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Companies of all sizes are taking a closer look at budgets and shifting resources around to power through the financial strain of the COVID-19 pandemic. Some are even turning to unconventional methods to finance operations. The ability to solve problems in creative ways is a common trait of innovators and entrepreneurs and will become crucial to staying afloat as we navigate tricky economic situations.
So what are some creative financing options for businesses looking for funds? We asked eight thought leaders to join the conversation and share their innovative methods for financing business operations.
Make products available Online
Selling digital items or services is a great way to gain income without much work. If you are a company with a following on social media, switching to have some products online could benefit both the customers and you. You can also help others sell their services for a cut of the profit. — Andrew Roderick, Credit Repair
Debt Financing
To get through the new normal, companies might consider debt financing options. Based on the type of loan you are seeking, debt financing can be either long term or short term, so this type of loan can be used for whatever your business might need to survive the new normal. — Kimberly Kriewald, AVANA Capital
Equity Financing
Equity financing is a way to raise funds by selling ownership in your company, proving to be a viable option for businesses looking to get creative with their finances. In exchange for money from investors, you give them a portion of ownership and control in your business. The investors may be angel investors, venture capitalists, or even a family member or friend. — Rex Murphey, Montauk Services
Consider a Line of Credit
The only type of financing businesses should consider is a line of credit if you have a profitable business.
A credit line allows you to deal with the ups and downs of cash flow when things are unpredictable. Banks and some alternative lenders are not going to give out a credit line easily nowadays. — Stephen Halasnik, Financing Solutions
Employee Buy-In
Employees who have a stake in a company are proven to work harder and be better at their jobs. Most make a profit on their investment and staff turnover is a lot lower. — Ethan Taub, Loanry
Access Investors across the Country
Crowdfunder has simplified the equity funding process for so many entrepreneurs. Small businesses and startups strike banks as risky, making bank loans difficult to get. Rather than travel around and pitch to individual investors, business executives can post their deal to Crowdfunder. It is seen by investors all across the country and funded much faster than ever before. — Samantha Hawrylack, How to FIRE
Build a relationship with new companies
In the last three months, we actually saw every single one of our lending partners suspend new loans for landlords. Our customers kept asking where they could get financing to fund new investment properties, and we eventually built a relationship with a company called Fund & Grow, which works like a business credit concierge service. They help small business owners open unsecured business credit lines and cards, typically in the $150-200K range. — Brian Davis, Spark Rental
Use Crowdfunding
Crowdfunding is an increasingly popular means of financing, especially for small businesses. The key to successful crowdfunding, however, is complete transparency and accountability. Be truthful about how the money will be used and follow up. People won’t give money to organizations they believe will misuse their funds. — Aidymar Berrios, Financial Services SEO Company
