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Fuelling growth: The whys & hows of small business funding.

Types of Business funding for SMEs

There are plenty of good reasons why a small business would need funding. The biggest reason your employees want you to secure business funding might be because they want a new state-of-the-art coffee machine. However, as a business owner, you are probably thinking more along the lines of expansion.

Unfortunately, things do tend to get a bit more complicated when it comes to choosing the type of funding, as there are more than a few options available to you.

To simplify things, let’s take a look at:

The main types of business funding

Equity financing

Large, well-established businesses often make use of equity financing if they need to fill their coffers. Equity financing usually provides these companies with the capital they need to fuel growth or expand their operations.

Equity financing also comes with the added bonus of expertise and guidance. Equity investors usually provide strategic guidance and industry insights to help a business make informed decisions.

However, this route is often unavailable for small businesses, as you need to be in a niche that commonly experiences rapid growth. You also need to be able to attract the attention of investors.

Debt financing

Debt financing is by far the most common type of business funding and is used by businesses large and small across every industry. It includes things like conventional bank loans, credit lines, merchant cash advances and online lending.

Standard bank loans are a good option for small businesses or pretty much any other business looking to expand. You know exactly what to expect with a bank loan, as there is a fixed interest rate and repayment schedule.

Crowdfunding 

While successful for some, crowdfunding won’t be a good option for every business out there. You’ll need to be able to offer something in return to the people you hope will fund your business, which is not always possible, nor financially viable.

An example would be video game development companies that secure crowdfunding from investors. Once they reach their funding goal, they will commit to providing the video game to their ‘investors’ for free, or with bonus content.

Alternative funding

Last but definitely not least, alternative funding models are an ideal choice for small businesses looking to expand. Alternative funding partners, like GroWise Capital, operate differently from traditional lenders and are able to cut through the red tape of bank loans and equity financing. 

To make things even better, alternative funding partners (like us) are able to offer unsecured loans. This means that your loan isn’t tied to your assets, and you won’t have to put anything up for collateral. Plus, without all that red tape getting in the way, we can provide incredibly flexible repayment terms that take your business’s ebb and flow into account. This means that your repayments can be linked to your business’s profitability, enabling you to pay what your business can afford. 

One of the most impressive benefits of alternative funding, is speed. When you partner with GroWise Capital, you could be spending your newly-acquired funds in as little as 45 minutes.

What type of business funding will be best for me and my business?

At GroWise Capital, it’s not just about funding. We are passionate about helping businesses grow, and invest time and energy into helping you make the right choice. We also know that sometimes your business needs funds as soon as possible, and luckily for you, we can do just that.We can provide your business with the funds it needs in less than 24 hours and sometimes in as little as 45 minutes. So get in touch with us today or apply online to get your hands on the funds your business needs to expand.

Types of Business funding for SMEs
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