Facebook, Apple, and Coca-Cola all became household names without the help of angel investors or venture capitalists. But, can you? Absolutely.
Outside help can add a new level of funding and credence to your business, but that comes at a price. You’re giving up a share of your business and your decision-making ability.
For those who prefer to “bootstrap it” to stay in charge of their business and their destiny, here are some ways to scale your business without outside help.
1. Alternative Funding
You need money to grow. You can’t always build your business off of your sales and personal savings, but you don’t want to bring in any investors.
If your business needs an influx of cash to invest in new equipment or property, you should click here to learn more about a merchant cash advance (MCA).
This can give you access to up to $500,000 for your business, and the application process can be done all online in a matter of minutes. You could have your answer in less than 24 hours and your funding the next day.
2. Small Business Loans
Loans are another great way to add some cash into your business. However, they’re not always easy to get if you’re a start-up or up-and-coming business.
Small business loans through the major banks are extremely hard to get, which is why banks say “No” to over 80% of small business loan applications. Big banks have to follow very stringent lending guidelines, with no real wiggle room to make any exceptions for your business, no matter how bright your future may look.
The SBA is more willing to work with less proven businesses. However, you still need to have been in business for at least 2 years to qualify. Also, their application process is often long and involved. You will have to provide and complete a lot of documents, which can drag the process out over several weeks, or even months.
3. A Business Line of Credit
The business line of credit can help you build your business by giving you access to revolving credit and you will only pay fees based on what you use.
However, getting a business line of credit from a major bank is just as hard as getting a business loan. So, if you don’t qualify for one, you won’t get the other.
If you get a business line of credit through a private lender or firm, you will have a higher probability of getting approved. However, this also means there will be a higher cost of borrowing.
It will also most likely come with a personal guarantee. That means that you, as the business owner, are personally responsible for paying back the balance on the line of credit if the business goes under or you default on payments for any reason. This means you could be personally on the hook for paying for expensive commercial equipment if you put it on your line of credit.
The Bottom Line
Success and growth are possible without investors, even though it will be more challenging. There will be times where you struggle and your cash flow dries up.
If you explore any of the 3 options above, you can keep your business on track, while ensuring you’re always in control of it. Remember, the true cost of an investor may be much higher than anticipated. You might be giving up a share of your business and giving a new party a seat at the decision-making-table.
Don’t give up long-term control to fix a short-term need for funding!