For many people, the idea of borrowing money is a scary though. It’s not something they would want to do. Having a lump sum of money from someone else, which you then have to pay back, can put many people off looking for business funding. However, trying to set up a business without it is a bad idea. Just look at the statistics: the figures for small business loans show applications are increasing year-on-year . If this many businesses are doing it, there must be a valid reason why. From covering initial start-up costs, to paying wages for employees, it’s hard to run a business without a lot of capital.
Give yourself the best shot at success
If you want your business to do well, you need to invest in it. To invest in it, you need a lot of money available. If you don’t have all the normal features that people expect from a business – a website, employees and resources to do the job – then they won’t trust your set-up. You need to look and act like a fully functioning business, even if you’ve only just started. So, use business funding to get on the right track. Have a website professionally built, and create your products or deliver your services in the highest quality possible. If you don’t, then you’ll be fighting an uphill battle. If you don’t have the resources you need, or you buy cheap versions, you’ll constantly be at a loss. If you don’t have a website, people might not think you’re a real business. If you can’t afford to pay other people, you’ll only ever be able to do things that you have skills in.
Don’t just look at loans
If it’s the idea of taking out a loan that’s putting you off, then you need to start looking elsewhere. There are many other viable options open to you if you don’t want to take a bank loan out. From finding a partner to securing funding from a venture capitalist, there are many options that aren’t as daunting as a bank loan. Another route you could try is a merchant cash advance. You’ll still get a lump sum of money, but you won’t need to provide collateral like with a loan. Plus, it’s regarded as a sales transaction, so won’t affect your credit. It’s a quick, easy way to get funding, and your repayments will change depending on how much money you earn.
Think about the future
Even if you don’t need any capital right now, it’s likely that you will do in the near future. Your business might not need anything more than a laptop and a phone for now, but as you grow, you’ll need to do everything from acquiring more resource to hiring new employees. Similarly, you want to be in a good position to be able to grow and expand, without being worried or confined by costs. If a huge opportunity comes up, you should be free to take it – no questions asked.