8 Reasonsfor Seeking BusinessFunding
Explore the most common reasons businesses secure funding.
1. Companies Need Working Capital
Having enough working capital is a must for a company’s financial health.Nothaving enough funding canadverselyimpact a business’s future. Most companies seekexternal financing to get enough capital to accomplish their work goals. For example, a loanmightpay for short-term funding while you can use the rest of the money for the company’s growth.
Having enough funding allows your company tograb opportunitiesthat come your way, such as investing in new products and services that canhelp yourbusiness develop further.Working capital can serve as a safety net when your business needs extra money, too. For example, if your business is seasonal, you should get working capital funding during the period when your company is not in demandto keep your brand afloat.
2. CompaniesWanttoPurchase Assets
When your business grows, you need to purchase assets, such as vehicles and machinery, to keep up with the increased demands and sales. Youmayconsider getting an asset purchase loan to pay foressential resources to encourageyour company’s growth,especially if you have your eyes set on something expensive, like company cars for traveling employees.
Another good use for an asset purchase loan is buying new office and IT equipment so that your employeeshave thetools they need for their jobs and to improve your internal infrastructure. Youmayalso buy new machinery for better andmore efficientproduction.
3.Starting a Business
Startup businessesneed financial backingtogetoffthe ground. Although someentrepreneursuse their own money to start theirbusinesses, it can be difficult for them to gain profit from self-funding alone. As a result, most business owners seek external funding for theirendeavors, instead.
Entrepreneurs have various ways to get external funding, such as borrowing from friendsand family or applying for bank loans.
4.Business Funding for Expansion
If you want your business to expand and succeed in the long term, you will need enough funds toact onyour plans. This growthmightinvolve hiring new talent,building outthe products and services you offer or moving intoa larger facility. Having the funds you need will open your company to new opportunities andhelpyour business goals materialize.
5. Research and Development
New products demand extensive testing and development — especially when youwork in technologyand manufacturing fields. Not all companies have the money to kickstart a new product line or fine-tune their current offerings. Your brand might consider funding to think outside the box and offer something your competitors have yet to create.
Once the development phase is complete, any funds left over from your research might be put toward prototypes or final production.
6. Brand Acquisitions and Partnerships
Funding a business is a proactive way to complete company acquisitions and establish new partnerships. You may find yourself in a situation where joining forces with another player in the industry lets you serve your customer base in ways you were unable to do before.
Additionally, new partners in your field may expect compensation for bringing you along on their mission. Brand acquisitions and partnerships could be reasons your company seeks funding, as a partner may explore other options if you’re short on money to finish a deal upfront.
7. Marketing Opportunities
Customers will only buy your product or choose your service if they know about it. Often, companies search for funding so that they can bring marketing channels to life.
You might pour funding money into spreading the word about how your offerings are a cut above the rest to increase sales.
8. Meeting Compliance Standards
Your industry may require your business to follow regulatory demands. Holding a special certification could be pivotal in your company’s ability to work in a certain space from a legal standpoint.
Fortunately, funding options for your business make it achievable to cover costs associated with obtaining certifications so that you can eliminate the chances of receiving fines and harming your brand’s reputation.
How to Get Fundingfor Your BusinessVia a Factoring Company
Seeking funding from a factoring company isbeneficial for several types of businesses. This way, you will get the money you need to start or expand your business. You also becomeavailable for opportunities that were once unthinkable because of yourprevious spending limitations.
Byfinding a factoring companyyou can trust, you can get the money you need to helpyour business thrive in a competitive market.
Contact Porter Capital to Get Business Funding
At Porter Capital, we offer working capital solutions tocompanies in various industriesnationwide.Since our inception, we have provided $6 billion to businesses in need of financial factoring— and we want to see this number go up from here.
We proudly offer our financialservices, includinginvoice factoring,accounts receivable financing,dip financing,working capital loansandasset-based lending,to our esteemed clients. For inquiries, contact us today.
