How often have you discovered that you are running low on funds in your small business and that your knee-jerk reaction is to get a bank loan? But you are already servicing another loan and that will mean you have more liability than before.
Loans and more loans
It is a no-brainer that to sustain your business, you are bound to have some form of loan and you will get into a lot more predicaments if you continue like this. Banks will surely give out the loans as long as you are eligible but are there any other options available?
The good news is..
There are actually several options you can consider without having to ask the bank (or in some cases, loan sharks) for a loan in order to keep your business afloat. This will take some working but it will surely be worth your time and effort because you might not be in a long term commitment despite getting the money.
In countries like Malaysia, the SME industry makes up a majority of established businesses. This is further encouraged by many government bodies and independent parties who are more than willing to help out. They usually offer grants which means that if you get them, you are under no direct obligation to pay back. Grants on one hand helps a lot of SMEs and they help to keep your costs low. However, the main hurdle here is that grants might not cover all the expenses you need which means you might need to keep looking if you need more. But it’s a good start and definitely a good help.
The Venture capitalists
VCs as they are known are parties that help to fund new business ideas and emerging companies. They are very keen to invest in SME businesses because they would want to be there when the business flourishes. The catch here is that you need a good business plan and then present them to potential VCs. VCs usually track the progress of your business so that they know their money are well spent.
Get into partnership
If you can find someone who can partner up with you, then it surely helps. You can then split the cost according to the shareholding portions. The downside of this is that you would give up some form of ownership of your business.
Crowdfunding and crowdsourcing
Companies like PitchIN are among the renowned ones that can help you to get the funds you need from a large community. Basically, you give up some shares of your company to people who would be interested in your business but at least you need not have to inject a large capital outlay.
You could carry out a fundraising programme like selling of old and used items that your business no longer needs. Old stocks that are no longer relevant can be disposed for cheap. Or organize events that sell tickets to get the funds you need.
You can be as creative as you can in raising funds but the ultimate aim is to get rid of things you do not need in order to obtain the money you need without getting into a long-term commitment.