventional lending institutions may hesitate to loan money unless the business meets certain requirements. Plan on providing accurate and detailed financial information about your business to anyone you plan to approach for some business growth capital. Professionally drawn up financial statements may go a long way toward demonstrating to the lender that you are serious about the success of your company.


In addition, it is probably a good idea to explain in writing backed up by numbers exactly how you will carry out your plans for business growth. Remember that you likely need to convince lenders that you not only know what you are doing but also possess a clear vision of how to accomplish your business goals.


When a conventional bank loan is not an option, some businesses turn to asset-based loans. These types of financial instruments allow the business owner to put inventory or account receivables up as collateral against borrowed money. The business owner can get the money they require for business growth up front and then use the profits the new growth provides to pay back the loan. If the plans for expansion go awry, the lender seizes assets to satisfy the debt.


Growing your small business may be one way to accomplish your financial plans for the future. Some people have a specific level of expansion in mind while others want the growth to continue indefinitely. Whatever the case, the deciding factor in the success of a business is usually securing the necessary money at the right time.


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