When you are a small business enterprise and looking at expanding it can be difficult to choose a method of financing the expansion of the business. There are several methods available to you to expand your business without a bad credit loan or breaking the bank, we have collected a few of them for your benefit below:
Instead of trying to raise capital from investors for your business as a whole, you may want to look for funding for a single aspect or project of the business that is currently or going to be profitable. Investment in the project is then paid back to the investors through the cash flow generated by the project. Importantly, everything is tied to a specific project instead of the business as a whole.
Partnerships come in many forms, but the one of most interest to your business is a local partnership. Seek out other companies in the local area to partner with enabling both companies to grow in a mutually beneficial arrangement.
Although this is one of the trickiest methods of gaining funding for your business to grow, attracting an overseas investor is a surefire way of increasing your available financing at little risk to your business. There has been a rise in investment from international investors in British business, especially from China, though you should be careful as to how much control an investor gains of your business. This method also avoids the need for taking out a loan, especially if you are in bad credit.
Depending on which part of the united kingdom your business is based in, you may be eligible for grants or regional funding to develop your business. Especially if you can prove that you will be providing jobs to the local area, you can apply for assistance from your local council. If you have had a bad credit loan that you have failed to pay off, a grant may be a good solution for your business.
Unsecured business loans
An unsecured business loan is a method of funding which requires no personal or business asset as collateral. These type of loans require that you show the lender an excellent credit rating with regular repayments and an excellent financial forecast so may not be ideal for you if you have bad credit.
When taking out an unsecured business loan, you must provide detailed cash flow analysis and pay a regular monthly repayment including interest during the loan period. It is worth noting that an unsecured business loan will demand a higher interest rate due to the higher risks involved in granting the loan.