Growth Capital Funding Options for Your Business

Growth Capital Funding Options for Your Business

Almost every small business owner envisions their company growing from a fledgling operation into a significant source of economic prosperity. To empower this progression, you need growth capital, which is financing specifically to assist your expansion plans. This funding can enable you to hire additional personnel, buy commercial real estate, purchase needed equipment, improve marketing strategies, branch out into fresh markets, and even acquire established businesses. Here are the main options for getting growth capital for your company.

Get a Loan

The conventional method of obtaining growth capital is through a loan from a bank or credit union. Through these traditional financial institutions, you can obtain a loan or line of credit with relatively low rates and fees. An SBA loan is particularly desirable because it offers a guarantee from the U.S. Small Business Administration in case the borrower defaults on the loan. However, many small businesses, especially startups, have difficulty qualifying for a traditional loan or line of credit.

Approach Alternative Lenders

Because conventional banks and the SBA reject a large percentage of applications, it is fortunate that there are numerous other means of obtaining needed growth capital. These include non-bank lenders such as marketplace lenders, mid-prime alternative lenders, and other private lenders. These alternative sources of funding often have the advantages of quicker application processes and less rigid criteria for approval.

Leverage Your Assets

If your company is unable to qualify for a traditional loan, a viable alternative is to obtain an asset-based loan. This involves using your business or personal assets such as real estate, machinery, inventory, or equipment as collateral for your growth capital funding.

Obtain Cash Advances

When you obtain growth capital through cash advances, you sell some of your company’s unpaid receivables to a financing company for an immediate advance. Alternatively, you obtain a lump sum from a lender in exchange for a percentage of future sales. These are usually short-term solutions when you need growth capital to take advantage of imminent opportunities.

For more advice on funding options for your business, contact Quick Capital Funds.


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