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News~ 4 Ways A Business Can Find Funding For Growth

2017-06-09 00:09 [INVESTING] Source:Netword
Guide:This article is published in collaboration with Scutify, where you can find real-time markets a

This article is published in collaboration with Scutify, where you can find real-time markets and stock commentary from Robert Marcin, Cody Willard and others. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

Starting a business is hard enough, but finding the capital to keep a business growing can be harder. Several potential funding sources exist, and each comes with its own pros and cons for feasibility. Professionals seeking a positive cash flow for their businesses should become familiar with the following four ways for funding business growth.

Online Lenders

While a loan from a traditional lender may not be the best choice for your business, you'll find more online lending options than ever before.

Small business lines of credit through an online lender are available, allowing you to borrow what you need up to an agreed amount. You pay the interest only on what you use. Your business credit score is less important when seeking a loan from an online provider, and online lenders have the added benefit of speed. When you apply, you can get approved and have access to funding within days. These attributes have made online lenders increasingly popular in recent years.

Traditional Lenders

If your business has a strong credit profile, you can apply for a loan from your local bank. Banks make small business loans based on risk. Unfortunately, traditional lenders can consider some small businesses to be too risky for loans.

The Small Business American Dream Gap Report found that only 36 percent of small businesses that seek a bank loan get approved. Another option is a loan backed by the U.S. Small Business Association (SBA). SBA loans are more forgiving in terms of credit scores, but competition is stiff and the processing time is equal to that of a loan from a bank.

Venture Capital and Angel Investors

Although generally associated with startups, venture capital firms and angel investors can offer a funding boost to small businesses looking to expand. These investors are generally less risk-averse than Financial institutions, although they may seek a controlling interest in your business in exchange for their investment.

Venture capital is not the investment behemoth it once was. Venture capitalism peaked in the 1990s and has dwindled as an industry force ever since. Angel investors remain widely available. When approaching these types of investors, presentation is even more important than when applying for a bank loan.

Crowdfunding

Crowdfunding is a way to attract a group of individual investors instead of attempting to find funding from one source. Many crowdfunding websites are available, although each has its own rules for processing fees and target amounts. A compelling marketing strategy is key to cut through the noise to attract investors and persuade them of your viability. If you can tap into it, however, crowdfunding can prove a near bottomless source of funding. A recent study by the World Bank predicts a global crowdfunding investment potential of $96 billion a year by 2025.

Professionals who want to grow their business will find many funding options available, each with its own risks and rewards. As with all other areas of business, funding decisions benefit from research, deliberation, and presentations that demonstrate the best possible version of yourself to potential partners. Before you choose a funding option, make sure to thoroughly outweigh the costs and benefits to ensure you're getting the best option for your small business.

This article was written by Adam Monson for on .

This article published in collaboration with Scutify, the best app for traders and investors. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

, Investor, retirement, Professional Finance, Suze Orman, retirement

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