If your company needs to raise operating capital, then you know it can be a real struggle. Often financial institutions may not share your vision, so they will not loan you any more money. Here are some ideas to raise operating capital without taking out a traditional business loan.
Crowdsourcing allows you to ask your friends, family, and strangers for help in raising the necessary money to operate your business. You need to think about the angle that will work best to get people to agree to give you their money. You may even want to offer them some type of bonus in return for the use of their money. The great news is that money raised from crowdsourcing almost never has to be paid back.
Think About Angel Investing
Most angel investors are focused on helping a business take those expensive first steps. According to the United States Securities Exchange Commission, angel investors must have a net worth of at least $1 million and an annual income of at least $200,000. In exchange for the use of their money, most companies pay angel investors a return on their money between 20 and 30 percent. Most investors want to see a clear exit strategy where they will at least get their money back if the company fails.
Sometimes a move helps businesses to raise the capital that they need to operate. With the help of a moving company, some businesses might relocate their office to a neighborhood where they can get lower rent or can buy property cheaper. Others might do so in order to sell their current property and use the money for capital outlays. They may also switch locations for the purpose of having access to a much more profitable customer base.
Study Development Grants
Some cities and states have development grants that you can use to relocate your business to a particular region. There are many different types of grants available that your business might qualify to use. Enterprise grants often help a business acquire new property and train employees. Opportunity grants often help a city organize a new startup facility. Study the possibilities before seeking a grant as the paperwork can be lengthy.
You may have customers who are willing and able to lend you the money that you need to operate. In exchange, they may want a part of your future earnings until their money is paid back. Some customer lenders may want you to sell them goods and services that they need or want at a reduced price. Others may want to own part of your business. Think about the consequences and come up with a plan before approaching your customers.
Use these ideas and your own creativity to create a plan allowing you to raise the money that you need. While it may hurt a little in the beginning, the result is often worth the cost.