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.
Government grants
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.
Looking for investors? Below are the top investors in Malaysia
Do you have a business idea that you want to commercialize but has no funds to do so? Have you been working on a business plan which you are confident will work but has no idea who to ask? There are actually a lot of parties across Malaysia who has the funds or monetary means to help your business grow. All you need to do is to look in the right places.
Entrepreneurship Organisations and Groups
One of the platforms you can explore is to communicate with groups or organisations that are involved in entrepreneurship. These groups are usually quite closely knitted and they are formed by people who are passionate about helping businesses start. Among them are:
- Entrepreneurs’ Organisation – EO Malaysia is the local chapter of this international network of entrepreneurs. Besides offering assistance and funding options, EO Malaysia helps to nurture and educate business ideation and other processes.
- GMB Young Entrepreneur Organization Malaysia – GMB Malaysia is a growing organisation which is involved not in the entire process chain that facilitates growing of business ideas, funding and other stages
Angel Investors first step
One of the first places you should look into is through angel investors. They are not the same as venture capitalists. Angel investors usually help a business to start at the beginning while VCs are more into investing into the business and then watching it grow to mature.
Among the angel investors you can find in Malaysia include:
- Cradle Fund – Known for its CIP or Cradle Investment Programme, it has helped many entrepreneurs and business startups, particularly in the technological field to commercialize their businesses.
- Malaysian Business Angel Network – This is the official agency that brings together angel investors to help them grow collectively.
Venture Capitalists and Crowdfunding
Besides the 2 main investors mentioned, you can opt to look for other parties who can propel your business to greater heights. This includes:
- 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.
This includes the government-related MavCap which basically is the largest VC company in Malaysia. Others include Venture Capital Asia-Pacific, 1337 Ventures, CAV Private Equity and many others. - Crowdfunding(as above) – This is perhaps one of the more popular funding options around today. Malaysian crowdfunding includes the likes of pitchIN, MyStartr, Kickstarter, IndieGogo, GoFundMe and many more which are starting to enter the market to get business ideas off the ground.
There are actually a lot of options available in the respective areas if you are looking for a reliable organisation. What you need to do is to work on a good business plan and present them. Some of these organisations actually help you to design a compelling business plan that works too.
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.
Raise Funds
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.
