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3 Ways To Raise Money for Your Small Business

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If you are starting your new business or have done business for more than a decade, adding more capital into your business often results in a better bottom line. Today, there are a number of different sources that help you raise good amounts of money for your business. As a merchant you may have a good number of choices for raising money, but there are lot of short and long term factors to consider before contacting any source for funds.


To make it simple for merchants, here are some effective ways to raise quick money for your small business.


  • Crowd Funding – Though a new concept but gaining popularity among businessmen for raising money for their businesses. There are crowd funding websites like fundable, Indiegogo and kickstarter that can help you raise money.  Most of these websites follow a reward based model in which the people funding the businesses receive a form of reward, usually in the form of product or service offered by the business in the future. Some sites also allow equity based funding like fundable.


  • Loans and Credit Cards – Credit cards often act as providing a short term finance for your business until you find a more affordable and long term source of funding. The interest rates on credit cards are comparatively high, so it is a last choice when you cannot find any other source of funding. Similarly, one of the most traditional forms of raising capital for small business is loan from the bank. Long term loans allow business owners to return the amount in 10 to 20 years. A substantial down payment and good credit history can make you pay low affordable monthly installments.


  • Venture Capital – Another good way of funding small business is finding a venture capitalist. The venture capitalists invest in small businesses that look promising. In return, they receive equity in your business. Your business must show a good potential of growth to find a potential venture capitalist ready to provide funds. Unfortunately a large percentage of businesses receiving funds from venture capitalists often fail, so investors are becoming more watchful deciding about the business to invest their capital in.


Beside these popular and easy ways to fund your small business, there are number of other options including business partners, small business funding, second mortgage, small business loans, bank financing, family and friends, microloans, leasing business equipment, asset-based loans, private loan guarantees, etc. You need to research in detail for every option as there are different long term and short term factors involved that might go well with your business or not.