How Business Owners Can Raise Money For Their Businesses
Without money, there is no business. Whether it is a startup or a business that is already running, you will need to money. Even men as rich as Bill Gates still need money to expand their business empire. Therefore, it is in your interest as a business owner to know how business owners can raise money.
Many people will automatically think that you have to go to banks and to loan agencies if you need to get money for your business. Well, that is not always the case. I’m here to show you something different.
Related: How business owners can protect their businesses with these social media security tips
So, if you want to know how to raise capital for a startup or how to raise capital for the business in Nigeria, how to raise money for a business without a loan, capital raising process or how to raise capital for business expansion, you should read on.
I’m going to tell you something that you may know but may not have considered and trust me, they are viable options especially for startups and small businesses.
It is all about how business owners can raise capital for their businesses today. just sit tight and let us take a ride.
Related: 6 ways to raise money for your startup business
How Business Owners Can Raise Money
-
Payment advance
You can ask for an advance. It is how business owners can raise money. The money is usually from clients who will make orders for goods and services. This usually happens when the product or service will take some time before full delivery.
You can ask your client to pay between 40-60% of the agreed price and you can use the money for running the production and delivery. It is one of the fastest ways to make money for running your business.
-
You can get credit from suppliers
Most businesses will require that you get products (raw materials or finished products) from suppliers before you can execute your business. You may find it difficult to handle the money you will pay them especially if you have a low financial capacity at that time.
But don’t worry, you can get credit from your suppliers and you pay when you have sold the goods. That way, you can have some money to execute your business.
However, you will need the supplier to trust you. It has to be someone you have been purchasing from for a long time. It is not usually open to startups as they have no history with the suppliers.
At the end of the day, you can boast of having goods to sell and you did that without much financial commitment.
-
Microloans
Microloans are usually gotten from microfinance banks. They most times prefer to deal with business owners who are salary earners so that it will be easy to recoup their money. They can give you a loan for your business without undue stress but it won’t be very huge.
When you are a business owner who doesn’t earn salaries, you can still get loans from them but it will require you to hand over certain documents to them. You should rejoice because it won’t be as strict as the normal banks will demand from you.
This is my favorite option. This is how business owners can raise money. It requires getting a campaign on through video and text campaign on the business you want to start and enlisting the help of the masses. You don’t go to a single investor but to everyone who will care to listen. It is particularly suitable for startups.
People can support your business with any little thing they can offer. This is particularly popular in the western world and so much money can be raised using this process.
It is still at the starting stage in Africa but the potentials are high.
Related: 5 easy steps to crowdfunding success in Nigeria
-
Purchase order financing
According to stan “Some organizations specialize in providing finance to people who have been given a purchase order to supply a certain product or the other. Banks also finance purchase orders but usually have difficult requirements for the business owner, like a collateral worth 110% of the value and much more.”
Therefore, when there is a purchase order from someone who has a history of paying on time or can raise a bank guarantee, you can get most purchase order financiers to fund your supply.
