In order to start your business, you need some start up cash. Most likely you start by going to people that you know that might have some investment capital. Your first stop is family or friends. You've pitched them this great idea, and you either gave them a share of the business or you took it as a loan, promising that you'd pay it back. Family, if they have any money, are those most likely to have helped you out. With friends, it's a little tougher, but maybe they really liked your idea and wanted to come on board. (Of course, loans from friends are rarely a good idea if you want to keep those friends, but we won't go any further into that here). However you managed to do it, you got started.
Now things are going well. You want to grow, but really don't want to (or can't) go back to your friends and family. The next logical step is going to the bank to ask for a loan. So, you ironed out your business plan, including plans for each year, documented history of your finances, and drove down to your neighbourhood bank.
And....your bank turned you down.
Why you may need to look beyond the bank
Don't take it personally. Banks have extremely strict lending requirements. In fact, in the UK, 50% of SMEs were rejected by the bank when looking for financing. Even if your business is established and you are looking to grow, about 25% of those businesses were rejected as well. So what do you do? Many small companies are in a similar fate. They need to grow, but can't get financing, and miss out on many opportunities because of this.
This is where working with alternative finance providers such as InFund makes sense. Infund understand that past credit history may not be a good representation of your current value and can get you an unsecured loan to make needed the investments you need to make.
Reasons for getting immediate funding
Here are just a few examples of places where funding can help you expand.
In order to accomplish your goals, you may need to recruit people right away. For instance, you need to hire a marketer to expand your brand, or you need a new salesperson to gain new customers or clients. Maybe you just need staff to handle your inventory or to improve customer service. It's hard to reach the next level without this help, so it's best to make an investment in getting new talent right away.
Stock and Inventory
If you sense a demand, you need more inventory. You know that if you purchase great quantity of stocks of your products, you can get a much better price, and increase your profit margins. Without proper funding it can be difficult to compete. If there's a limited amount of a product available, why not try and corner the market (hey, we can all dream big, can't we?)
With the right amount of funding, you can make that big impact ad buy. Maybe you want a commercial during the local football match? Maybe ads on the side of local buses? These are typically expensive, but sometimes you need to think big to generate a solid ROI. Do some calculations to determine whether the investment is worth it.
These are just a few ideas, and I'm sure you can think up others. However, none of them are possible without access to cash. Banks often don't like to make these loans, so it may be worth your while to look into alternate providers.