Money is the lifeblood of any business. You strive to make a profit, expand, and, most importantly, pay yourself and your employees. Traditional avenues to raise business capital are banks and investment firms.
Today’s instant knowledge and worldwide exposure enable a company to different avenues to travel for that much-needed business capital.
Crowdfunding
Crowdfunding is a relatively new financing source. If you’re a woman, you may have a slight edge using this funding method. A 2017 study by Pricewaterhousecoopers found that worldwide, women are 5 percent more likely than men to reach their target in crowdfunded campaigns.
The key to obtaining seed money from crowdfunding is the pitch and nature of the business or product. How it’s pitched is often more important than the person who does the proposal. Prepare and practice your presentation as many times as it takes before uploading to a crowdfunding site.
Trading Stocks
When you decide to raise business capital through the use of stock trades, do not play the market. Investing in stocks can be very lucrative if you study and do your homework. Many fortunes have been made and lost on Wall Street. The best advice is to find solid companies with good earnings potential and great product pipelines. Millions of people try to learn how to make money from trading stocks. Finding the right answer can be very lucrative.
Revolving Loan Funds
Revolving loan funds are targeted by individuals and very small businesses just starting out. These businesses may not qualify for traditional bank financing or may have no credit history. Viewed as an excessive risk for the lender, revolving loan funds look at farmers, artisans, and shops owned by individuals.
Organizations and affluent individuals aim to get new projects off the ground and establish a financial record for these young companies. The money is lent from a central fund. The borrower pays back to this fund to have access to more money.
SBA 504 Loan
If real estate investing is your dream, investigate the SBA 504 Loan. This underused resource provides up to $5 million for the acquisition of fixed assets. The program will loan money for buildings and machinery at rates below market. The owner puts up 10 percent, a bank lends 50 percent, and a certified development company lends the remaining 40 percent. The CDC must be organized under the 504 code. To qualify, the owner must employ the property for its own operations within one year.
Grants
When we consider a grant, we may conjure up research labs saving the world from incurable diseases. In today’s economy, grants are more varied. Small-business grants are available from the U.S. government as well as state governments. Grants are also available from large companies, universities, wealthy individuals, museums, art commissions, and more. The United States is a leading source of grant money for anything from personal microloans to major expansions for business. Head to the internet and discover a wealth of resources for grant money. If you apply for a federal grant, make certain you comply with all requirements.
You have a number of potential sources to investigate that can help you raise business capital. Study further to determine which one is best for your business venture.
