Finding financing in any economic climate can be challenging, whether you're looking for start-up funds, capital to expand or money to hold on through the tough times. But given our current state of affairs, securing funds is as tough as ever. To help you find the money you need, we've compiled this blog post on 3 financing techniques and what you should know when pursuing them.
#1. Get a Bank Loan
Lending standards have gotten much stricter, but there are still some that have earmarked additional funds for small business lending. So why not apply?
#2. Use a Credit Card
Using a credit card to fund your business is some serious risky business. Fall behind on your payment and your credit score gets whacked. Pay just the minimum each month and you could create a hole you'll never get out of. However, used responsibly, a credit card can get you out of the occasional jam and even extend your accounts payable period to shore up your cash flow.
#3. Attract an Angel Investor
When pitching an angel investor, all the old rules still apply: be succinct, avoid jargon, have an exit strategy. But the economic turmoil of the last few years has made a complicated game even trickier.
Here are some tips to win over angel interest:
Add experience: Seeing some gray hair on your management team will help ease investors' fears about your company's ability to deal with a tough economy. Even an unpaid, but highly experienced adviser could add to your credibility.
Don't be a fad-follower: Did you start your company because you are truly passionate about your idea or because you want to cash in on the latest trend? Angels can spot the difference and won't give much attention to those whose companies are essentially get-rich-quick schemes.
Know your stuff: You'll need market assessments, competitive analysis and solid marketing and sales plans if you expect to get anywhere with an angel. Even young companies need to demonstrate an expert knowledge of the market they are about to enter as well as the discipline to follow through with their game plan.
Keep in touch: An angel may not be interested in your business right away, especially if you don't have a track record as a successful entrepreneur. To combat that, you should formulate a way to keep them in the loop on big developments, like a major sale.