While COVID-19 is taking the world by storm, many businesses are struggling. Especially in the new world order dominated by social distancing, the old saying “you’ve got to have money to make money” can be true. Even if there are particular sectors offering an exception, during these unprecedented times, it’s particular hard for the majority of companies to keep their businesses running and productive (and their employees safe).
Of course, for existing businesses, cash flow is a top concern in the current environment as they need to accelerate their sales cycles and handle expenses. But, coming back to old sayings, more than before, they need to get money to start and restart earning money.
Given the above, beyond contingent solutions, there are a handful of ways for new or existing businesses to get the funding they need to launch or keep their businesses running and productive.
Below, there are some solutions you can use to get the business off the ground!
1. A Business Loan
It would be nearly impossible to rattle off a list of ways to get business funding without mentioning commercial lending as one of the top options.
A business loan works much like a personal loan. The number of options available to you will largely depend on your business’s credit rating. That’s not to say that having poor business credit disqualifies you from getting a business loan.
Many lenders will consider businesses with less-than-perfect credit, and many will even consider your personal credit rating instead.
Using the Federal Reserve’s latest data, ValuePenguin has valued the average small business loan at $633,000. That’s a pretty huge chunk of funding for most businesses!
Of course, the terms and interest rate of your loan will largely depend on your business’s credit history and age; but it’s worth noting that interest rates have been very attractive in recent times.
You can scour the web for different lending options, or you can take advantage of a resource that pools potential lenders for you and allows you to compare interest rates and terms in one place!
2. Start a Crowdfunding Campaign
Especially if you already have a fantastic product or cause to champion, you might be able to go the crowdfunding route and raise all of the funding — or at least a significant chunk of it — needed to get your business up and running.
In the simplest terms, crowdfunding is the act of getting financial support (typically relatively small amounts) from multiple people to raise a large sum of money in total.
This is an especially effective method for startups and small businesses that need significantly less capital to get going.
Of course, the idea of crowdfunding has been popularized through sites such as GoFundMe and Kickstarter.
These sites allow businesses to create campaigns that can be shared online and circulated amongst friends and family. Typically, businesses will post tier-based “rewards” that promise products and perks to donors once they become available.
However, your crowdfunding doesn’t even have to exist online. It can be as simple as generating support from a handful of different of connections or local businesses!
3. Partner with Investors
If you’ve got an excellent business model and a product or service that has already been proven in some capacity, partnering with an investor (or multiple investors) is one of the quickest ways to get your hands on a large sum of money.
Of course, this partnership usually doesn’t come without a sizable offering from your end. Typically, you’ll need to be willing to part with equity in your company or royalties on sales. You might even need to agree to have the amount paid back to your lender within a certain timeframe.
Whatever the details of the terms, it’s worth noting that investors often bring more to the table than just their money. You may be able to get access to their resources, connections, and ideas — benefits that could very well launch your business ahead of its initial trajectory!
4. Consider Bootstrapping
Want to raise funds with little to no work involved? Consider using your own capital to give your fledgling business the financial boost it needs.
Particularly if this is your second, third, or fourth business venture, you may be able to lean on your other businesses or personal savings to completely fund your new endeavor!
While many consider bootstrapping to be a pipe dream, it’s worth noting that a whopping 77% of small businesses are made financially viable through the use of personal funds.
Perhaps the best part about bootstrapping is this: you get to use money on your own terms. In other words, you won’t have to part with equity in your company or agree to an unfavorable lending agreement.
Instead, you’ll have quick access to what you need, whenever it’s needed, without putting yourself at a disadvantage!