Whether your existing business model needs a facelift or you’re working to take things to the next level, raising capital can be a difficult process. Do you seek assistance from the pros or is it okay to keep begging grandma for a bigger advance on your inheritance? When it comes to securing capital for your existing business, it’s more than a matter of etiquette; it’s a matter of knowing what it will take to make your business grow.
Finding capital doesn’t have to be a daunting task; in fact, it can actually be an easy and powerful key to success when done effectively. Securing cash takes a little research and a lot of determination, but it’s incredibly doable and can make the difference between surviving and thriving. So stop hunkering down with your overextended wallet and use these four tips to start finding the capital your business needs to flourish.
1. Know your options. There are many potential sources of capital, including equity partners, friendly investors, professional investors, traditional banks and business cash advances. Equity partners are people who take an ownership role in the business and are then entitled to a portion of the profits for the lifetime of the entity. Friendly investors are typically friends and family who may take an equity position or simply provide debt financing. Professional investors include venture capitalist angel investors and traditional banks. Business cash advances deduct a percentage of daily future credit card batches in exchange for an upfront advance for an amount up to 150 percent of the business’ average monthly credit card sales. Of these options, a business cash advance can be the best way to grow an existing business because it gets businesses the cash right when needed. With a business cash advance, you will only wait an average of seven to 10 days between application and funding, and no fixed payments, maturity dates or collateral are necessary.
2. Create a list of “suitors.” It’s okay to be selective when searching for the best place to secure capital; it is your business, after all. Commonly referred to as “The Goldilocks” method, the right investor or loan needs to feel like the right fit for your specific business. When making a list of possible prospects, make sure to look for someone who specializes in your industry. That additional awareness of your industry at least means that person has an interest in what you’re doing with your business, but more importantly, finding someone with industry knowledge may help secure the exact amount of capital you need and provide a resource to help you achieve continued growth.
3. Come prepared. When it comes time to sit down with your future investors or loan advisors, make sure you have everything you need on hand. Even great business plans can get overlooked with poorly organized or communicated growth strategies. From bank account records and social media/marketing plans to the exact amount of capital needed and monthly sales records, showing up prepared not only makes life a little easier, but it also proves you’re serious about your venture. When it comes to getting a business cash advance for your existing business, all you’ll need to get started is a filled out application, your last six to 12 months of credit card processing statements and your last two bank statements. That’s it!
4. Set a closing date. This is especially important when dealing with friends and family or angel investors, since waiting for them to pony up the change can mean significant delays for your business’ growth plans. Setting an official closing date in writing will make sure you get the money you need on time and can help keep the relationship professional and healthy in the long run by clearly spelling out expectations as early in the game as possible.
This piece was supplied by Express Working Capital. For more information about the company, call 866-962-4922 or visit www.expressworkingcapital.com.