Need Money Fast? Here Are 5 Options Business Owners Can Explore
Most businesses generally have problems raising funds to either start up, maintain their operations, or expand. This difficulty causes many to die out at varying stages of their business growth because they couldn’t get the money they needed to sustain and expand their operations at that point in time.
But what if there were other ways you could raise money fast to grow and maintain your business operations instead of always running to the traditional banks, investors, family, and also friends?
To find out what they are, we’ve detailed 5 options business owners can explore to raise money fast:
1). Payment Advance:
One way to raise money is to get a payment advance from the client. If you sell a service or product that requires a bit of time before it is fully delivered, asking your clients for a 40% to 60% payment advance will be the fastest way for you to raise money to execute the service they’re paying for.
2). Credit From Suppliers:
Purchasing products for resale from your supplier can be expensive, especially when you have little to no cash to buy any more products.
If you have a supplier you’ve been purchasing consistently from for a long time, you could approach them to offer you some of their products either on credit or as a dealership. If they trust you as one of their most committed customers, they may consider your proposal.
This way, you’d have products and services to sell to your end clients by making little to no financial commitment.
If you run a side business but still have a 9 to 5 job, you could approach microfinance banks to give you a loan for your business because they mostly prefer to give salary earners since the money could easily be recouped at the end of the month.
If you instead run a business and want to get a loan from a microfinance bank, you may need to talk to them to know the options that are available to small businesses like yours. But no matter what they bring your way, it is mostly never as strict or ridiculous as what traditional banks request for.
Crowdfunding is a popular way to raise money in the western part of the world. It is done by releasing a video and text campaign about a particular business, product, or service, and having a lot of people back the projects by supporting with a token sum.
Some people may support your business with anywhere from $5 to over $200, and many times over, several entrepreneurs have been able to raise millions of dollars from crowdfunding campaigns.
Crowdfunding is still in its infancy in Africa, but nonetheless, people still run the campaigns even if the results are minimal.
5). Purchase Order Financing:
Some organisations specialise 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.
If you have a purchase order and the client either has a history of paying you on time or is willing to raise you a bank guarantee, then most purchase order financiers may fund your supply.
What are your thoughts on these 5 ways to raise money fast for your business? Let me know by leaving a comment below.