Small businesses are chronically underfunded. One study showed that just under half of these ventures (48%) have the financing they need. For the majority, the lack of proper resources leaves them vulnerable to sudden market shifts and unexpected bumps in the road.
Sound familiar? It’s time to take steps to shore up your funding situation. However, this process can get complicated. Determining the right financial structure can be intricate and hard to navigate.
Don’t worry. You aren’t alone. As you attempt to determine your optimal funding plan, Frontline Funding is here to help.
How Much Funding is Enough?
You want your organization to grow as quickly as possible. That requires investment. You need to have sufficient resources to drive your expansion to reach your goals.
Some companies attempt to do this through a process known as “bootstrapping.” Essentially, this means you try to avoid outside funding and build your firm only with incoming revenues.
This process has its appeals. No financing costs and no outside influence on your operations. However, it also limits your growth rate. You’ll end up with opportunities you can’t pursue because your budget is so limited.
The precise amount you need to fund your business will depend on many circumstances. It can be a complex figure to determine. Having a strong partner can help you map out a workable plan. Turn to Frontline Funding for the information you need to outline the right financing program.
What are Your Funding Options?
There are multiple ways to raise funds for your business. In most cases, you want to create a diverse program that includes multiple sources. Here are some of your choices:
- Personal Funds
- Lines of Credit
- Invoice Factoring
Using your savings and other personal funds gives you control over the business and eliminates the need for long-term financing costs. However, it is a risky option. If the business fails, you lose your hard-earned cash.
Investors also let you keep financing expenses at a minimum. However, this path dilutes your equity in the business. In addition, you’ll have partners who will likely want input into the operation of the venture.
Loans and lines of credit provide cash without forcing you to sell equity. However, these options come at a cost — literally. You’ll need to pay interest. What’s more, you might need to guarantee the loan personally for a startup.
Invoice factoring lets you use your outstanding invoices to get immediate cash. It represents an excellent way to protect your small business from the unexpected bumps you will almost certainly encounter.
Why is Frontline a Good Choice as a Funding Partner?
You want to gather as many resources as possible to make your business successful. At the same time, you want to limit your risk, providing security for any eventuality. This is especially true in shaky economic times, when you might face a turbulent market.
Expert guidance can help you steer your startup towards the right financing mix. Frontline Funding can help you determine the right amount of funding you’ll need. Meanwhile, you can also get assistance with your organization’s other needs.
Need more information? We’re here to help! Contact Frontline today to learn more.