One of the most common reasons for a business becoming stagnant is the lack of capital. Starting a business, developing a loyal customer base is not enough for any business. For maintaining and expanding your business, having liquid capital is a must.
In most cases, small business owners have to deplete all their personal savings when it comes to growing or expanding their businesses. But in reality, there are a lot more options available. All you need to do is play it well.
5 Ways To Raise Credit For Business Expansion
Here I am with the 5 ways to raise credit for your business expansion. In case you are thinking about expanding your businesses but do not have enough capital, you can go with these 5 ways. This way you do not need to delete your personal funding for your business.
Crowdfunding Money For Business
In case you are successful in developing a fanbase, then crowdfunding can really be beneficial for you. It is the practice of raising fundings for initiatives or projects by asking for a little contribution from a large number of people.
As per the source, it has been seen that people and also several companies across the globe have raised an amount of $34 billion via crowdfunding. You can take help from some popular crowdsourcing platforms. You can try with UK Credit as well.
Offer Advance-Payment Discounts
Have you ever made an advance payment and got an exclusive offer or discount? You may get it when instead of monthly payments, you renew your subscription for a whole year in advance. You can implement this same thing for your business as well.
Suppose you are operating a professional service company, you can offer discounts for encouraging your customers to pay either quarterly, or half-yearly, or annually in advance. With a number of upfront payments, you will be able to collect a huge amount for the expansion of your business.
You may see it as a counter-initiative in order to increase the revenue by lowering the prices temporarily. But in actuality, a sale has the potential of increasing your volume so much that you may make more money than you would do without the sale.
When your business already has a built-in client base, this becomes more effective. Your client will not be able to resist themselves when they get products or services that they want at a lower price. And they will come and spend.
Working Capital Loans
At the time, when a loan might not seem like an immediate solution to raising money that you need for the expansion of your business, you are required to recall that all the loans are not of the same type. The working capital loan is one of them.
It will offer you a quick injection of capital when you need to grow. And that too without the hectic process of applying for a traditional loan. In case you are in business for at least six months, you will be eligible, and no collateral is required here.
New Revenue Streams
Seeking out new revenue streams beyond your business model is another way of raising money for your business. Suppose you are doing an information technology consulting business. You can offer complementary products or services that will attract your target customers.
Adding a new revenue stream can be exactly what you need to raise credit for expanding your business. You can add any service or product that will be a logical fit to the products or services that you are currently offering.
So, these are the 5 ways you can use for raising capital when you are thinking of expanding your business. You also can go for some other options like a term loan, angel investing, equipment and invoice loans, partners and venture capital, other bank loans, or government schemes that are available at that time.