Unless you’re fortunate enough to have been born with a silver spoon in your mouth, funding a new business venture is likely to involve a seemingly endless struggle with the green stuff.
For fledgling firms, cash is especially tight, with begging letters to bank managers, endless loan forms and countless snobbish letters rebuffing your pleas for funding.
But times have changed.
Gone are the days of relying on a cash injection from your local financial institution, with many modern start-ups looking at more unorthodox ways to fund their business goals.
Check out the top five below …
1. Use a Factoring Company
Countless rapidly expanding businesses are using receivables factoring companies as a handy alternative to the traditional overdraft.
This route involves your firm selling the majority of invoices to a factoring firm at a discount. They’ll then provide you with a cash advance, usually at around 70-90 per cent of the value of the invoice.
2. Join the Crowdfunding Movement
Crowdfunding is one of the hottest ways of raising cash and it involves collecting finance from a large number of backers by using various digital platforms.
Crowdfunding has helped finance non-profit campaigns, political campaigns and charities, and can be very fruitful for businesses keen to involve unknowns in their capital raising efforts.
3. Obtain Government Backing
In Britain, it’s possible for businesses to benefit from the Funding for Lending scheme introduced by the Bank of England over two years ago.
The scheme allows building societies and banks to borrow from the Bank of England at lower rates, which means they can lend more freely to businesses just like yours.
4. Find an Angel
Not a real angel, of course, that would be a bit odd, but an angel investor equipped with the wealth and experience to help your firm grow from small acorn to mighty oak.
Estimates reckon business angels inject over £800m into new companies every year in the UK, with shares in that organisation the typical upshot of their financial backing.
5. Venture Capital
When you’re attempting to build a business up from the ground, suddenly handing an element of control to a venture capitalist may make you more than a little uncomfortable.
However, this arrangement can actually be very beneficial for new businesses, assuming the investor and firm they’re investing in is a match. Typically, above average returns tend to make the risk for investors worthwhile.
Image by Howard Lake on Flickr