Are you looking to expand your business operation? There’s a wealth of funding support methods out there for SMEs, from crowdfunding sites to investors and loans.
Below are the top five signs your business is ready to seek business funding.
You’re ready to increase the size of your workforce
One of the most common reasons for seeking additional business funding is the need for a larger workforce. By increasing your workforce, you also increase your salary bill – but that shouldn’t put you off the idea.
Crowdfunding is a clever and intuitive funding method that could help you to grow your business. Members of the public can choose to pledge a donation to your cause. The funding is then released once you hit your target.
Top tip: Crowdfunding often works on a reward scheme basis, so be prepared to offer something in return for the funding support.
You’ve outgrown your existing business premises
Perhaps you’re looking to move to a bigger office space, or want to relocate to a more central office in the city? Have you considered a home equity loan?
If you’re a homeowner who has some equity (the value of your home minus the amount you owe), a home equity loan could be the perfect business funding solution for you.
Top tip: There are significant risks that go alongside a home equity loan – you could lose your home if you’re unable to pay your loan. Make sure you can afford the repayments before opting for funding.
Keeping up with the demand for your product or service
For a business to be successful, they must be able to keep up with the demand for their product or service. Failure to do so could cause major financial setbacks.
Depending on your industry, this may require you to hire additional staff or to seek more new equipment, both of which can be costly.
If you’re business is doing particularly well, you may want to seek out an investor to fund part of your business in exchange for a stake in your company.
Top tip: When seeking investment, remember you may have to give up a percentage of your business. Decide on a viable figure and negotiate the amount.
You need financial help and mentoring
If you’re planning to develop your business, you might want to consider additional financial help. A government-backed Start Up Loan could be the answer. You could receive a loan of up to £25,000, plus free business mentoring and advice.
Loans and support are available for businesses yet to launch or those that have been trading for up to two years.
Top tip: Your business mentor will help you to create a detailed business plan and cash flow forecast to aid your application for a Start Up Loan.
You’ve spotted a new industry or untapped business sector
As business owners, we’re constantly looking out for the next big thing. If you’ve discovered an untapped area of the market, you may want to capitalise on your discovery.
Business grants are often offered to new start up companies seeking to fulfil a certain purpose.
For instance, a grant may be offered to a company that makes children’s toys from recycled materials with a view to cutting our waste usage.
Top tip: Make sure your business meets the qualifying criteria for any grant you’re planning to apply for. Speaking with your local Citizen’s Advice Bureau (CAB) can help identify the grants your business is eligible for.
Elsa Caleb is a financial adviser at the Start Up Loans Company.