Are you looking to expand your business, or simply in need of some additional funds? Business Financing may be the answer for you. There are two major forms of business financing – debt and equity – and depending on your situation, both may be a great help.
However, it can be rather time consuming to research your options. With that in mind, we’ve put together some key points to keep in mind should you decide to finance your business.
How much funds do you need?
One of the first things you need to figure out when choosing business financing is how much you want to borrow. Consider both long and short term expenses, including rent, equipment, inventory, wages, legal costs, and more.
If you’re borrowing to purchase an asset, it would help to have a copy of the contract with the price of purchase.
Use cashflow forecasts to identify any potential shortfalls. Compare the amount you need to the amount you have available. If the difference is large, you may want to consider which options save the most money – it all adds up, even if the percentage difference may seem small.
Federal government grants or bank loans are an option, but if that fails, unsecured business loans are the best option for you.
Equity Finance
Equity finance involves investing either your own or someone else’s money into the business. Whoever this comes from becomes a part of the business, and in doing so, gets a share in the profit.
Generally, equity capital comes from sources like family or friends, crowd funding, and public float.
“Business angels” – those who invest their own money into start-up businesses – as well as venture capitalists are some other possible sources.
One advantage of equity finance is that there is no need for repayment. Freedom from debt is the major draw. If this is a priority, equity financing may be the choice for you. However, shared ownership comes with relinquishing some degree of control over your business. Investors not only share profit, but have a say in how things will be run.
Accepting funds from family or friends may affect personal relationships. You may also be competing with other businesses for the same source.
If you want to consider another option, debt finance could be it.
Debt Finance
Debt finance comes in the form of a loan, usually repaid in set intervals over a period of time.
This commonly includes things like bank loans, mortgages, and overdrafts. You’ll need to generate funds sufficient to make the repayments, and new business may have some difficulty producing the necessary profit records to secure a deal.
But unlike with equity finance, with debt finance as your chosen form of business financing, you do not have to answer to investors, and remain in full control over your own business. Interest fees and other expenses may be tax-deductible, and you won’t need to share profits.
Unsecured business loans are a form of debt financing that is also available – these do not require loans to be secured against collateral, meaning you do not run the risk of having your business assets seized if you do default on a loan.
Applications will also be processed much faster and with much less of the hassle that comes with bank loans or other secured loans.
Where to look for an Unsecured Business Loan to finance your business.
If you need some funds to improve cashflow, finance expansion or asset purchase, or assist with your business’s working capital, GoZoolu offers quick approval business financing from anywhere between $5,000 to $250,000 with no security required.
Simply contact us here, and an experienced lending manager will get back to you with a pre-approval shortly. We will compare over 200 private lenders from our network to find you a competitive deal.
Don’t wait until it’s too late – get unsecured business loans approved in minutes.