For any start-up, possessing plenty of initial capital is a must to help get your SME up and running without encountering any problems early on. Investing with limited capital can lead to all sorts of issues, from an unbalanced cash flow to struggles when it comes to paying for resources, staff or dealing with any unexpected costs that may pop up. If your SME is currently working with limited capital, there are a few ways to avoid this and the pitfalls that it can bring.

Crowdsourcing

Whatever industry your business is based in and no matter how big its size, crowdsourcing can be an appropriate choice to boost current capital. 85% of the 2014 Best Global Brands used crowdsourcing in the previous decade, while countless start-ups have used it to fund their ideas. Crowdsourcing platforms allow businesses to convey their plans and generate finances from individuals and companies willing to back them. This provides extra capital to increase your initial amount and reduce potential financial issues.

Personal Loans

A quick and easy way to avoid investing with limited capital can be to take out a loan. Personal loans are unsecured type of loans, which means your business does not have to put anything up as an insurance in case you struggle to meet repayments. Before applying for one, you can check the monthly repayments and interest rate to ensure that your company will be able to meet them.

Angel Events

Angel investors are usually individuals or groups who will provide capital for a start-up, though often in return for ownership equity or with the promise of their money back later on. They can be found online but there are also many angel investment events held, where start-ups can pitch their ideas face-to-face with potential investors. Doing plenty of research is key so that you know which angel investors you will be pitching to and can ensure that they will be an appropriate match for our SME.

Promotions and Memberships

If your company is already in business, a good way of raising more capital is by offering promotions, such as discounts for new or loyal customers. Depending on the product or service, annual, monthly or other such membership deals can also provide extra capital up front. This can then be used for boosting cash flow as well as guaranteeing business for a certain time.

These methods have been used by thousands, if not millions of businesses, as a great way to avoid investing with limited capital.

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