Money doesn’t grow on trees, and like most businesses, yours is probably operating on a tight budget. Once your expenses have all been covered, there’s little left over for anything extra, making it difficult to replace or improve equipment. Whether an important piece of equipment has broken down, or you’d simply like to upgrade and grow your business, doing so on a shoestring budget is difficult.
The good news is that there are ways to get the equipment you need easily and quickly. Below is a list of several ways to raise funding for business equipment.
Asset financing allows businesses to use their assets as collateral to obtain a loan. Most asset finance solutions allow you to use your inventory, accounts receivable, machinery, equipment, or property to secure working capital for things like buying equipment and more.
You don’t necessarily need to go to a bank for a loan of this type. Asset-based lenders usually offer more flexible repayment terms than banks, and they often say “yes” when other financial institutions say “no.”
Invest in Your Own Business
While it’s tempting to rush out and obtain a loan to buy new equipment, it’s important to consider investing in your business yourself. Even if you don’t have enough money in savings to pay your bills, you could get a low-interest business credit card that lets you purchase the equipment you need without incurring interest. The catch, of course, is that you must pay it back within the specified length of time.
While this sounds risky – and it is – if you don’t believe in failure and are driven to succeed, this method of financing your equipment purchases shouldn’t make you too uncomfortable. Furthermore, investing your own money into your business may make lenders and investors more willing to work with you in the future.
Crowdfunding is a way of bringing like-minded investors and entrepreneurs together to fund a business venture. It allows you to collect small amounts of capital from a large pool of people to fund your business needs. The internet is full of crowdfunding websites, with Kickstarter and Fundable being two of the most popular for startups. The key to being successful on these sites is to hone your story and make people see the value and purpose of your vision.
Technology has made it easier than ever to obtain cash for almost anything, but traditional means of business financing still reign supreme. Most small businesses get the funding they need from good old-fashioned banks. Of course, to qualify for a business loan, you usually need to meet certain eligibility requirements. The following will certainly help with your application:
Having been in business for two years or more
A strong annual income
A good credit rating
Of course, every lender has different requirements for approval. The requirements listed above are just the most common.
Ask Friends and Family
Asking close friends or family members is another option for obtaining finance. If you know someone who has good business sense and plenty of capital, this method might be ideal as these types of loans are often interest-free.
Try to borrow from people who have faith in your ability to succeed and who understand your plan. Make sure the person you partner with understands the risks and make a clear repayment plan, using P2P lending software to document and manage the loan.
Many businesses find it difficult to replace or upgrade their equipment because of limited cash flow, but the list above gives you several options for obtaining the funds you need quickly and easily.