7 Effective Ways Businesses Can Raise Capital


By: Raymond James


About the Author:

Ray is a sought after thought leader and an expert in financial and money management. He has been published and featured in over 50 leading sites and aims to contribute articles to help novice financial planners. One of his goals is to impart his knowledge in finance to educate and help ordinary people create and achieve their financial goals.


There are various times that the economy slumps for one reason or another. It is during these times that many businesses find themselves in need of additional capital to weather the storm and continue essential business operations like meeting payroll obligations. In this article, I will discuss 7 alternative ways businesses can consider when raising additional capital.




Due to the extensive use of social media in today’s society, crowdfunding has become a trendy way for entrepreneurs and business owners to raise capital. Traditionally businesses in need of capital would contact their bank or lending institution to inquire about options. Crowdfunding is exactly the opposite of this. When crowdfunding, business owners raise capital through individual investors such as friends, customers, other business owners, family, or even employees. This type of funding gives the business owner a large pool of potential investors. The key to success in this area is having access to a large network of potential investors to view your business pitch. This access is possible through social media or crowdfunding platforms.


Business Loans


These loans for business owners are usually under $50,000. Most of these loans typically do not exceed $25,000 and could be tailored to specific businesses. Many businesses that offer these loans also have a same day response service for applicants and can tailor the loan to the needs of the business owner. These loans are offered by a variety of companies and are great for individuals who might have lower credit ratings and many companies offer zero interest for a set period of time, fixed fees, and flexible terms.


Cash Advance


If you accept credit cards or have account receivables at your business, you can raise capital by selling your future credit card sales or getting funding against the receivables. This is called a cash advance. It is essentially a short term loan and the loan amount depends on your credit card volumes. These types of services are usually provided by merchant account companies. They may also be available from your digital payment processor. The application process for this type of financing is usually quick and easy.




Bartering is not exactly raising capital, but with bartering, you are able to acquire the goods and services that you would acquire if you had the capital. Bartering is simply the exchange of goods and services between individuals or businesses. It is a great way to conserve capital, get the goods and services you need, and build a network of individuals that may be additional sources of capital in the future. For example, the owner of a printing company can offer print services to a building contractor for repairs needed at his business.


Enter Contests


There are an increasing number of startup contests available for entrepreneurs. These contests are usually initiated by angel investors looking for the next big idea. They are designed to encourage entrepreneurs and business owners to set up their own businesses. In most of these contests you have to present an elevator pitch (10 minutes or less) or business plan to a panel of judges. There are some contests that will also ask you to demonstrate your product or service and its viability. Whatever you do, the goal is to convince the judges that your business is worth giving money to.




If you business is visible to other corporations and you have a strong brand, corporate sponsorships may be another route you can go to increase your capital. You can use various means such as blogs and your website to solicit corporate sponsorships. You can also create a community event and sell sponsorships to other companies. This will increase community presence and possibly business.


Rent Your Equipment


If you have equipment in your business that is not being used, extra capital could be gained from renting the equipment to another business or individual. If the equipment is not in use regularly. This is a great way to earn extra money.


This is not an exhaustive list. Business owners with creative minds will be able to come up with many innovative ideas. The sky is the limit. Good luck.