5 Small Business Funding Options

SMEs today exist in a new economic landscape that forces alternative sources and forward thinking when it comes to financing. Small and medium businesses have traditionally been the key driver for economic recovery when it comes to hiring, but hiring requires working capital, and capital can be hard to come by.

Finance options are more accessible today than in the past where only traditional methods were available, but the right option for your business depends on your business model, projections, and how well you can sell yourself to potential financial partners. Whether you are a start-up seeking initial seed capital or an operating small or medium business looking for money to grow, you have to be flexible, remain positive, and stay vigilant in your efforts.

Here are five ways to get started with funding your small or medium business:

1. Accounts Receivable Financing

An accounts receivable line of credit is a credit facility secured by the company’s accounts receivable (AR). The AR line allows you to get cash immediately depending on the level of your accounts receivable, and the interest rate is variable. The AR line is paid down as the accounts receivable are paid by your customers.

2. Crowdfunding

Launching a crowdfunding campaign is a popular funding tool that utilises technology to facilitate the connection between companies seeking capital and investors seeking growth for the capital that they have to invest.

3. Angel Investors

Angel investors are wealthy groups or accredited individuals who invest their own funds into companies in exchange for equity ownership. Angel investors typically look for a higher rate of return than would be given by more traditional investments.

4. Venture Capitalists

Venture capital (VC) is a form of private equity that provides capital to an early stage to an emerging firm with high growth potential in exchange for equity in the business. This could be for medium businesses that wish to expand but do not have access to large sources of funds.

5. Friends and Family

Supportive friends and family could be a flexible and viable way to raise finance for your business that could be a loan or equity partner. The advantage is that they may offer loans without interest or security and a longer repayment plan.

>> Is your business in need of fast, short-term financing? Do you need to access cash faster than your customers pay you?

Populous World is an Invoice Finance provider that unlocks working capital for UK medium businesses.

Bridging your business’s cash flow gap is something that Populous World excels in delivering, providing you with the funding tools to grow and sustain your business.

For more information, visit us or contact a member of our funding team:[email protected]

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Disclaimer: Populous World does not offer investment advice and nothing in them should be construed as investment or financial advice.