Business Financing 101: The Ultimate Guide

If you want to finance your business but don’t know where to start, you have landed in the right place. As the title states, this guide is all about the basics of business finance. No longer will you have to search for the best ways to fund your startup or company expansion.

Selecting the right finance option is important for your business. Get it wrong and the rest of your plans might crumble. If you attain the right funding at the right time, however, your company could flourish.

How to become more fundable

Before looking at financing methods, it’s important to recognize how to better position your business for receiving capital. By employing the following points, you have a better chance of securing the best deal possible:

• Don’t wait until the last minute: If you start early with your finance search, there will be more options available. One big mistake business owners make is to wait until they require the money before seeking funding.
• Improve your credit history: This doesn’t just mean your business credit – personal credit history will also come into play when attempting to secure financing. The better your score, the better deals and interest rates you’ll gain.
• Don’t go for the first choice: If you search around various different lenders or funding methods, you will likely land a better deal than if you simply go for the first one to grab your attention.
• Display financial understanding: If you boast a solid grasp on the financial records and forecasting of your business, lenders will usually be more confident in giving you a loan.

Now that’s out of the way, here are three of the best business finance choices available:

Business loans

As far as traditional financing goes, gaining a business loan from a bank is arguably the best. You receive the lump sum pretty much immediately, and it is provided with competitive interest rates – especially if you have a strong credit score.

However, gaining a business loan from a bank is difficult. If you have been turned down, check out Biz2Credit. This specialist business loan company has all the positives of a traditional bank loan, just with greater approval numbers.

Crowdfunding

The crowdfunding craze shows no signs of disappearing yet. Since it exploded in popularity over recent years, crowdfunding has become a viable method for many businesses to get off the ground.

If you have an innovative business idea or a new product that will be received favorably by your current customer base, crowdfunding is a perfect option. Beware though that it’s a lot of work and a great deal of marketing is required to turn any campaign into a success.

Credit cards

If you don’t need to raise a large amount of cash for your business, credit cards could actually fit the bill. This is particularly the case if you can sign up for credit cards which offer an initial 0% interest free period.

With that said, 0% interest only works if you play it to your advantage. If you pay off all debts during the interest free period, there are obviously no additional expenses to cover. However, if you leave it too long, suddenly that interest will be applied and costs begin to increase.