If your small business is successful, you might be considering how best to grow from here. Whether you want to open a second site, expand your product range or take on more staff. Expansion can be expensive but can be well worth the investment. If you’re ready to grow, but aren’t sure how to fund this growth, try some of these ideas.
- Look for specialist financing. There are some companies that offer finance options for specific industries, such as a medical finance company that will lend money to medical businesses or professionals. This kind of funding can be used towards expansion or new office space to help you grow.
- Get a loan through the bank. There are lots of loans out there available to business owners. Most business owners are aware of the loans available to get their business started but don’t always think of similar options when they’re ready to expand. If your finances are in good order, a loan could be a good way to find the money to help you grow.
- Look for angel investment or venture capital funding. Angel investors are people who invest in new or growing businesses, usually in exchange for capital. This money can be a godsend for a business that is stuck at a small size and needs help to grow. Just make sure you’re prepared to offer capital or shares in your business. To secure this kind of funding, you will likely need a solid business plan to show how you plan to achieve the growth in your business.
- Explore crowd-funding. Crowd-funding can be incredibly successful for business with a loyal customer base. Businesses like BrewDog have been able to raise millions in order to grow their business. Crowd-funding works by offering rewards to the general public who buy into different tiers of support. You could offer everything from free merchandise to shares.
- Try for a government grant. Some governments and other organizations offer grants and financing options that won’t leave you with debts to pay afterward. Most grants are intended for start-ups, rather than established businesses, but there are some options out there if you persevere.
- Ask friends and family for loans. Shorter-term loans from family and friends are usually simpler to manage, as there’s no bank to approach, no complicated terms to meet, and usually lower interest. If you do choose this option, make sure you do properly lay out the terms of the loan, especially when determining the terms of repayment. This lowers the risk of causing resentment or arguments later on if one of you feels the other is taking advantage or is being unfair.
- Use your overdraft. If your bank has a generous overdraft facility, then this can be a potential option for short-term borrowing. Just be aware that an overdraft can come with hefty interest fees, so it could end up costing you more money in the long-run. This is a better option for smaller amounts of money, for example, to fund marketing campaigns than larger amounts for expanding to a second site.