How to Secure Capital Investment for your Business

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Introduction 

Whether planning to start a new business or already running one, you know how vital funds are. 60% of small businesses fail within the first year of operation due to a lack of funds. 

You need adequate capital, not just for business operations, but to maintain a healthy cash flow. You can ensure your business's growth and success by securing capital. 

Here we will discuss the tips to follow to secure capital investment. 

Shop around

Avoid falling into the trap of sticking with what you know. You may have a good relationship with your existing bank or an investor, but it does not guarantee you will get a loan or a decent deal. 

You are more likely to get a better deal if you can play one bank off against the other. Additionally, banks have limits on what they can lend you. So, if you already have an outstanding loan, applying for another one with the same lender could push you over their limit. 

Don't limit yourself to banks

When buying assets like machinery or renovating your business premises, look beyond the bank. 

Venture capital, angel investors, debt funding, accelerator funding and crowdfunding are ways to secure investment for your business. 

Venture capital is one of Australia's most widely used and popular methods to capture business funding. Also, if you already have an existing loan, you can still get funding from them in the form of a second mortgages. It is a short-term loan that goes further than the loan your current credit supplier would be able to give you.

Do your due diligence

Many people can help you raise capital but stay away from unproven intermediaries.

Ask questions about their track record and do your due diligence on them. An investor who understands the value and depreciation of a particular piece of equipment will have a mitigated risk and will be more likely to lend. 

On the other hand, the risk may be too high if you secure funding from a bank with little or no knowledge of how a particular machine depreciates or the resale value. 

Business line of credit

A business line of credit is an excellent way of raising capital for your small business. 

In this arrangement, a bank issues you a line of credit, and you can use the money according to your preferences. It could be to expand your business, buy new equipment or get on top of unexpected costs.   

Moreover, you pay interest only for the amount of money you withdraw. And repay the money in a lump sum or installments along with interest later.

Try government funding grants

Government small business grants are another potential option to raise funding for your business. 

Whether you are in a potentially lucrative niche or your business is based in the right place (there are plenty of location-based grants), grants can offer your business investment capital without giving away any equity. 

Check out the government's national/state grant schemes list for more information. 

Conclusion

Capturing capital for your business can be a complicated and challenging process.

However, working with the right investor can help you get significant funds fast and set the sail of your business or grow it exponentially. 

Navigating the complex funding ecosystem can take time and effort for new businesses. If you need seasoned expertise to raise capital or want short-term loans like bridging loans, reach out to Secured Capital Investment. We are finance experts and can help you get the perfect loan package to suit your business needs. 

 

 

 

 

 

 

  

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