Success is a great feeling, which an entrepreneur experiences as the sales orders come pouring in or customers come through the doors. However, success brings its challenges and one of them is raising capital.
The cash has to be raised somehow and sometimes very quickly. A person can always go the traditional route, using business loans from the bank or make use of the services the Small Business Administration provides. The only problem is that a lot of paperwork is required and a business plan needs to be developed. It could take weeks or even months. Fortunately, there are means by which an entrepreneur can raise capital quickly and without any hassle.
Investor Platforms are Waiting
The JOBS Act-Title I provides needed help to any entrepreneurial establishment. It is easier for entrepreneurs to raise money in the private markets because Title I has less regulation on general solicitation advertising. It means an entrepreneur can publicly advertise fundraising efforts.
Though investors must have the proper accreditation, but that is not as a big a problem as it may appear to be. AngelList, a fundraising platform on the Internet, will verify investor accreditation at no cost. Moreover, the Syndicate Program offered by AngelList can connect an entrepreneur with investors that have a sterling record. AngelList is not the only investor platform that can help an entrepreneur. Onevest is another possibility an entrepreneur may use for raising large amounts of capital quickly. MicroVentures allows accredited and non-accredited investors to have access to entrepreneurial startups. This platform likes to think of itself as an “investment bank for startups.”
Explore Entrepreneur Crowdfunding Opportunities
Everybody seems to know about Kickstarter and IndieGoGo but those are not the only crowdfunding platforms. As a matter fact, there are some crowdfunding platforms designed expressly with the entrepreneur in mind. One of these is peerbackers. This platform focuses on entrepreneur funding, and helps entrepreneurs with a Crowdfunding Academy that provides education on how crowdfunding works.
Debt financing is also possible. A non-traditional lending source is Funding Circle which helps qualified entrepreneurs get as much as $500,000 of capital debt. Criteria such as online customer reviews are used in the loan decision and approval can be as quick as two weeks. The approval time cannot be understated. Loans from a bank or the SBA can take up to eight weeks to receive approval. Given the growing popularity of crowdfunding, there are a large number of crowdfunding sites from which to select. An entrepreneur need only pick the site best suited to fulfill the cash need.
Think About a Merchant Cash Advance
An entrepreneur who owns a retail business or any establishment with a high volume of credit card sales can consider a merchant cash advance. This is a decent way to raise money almost immediately.
Essentially, the entrepreneur agrees to sell a percentage of the future credit card sales to a merchant advance financing provider. In return, the entrepreneur will receive a lump sum of cash. The provider collects a percentage of the daily credit card sales until the full amount of the advance plus a fee is paid. There is no schedule of payments, and a store with a heavy volume of sales can pay off the entire advance in a short period of time.
An entrepreneur who needs a quick infusion of money may find this very attractive. Cash needed to buy equipment or additional stock can be readily available because the approval process is quick. Moreover, there is no need to worry about minimum monthly payments; it is a percentage of credit card receipts on a daily basis. If a small business has seasonal heavy volume, such as Christmas, a merchant cash advance negotiated then could be quickly paid off. As with any loan or advance, the terms and conditions of the agreement should be carefully reviewed ahead of time.
There is nothing wrong with traditional ways of raising capital but applying for a business loan at the bank is no longer the only way. The problem is the time factor and entrepreneurs may need the money right away. Entrepreneurs can avoid road-blocks in their business by looking at alternative ways of obtaining needed cash.