Creative Business Financing-6 Ways to Creatively Secure Business Capital

Creativity is key when you own your own business. If you are a small company you might be the owner, marketing department, sales, accountant, cashier and even the janitor all rolled into one. And each new challenge requires a creative new solution. Even if you are larger you probably still have a hand in everything that goes on in the company.

It makes sense then, that you would need to have creative business financing when it come to your business as well.

There are basically two ways you can approach the problem of creatively financing a business. You can try to bring in money from an outside resource to help you meet expenses, or you can try to cut expenses in the first place. Fortunately, there are plenty of creative businesses financing techniques you can use for both.

Spending Less-Creatively Financing by Saving Money

Create a Buying Alliance

Many vendors will give a discount to those who buy in bulk. Unfortunately you’re not Wal-Mart. However, by partnering with another local business or buying alliance, you can receive the same discount as the large retailers.

Use Open Source Software

Instead of purchasing Microsoft Office for every computer in your business you might consider using the open source software OpenOffice. It’s free and an excellent substitute. If you need to do some basic photo editing, you might try GIMP. For virus protection try AVG or windows Security Essentials. Go to Cnet.com and take a look through all of the free downloads offered there. You might find some excellent alternatives to the expensive software you were considering.

Brainstorm with employees

If you have employees, gather everyone together and explain that you need to save money. Ask what ways they can think of to save money. You may find your employees are willing bring their own coffee mugs to work, or make the office party a potluck if they understand the company’s situation.

Getting more-Finding the Most Creative Business Financing Options

If cutting costs wasn’t enough, it may be to time to look for some creative business financing from outside sources. Here are a few places you should check.

Business Financing from Family and Friends– Virginmoneyus.com

Many companies have borrowed money from family and friends to get them through tough times or off the ground. Family and friends can be an excellent resource, providing low-cost or even free loans. It can also be dangerous for the relationship. Unlike a typical creditor, you will need to spend time with this lender. They may also feel that because they gave you money they have a right to interfere with how you do business. Companies such as Virginmoneyus.com will help you make the loan official. Laying out terms and making sure that both parties understand them is the best thing you can do to protect their investment, your business, and your relationship.

Creative Business Financing Tactics – What’s Hot and What’s Not!

Can anyone clarify the mystery of creative business financing? Surprisingly enough, there is a myriad of misinformation — and just plain bad advice swarming this topic. If you’re at the point of utter frustration in your search for straight talk about truly creative sources of business start up funding, then read on.

Join me in weeding out “the crap” (pardon the expression) versus the truly creative business financing solutions, by exploring what’s hot and what’s not in business start up funding. Let’s start out by looking at what’s not.

What’s Not!

Borrowing from Family & Friends
This is usually not a very good idea. It’s one thing to risk your own assets, but what happens if your business doesn’t do as well as expected?

Credit Card Financing
Using credit cards as a source of start up funding is a very bad move. Not only is the interest rate unfavorable, but so are the repayment terms. Read the fine print of your card holder agreement and you’ll see exactly what I mean.

Merchant Account Financing
This is like a loan, in that you are given a sum of money up front. However, there are no loan repayments. The lender takes a chunk of each and every one of your credit card transactions as repayment. Please, please, please – this is a very bad idea!

Peer-to-Peer Lending Groups
This is a loan from a non-traditional source – but nonetheless a loan. The major players are Prosper, Loanio and Zopa.

Before We Continue, Let’s Make a Quick Stop in Oz…

Did you know that creative doesn’t have to mean difficult? Challenging circumstances are often conquered with very simple — dare I say, childlike solutions.

Remember Dorothy and Toto? Dorothy just wanted to get home to Aunty Em. What she didn’t realize (until it was pointed out) was that she had the means to get back to Kansas the whole entire time. She just needed to understand how to effectively manage what she already had. Along comes Glenda her personal coach (a/k/a The Good Witch).

Glenda provides Dorothy with the training she needed to utilize the resources already at her disposal (exhibit A: the ruby red slippers). The end result? Dorothy is empowered to use what she already had, to get to where she really wanted to be. So what is the moral of this story? Are you trusting in “so called” Wizards?

Learn proven, creative financing strategies to fund your start up by exploring the benefits of bootstrapping.

What’s Hot!

Bartering
Trade the value of your products or services for the products and services of other business professionals. I am well acquainted with this form of creative business financing, as a few of my customers have offered me services in lieu of payment. Check out AmericanBarter.com and BizXchange.com if you’d like more information.

Equipment Leasing
Leasing business equipment is a creative means of unlocking needed cash flow. This form of business start up funding is especially helpful if your business requires expensive machinery or equipment.

Piggyback Marketing
Find complimentary businesses to partner with. This is an excellent form of promoting your business for free.

Bootstrap Financing
This involves a complete system for creatively financing your business, without loan financing or the misuse of credit. All of the strategies we’ve just explored are some of the many methods of bootstrapping. For the best possible results with this form of funding, you need to invest in a proven, start up business survival guide.

Business Finance Training and Effective Business Solutions

Business finance training refers to programs that teach individuals how to handle various financial duties. Finance training is similar to finance tips in that both help business owners make better monetary decisions, but training programs offer a more detailed explanation of finance strategies. Training programs vary in price and can be used by the owners and employees of a business.

The most basic business finance training provide information on budgeting, preparing financial statements, managing cash flow, strategizing, forecasting, improving performance, and applying basic procedures and concepts to more effectively manage a business. These programs are recommended for new business owners to help them understand standard business practices. Once these basic methods are mastered, more specific financial training may be looked into.

Advanced business finance training delves more deeply into a certain financial procedure or concept, usually at a higher cost than basic programs. Advanced programs may teach business owners how to set up effective business models, make decisions based on quantitative analysis, manage and control accounts, practice due diligence, measure productivity, and strategize concerning mergers and acquisitions.

Taking part in any kind of business finance training gives a business owner the resources to make more intelligent business decisions that result in increased productivity and profits. Many different types of courses are available either online or at a specified location. Some programs may even offer the option to train at the business. Taking into consideration the needs and abilities of a business is the key to finding the best business finance training.

A business finance solution generally refers to methods of funding and maintaining the finances of a business. Most solutions involve ways of obtaining working capital, but others also offer ways of protecting and increasing that capital.

To obtain working capital, business owners look to finance solutions that offer funding by several different means. The most common means are loans and financing. Asset-based loans use a business’s assets, such as inventory and equipment, as collateral. A business may also opt for a property loan in order to acquire commercial space. Invoice financing, such as factoring, involves liquidating or selling a business’s accounts receivables in exchange for quick funding. Some businesses look to trade financing to supply their inventory. The business will tell its financer the amount and cost of goods needed, and the financer will pay for the goods. The business then repays the amount financed over a specified period of time.

Most companies that provide business finance solutions also offer ways to protect and increase a business’s capital. Credit protection safeguards a business from daily risks, such as customers not paying on time, so that the business does not suffer incredible losses. This makes it much easier for the business to borrow money in the future, and it protects the balance sheet. A finance solution may also offer business insurance plans that increase the stability of a business. The most common types of business insurance are employee and public liability, car, property, and health insurance. These business finance solutions are designed to protect businesses against potential losses.

Looking For The Suitable Business Finance Solution For A Small Business

Surely it’s no mystery that searching for the most suitable business finance option to be able to get the financing essential to launch a small business gets to the mind of every businessman. While business finance options are around every corner it is essential to end up getting the right type of funding for a particular kind of business.

As a business owner, you need to find out that picking the wrong type of funding may lead to undesired situations just like feuds between you and your financier, a shift of control that is out of your hands and total waste of time and money, as well as other unwanted consequences.

The thing is that you have to look for and go for the most beneficial business finance option which best fits your small business. As a way to aid you to find the ideal financing alternative, we’ve outlined various financing options which you may find appropriate for your business.

Friends And Family

In the event that your loan wasn’t granted, give some thought to asking a rich relative or good friend for a little help. The most sensible thing about obtaining a small business financing from family and friends is that asking for a small amount of funds is fast, hassle free and has no legal expense. Even so watch out, continue to be professional and keep in touch. No doubt you wish to safeguard your relationships with friends and family and so make sure to repay the amount of money you have borrowed.

Debt Financing

Most new small businesses are funded with debt financing by means of a finance company. If perhaps you pass muster, banks can give you a history of credit. Know that this loan includes an interest rate and repayment schedule. However in advance of offering you a loan, they will carefully examine your company’s earnings, collateral and liquidity of your property. In addition, you furthermore should have a good business plan and know the inside and outside of your financial condition. If perhaps you need to improve the probability of your success to have your loan given, you need to establish a relationship with your lender ahead of your request for loan.

Grants

For anybody who is starting up a whole new business from scratch or in the technology game then getting a grant via the Small Business Administration is the very best way to try. Remember that SBA does not grant loans, they do guarantee them. They considerably reduce the lender’s risk so making them qualified to provide a loan. The pre-qualification program of SBA is intended to help new and growing business, disabled business owners, low income borrowers, veterans, exporters, rural, and specialized industries. In these times of economic crises, an entrepreneur shouldn’t fail to notice ‘free money’.

Venture Capitalists

Approaching the venture capitalists is an excellent way to consider just in case you happen to be beyond the start-up stage, have initial revenues coming in, a quality team in position and also have a clear path to finally sell the business. Yet be aware that the VCs right now have higher standards than in the past. They remain a serious player in the investing world up to now. They offer you a very time-sensitive funding and assures they immediately get their money and profits. In case you are planning for a meteoric growth and will require further business financing later on to attain it, they’re certainly a great source.

Equity Financing

Even if debt financing is often preferred by business owners, however there are still a lot of companies which are funded by private or institutional investors in exchange for an equity ownership stake.

Angel Investors

Angel investors can be your wings to get funds, they fill the gap between friends and family and venture capitalists. Angel investors now seldom even take a look at investments below $1 million. They made their name as being warm and friendly and patient about their investments as well as by providing their business wisdom and priceless relationships along with their money. So why don’t you get a knowledgeable business finance adviser to plan the deal.

Strategic Investors

Strategic investors could actually help if perhaps you need to get to market without delay. They brighten up the investee’s outlook for more investment and success by means of putting value to the funds it invests with its contacts, experience, and know-how of market. Nevertheless you really need to be careful that they can prohibit you from selling to your competitors, can swamp your business with opportunity, manipulate you into reallocating your company’s assets in a lopsided way as well as end their business relationship with you on in just an instant! Which means that you need to make certain you know what you’re getting into.

The bottom line is, choose intelligently. Be aware that even some small business finance options can be complex and risky and you have to make the right choice. It’s very important that you complete your homework; request the right amount, get the right source at the best time. With this you can get the funding for your start up company which is right for your business and stay prepared to achieve business success.