Negosentro | What Is Financing And How It Can Benefit Your Business | Whether you’re a start-up business or have been chugging along quite nicely for a few years, at some point you’ll require a form of financing to help with your growth. It’s important to be aware of your repayment terms and find a lender that’s right for you. You also need to check your business credit score, as this can have an effect on your application being approved. However, even if you do have a less than desirable credit rating, there are loans for bad credit available. Let’s explore the different financing options for your business and how you can benefit.
Business Overdrafts
An overdraft in your business account may be suitable if you’re wanting flexible financing. There are charges for the interest based on how much you go into the overdraft, but if you’re not looking for a substantially large amount of money, this could work for you. You have more control over how much you borrow with an overdraft, and you’re not tied to lengthy repayment contracts either. This means you can work within the means of your business and not worry about large debts at the end of each month.
Investor Financing
If you decide to split the equity of your business up in exchange for financing, you may be able to acquire larger amounts of money for your business. However, you do lose some ownership of your business, so you’d need to be prepared for that. One major benefit is that you don’t have to repay the money back. Instead, the investors will make money from the shares they hold in your business. Depending on who your investor is, if they’re knowledgeable of the business sector, any advice they provide you with is priceless.
Business Credit Cards
Like a business overdraft, having a specific credit card for financing can be beneficial. Not only will you build up your business’ credit score, but you can also use them for the day-to-day running of your business or use them in emergencies. However, some credit cards won’t let you use them to start up a business, you can only apply once you’ve got your business established. A credit card can be a great option for your business if you’re looking to have easy spending at your fingertips.
Business Loans
A business loan is one of the most popular ways to fund your business. These loans are specifically for you to use on your business and offer a lump sum in one go. You also don’t lose any equity in your business to the lender, and you can pay them back over a longer period of time, which is perfect when you’re still trying to break even. Unlike a credit card, you can use your loan to actually start your business and use it as a means to get your ideas off the ground. Some loans also offer a scheme where you can withdraw the money you need from the lump sum, and only pay interest on what you’ve used.
It can be hard to get your business going without some form of financing and there are plenty of options available to help. By taking time to plan how much you need and what you need it for, you’ll be able to determine exactly what type of finance is right for you. By investing in your business, success won’t be unreachable.
