If you want to know Ways to raise your business capital for your business, then this article is for you. In 2021, 73% of small businesses will be using some form of financing. Although money doesn’t grow on trees, there are several ways you can raise funding for your business without incurring so much debt.
Ways to raise your business capital
1. Bootstrap your business
2. Through Crowdfunding
3. Apply For A Loan
4. From friends and families
5. From angel investors
6. Investments from venture capitalists
Bootstrap your business
It will be more easier if your business isn’t operating in an industry like transportation and manufacturing company that requires heavy startup capital.
For less startup capital business, you can get a 0% / low interest APR business credit card which will offer you the chance to borrow fund for a period of time without incurring interest.
Also funding the business yourself carries lots of risk but if you believe in your vision and have an absolute refusal to accept failure as an option, then go ahead and put your own money into the business.
Investing your own money into your business will boost your chances of getting investors and lenders more willing to partner with you.
Launch a crowdfunding campaign
In 2013, some companies like Formlabs, a maker of affordable desktop 3D printers, raised $3 million on Kickstarter which allowed the company to scale their operation and achieve their goal.
Crowdfunding campaign gives you the opportunity to meet and possibly connect with like minded people, understand what’s people wants in your business and not. But most importantly, crowdfunding campaign can help you to raise money to fund your business.
How to launch a successful crowdfunding campaign to raise capital for your business?
To have a successful crowdfunding campaign, you must develop your own story because people on crowdfunding sites such as Kickstarter or Indiegogo would definitely want to know how you turned your idea into a reality. Also you can get a good website to serve as a boost.
Apply for a loan
From the Small Business Administration (SBA) statistics, 75% of financing for new firms are from business loans, credit cards, and other lines of credit. But to get approved easier for a loan, you would need to meet requirements like the following:
1. You have been in business for 2 years or more
2. The business has strong annual revenues (typically at least $100,000)
3. You have a Good credit score.
You could opt for invoice financing to get that money faster if you have outstanding invoices, especially when you need fund for machinery or tech devices
Please note that before applying for a small business loan, you must make sure to prepare all loan documents ahead of time because you may be asked to show a profit statement, balance sheets and bank statements. And in some cases even your personal information may be checked as well.
From friends and family
This is a viable option for many.
You can select a friend or family member with solid business skills or better still narrow your list down to friends or family who have faith that you will succeed and understand your plans.
Note that you must demonstrate passion and due diligence by having a sound business plan, direction and exact how much money is needed for the business.
From angel investor
Before going for angel investors, you must have a solid business plan put together and a great pitch ready. And strong convincing points to capture their attention.
Venture capitalists mostly want to invest in more mature companies unlike angel investors and they sometimes want to have more of a say in managing the day to day operations of the business.
If your company satisfies the venture capitalists requirements, you can apply for an investment with one of them. However it’s not going to be easy but not impossible either.
Steps to getting investors to invest in your business
1. You should be able to convey the main reasons why an investor should love your business in the first 5 minutes.
2. Detail the innovation, industry shift or any problem that presents substantial opportunity for your company to make a boost.
3. Show how your company can capitalize on this opportunity in less than 2 minutes.
4. Have your company’s story and financials at your finger tips.
5. Lay out the opportunity with numbers and discuss your team’s abilities and experience.
I believe that you now know the Ways to raise a business capital in 2021. Please don’t get discouraged when one doesn’t work out rather demonstrate due diligence, resourceful and persistent.