Numerous business owners are burdened with finding growth capital for their companies, as most struggle to take loans and issue equity that could prove detrimental in the long run. While debt options from traditional lenders may have been the go-to for numerous companies, most entrepreneurs now prefer alternative lending sources.
Angel investors are the first type of growth capital that you can utilize. This financing option allows investors to fund specific projects that they are interested in. Due to this, your investors will be active partners, offering advice on how to improve your operations along the way. Since they have expertise in their funding areas, angel investors will connect you with suppliers and customers to help your business succeed.
Venture Capital Firms
Venture capital firms are institutions that provide growth capital in exchange for equity. Since they provide significant funding, venture capitalists will also have a vested interest in your company. They may occasionally require you to work with their representatives to foresee the success of your operations. This funding source comes with a reduced risk of strenuous loans repayments, with the equity allowing the lenders to benefit from their investment. The only downside to this is that this funding may dilute your ownership stake.
Borrowed funds will be another alternative to get growth capital. This will, however, require you to rely on traditional loan sources. The downside to this source of money is the rigid loan repayment terms that could prove problematic in the long run. By utilizing this option, you will also have to factor in the interest payments for your loan.
Owner investment is another area to consider looking into. This option allows owners to invest their cash into their business. This will especially come in handy when you want to invest in new projects since not all lending sources will provide 100% financing. It also signals that you are confident about your business, helping you attract outside investors in the process.
If you are low on finances and need a secure source of growth capital, JHF Capital will be your go-to solution. Call us today for more information on business funding.