After starting your business and operating it for some time, now it’s time to take your business to the next level, but this growth takes money. Fortunately, now that you are classified as an existing business it’s potentially easier to get financing. This is because you now have some established financial history, so you don’t pose as big of a risk to lenders.
However, you should carefully study all of your alternatives to ensure that you receive the best deal. Understanding the financing options available to a business is critical to establish a business that continues to grow over the long term. The alternatives are primarily determined by the amount of money you require to develop your company.
Some small companies grow organically through word-of-mouth, but for the majority of businesses, you’ll need to invest some money to bring new customers. In addition, as you grow you will see development opportunities that you want to act on, so you want to be prepared for the investment that may be required. This is why many business owners choose to get financing for their growth plans.
There are some steps you should take to successfully receive the required funds for your business growth:
1- Financial planning and creating a plan for your growth
We have talked about the importance of a business plan for running a business. A significant portion of this plan should be devoted to how you will grow the business. Your growth plan should include a clear description of the company’s existing strengths, weaknesses, and prospects, a three to five-year vision for where you want your business to be, and a strategy for executing your vision, including who will do what and when.
2- Define how much financing you need based on the plan
Every business has unique requirements, and there is no single solution that fits all financial needs. So, it depends on your business, you should see how much you will need to take your business to the next level.
3- Talk to your financial partner about your plan and what you need
Having a trusted financial partner is a must for any successful business. At BPF Solutions, we provide a myriad of financing solutions designed to help you with funding as your business grows. So, we can create a financial plan exclusively based on your business that aligns with your business plan and provides the financing you need to move forward and be successful.
Ways to finance your growth
There are typically 3 ways that you can get the required funds for your business growth.
Self-funding can take the form of borrowing money from family and friends, using your savings account, and so on. It has advantages and disadvantages as you have full control over the business, but you also take on all of the risks. It is very important to spend not more than what you can afford. So, talk to your accountant or financial advisor first before thinking of self-funding.
• Financial Institution loans
If you want to grow your business, but don’t have enough money in hand, consider a small business loan from banks or credit unions. You should have a business plan, expense sheet, and financial projection for the next five years to improve your chances of getting a loan. These tools will help you figure out how much money you’ll have. Once you have the documents ready, ask banks and credit unions for a loan. The key things to watch for are the contents of the application and the structure of the deal. Many small and medium-sized businesses are being declined or underfunded by banks especially because the loan proposal does not meet their principles and standards, this is where we can help.
• Non-institutional loans
Non-institutional lenders usually have more flexible terms and sometimes fewer requirements than institutional loans. The approval process can be faster and they may finance a project that can’t be funded elsewhere. But their rates are typically higher.
How to find a lender who accepts to fund you
If you have trouble getting a traditional business loan, you should seek advice from financing experts. At BPF Solutions, we know the exact requirements of each lender and prepare your proposal based on their requirements that guarantee your fund.