How to Attain Growth Capital for Your Business
Many small businesses require an infusion of capital to avoid stagnation and spur growth. Although owners may hesitate at the prospect of taking on debt or sharing equity in their company, without funding their businesses may not survive. Here are some options to consider when you need to acquire growth capital for your business.
Invest in Your Own Business
Outside financing often serves as a supplement, but owner investment in small businesses is generally crucial to the survival of their companies. Potential investors are encouraged when owners show enough confidence in the companies they have created to commit their funds when necessary.
Take Out a Loan
An advantage of obtaining growth capital through a traditional bank loan is that banks do not expect a share of equity and make no attempt to tell you how to spend the funds. However, once your company has taken on a loan, you are saddled with regular payments regardless of the state of your business finances. Sometimes these payments may become burdensome and hinder company growth.
Obtain Venture Capital Funding
Venture capital firms seek out promising new businesses in which they can invest on their clients’ behalf. They are often willing to invest significant amounts of money in companies that they perceive as having great growth potential. However, these firms take an active interest in the direction of the business and will often insist that their representative should have a place on the company’s board.
Attract the Attention of Angel Investors
Angel investors also venture capitalists, but instead of firms that assist clients in finding investment opportunities, they are individuals or small groups that seek out businesses that interest them and show potential. They may also want a place on the board and a voice in the company’s direction. Often their connections with suppliers and customers can provide significant assistance in business growth.
For more advice on obtaining growth capital for your business, get in touch with TCF Capital.