4 Types of Growth Capital

Most business owners stay awake at night thinking about working capital. Fewer people spend time thinking about growth capital, which is a mistake if you have any intention of expanding your business and increasing your profits. It’s possible to take a little cash from your monthly revenue and put it towards growth, but that can take a while to add up. There are a variety of easier ways to access extra cash, and these four might be the best when it comes to developing a young business.

1. Angel Investors

A bank loan can get you money, but it doesn’t come with advice or expertise. Angel investors, on the other hand, guide along with cash. Individual investors who like to have more control over their funds than the stock market allows will often seek out startups that will take money in exchange for equity. You’ll get money to fund growth as well as advice from someone who has experience helping businesses develop and succeed.

2. Business Credit

Growth is a very broad concept as it relates to business. Some companies might be in need of a new and larger space, while others might just need one more company car. If you’re not looking to complete some sort of massive overhaul, a simple business line of credit might be the best solution. This will give you access to growth capital as you need it without the lengthy process of applying for a loan. Especially if you’re just in need of a short-term influx in cash that will quickly result in earnings, business credit can be an immediate and easy fix.

3. Personal Loans

Borrowing money should always be done cautiously; if you don’t have a clear strategy for how you’ll spend and recoup the cash, it might be more trouble than it’s worth. Whenever possible, taking a loan from friends and family is a better option than going through a traditional lender. There are loans specifically designed for small businesses, and those can potentially provide the necessary growth capital while also offering decent terms.

4. Venture Capital Firms

This is similar to the angel investor, just done through a larger company representing multiple clients. The biggest benefit is still having a financier who’s personally interested in the growth and development of your company.

Every company is different and experiences expansion at its own rate. With proper planning and the right source of growth capital, you can steadily grow your business and reach new levels of success.

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