5 Business Funding Techniques

Bank Financing

One of the most obvious routes to small business funding is a business bank loan, however in reality these can be difficult to be approved for unless you have assets to speak of, or you are willing to put up personal security to cover the debt if the business were to go out of business before the loan had been paid off.

A good strategy is to start with your own bank, your current bank will be in a good position to merit you for your good standing and trading history. Even if your bank offers you a favorable rate it pays not to over look other lenders.

Invoice Finance (Factoring)

Factoring can be a low cost way of raising quick funding. It is ideal for business with steady sales in a business to business industry. Factoring companies will provide business funding based on the value of your unpaid invoices. This can be beneficial if you operate with high margins to justify the fees associated.

Credit Cards/Overdraft

Credit cards are great for unexpected purchases and for expenses. For a new company with low initial operational costs credit cards can be a effective option. There are many interest free rates available so it can be a simple and efficient source of business funding. An overdraft facility is another option, however this is an unstable form of finance as the bank can remove the overdraft facility whenever they choose to.

Leasing

Many business require funding for machinery or expensive equipment, in these cases leasing could be beneficial. Leasing spreads the cost of owning critical business equipment over a set length of time enabling the operation to scale up pretty quickly.

Outside Investment/Equity Finance

Seeking business funding by releasing equity stakes in your business can be highly beneficial as outside investors, such as Business Angels can add expertise and knowledge to your business as well as the capital injection. This style of finance also carries less risk to your possessions as you will not usually need to provide any personal guarantees to cover the funding needed.

An streamlined method to attract investors to your business is to register with Edge Venture and record an elevator pitch, this will present your business funding opportunity to many investors at once.

Using Edge Venture to attract investors to your business is highly effective. Find the business funding you need from a database of hundreds of Business Angels and Venture Capitalists. Visit Edge Venture now to learn more.

- Simon Murray