Growth is such an important part of business, yet many owners shy away from outside funding sources. Here's how to fund a business with no money and grow. No matter how successful your business is at first, it can be challenging to find the funds to fuel growth within the first few years.

It can take years for your business to build a good credit score and until then, banks will be looking at your personal credit rating for reference. Depending on how much money you need, this can be a serious drawback.

Don't give up, keep reading to find out how to fund a business with no money.

Raising Capital to Get Your Business Off The Ground

It's always the most difficult to get funds when you're just starting out. Even the best ideas can fall short over time so it's difficult to find people who're as passionate about your new business as you are.

If you're finding it challenging to get traditional lenders to help you take your side hustle to the next step, there are alternatives.

The most common ones are:

Friends and Family

It's always tricky getting friends and family involved but it's best to explain to them upfront that they're taking a gamble. If they don't expect their money back within a certain timeframe, or at all, it's easier to maintain smooth relationships with them if things do go wrong.

Crowdfunding

Crowdfunding is a novel way to get the cash you need if people you know are unwilling or unable to help you. Basically, you get small amounts from several investors instead of a lump sum from one lender.

There are two main kinds of crowdfunding, namely, reward crowdfunding and equity crowdfunding.

Reward crowdfunding means that people give you money in exchange for a reward. This could be goods and services, or publicity. With equity crowdfunding, investors receive a small percentage of your company in exchange for their cash.

Credit Card Stacking

This method is a relatively cheap one interest-wise as long as you can pay back your installments timeously. How it works is that you use the credit limit on a number of credit cards to make up the total sum of money you need for your business endeavors.

Angel Investors

Angel investors are people with some spare cash are willing to take a chance on startup businesses in exchange for a piece of the pie when you do start making money. Typically, this could be as much as 25% of your profits.

Shared risk is the main benefit of angel investors. You aren't bound to start paying back the money at a specified time and if your business fails, you don't need to pay them back.

How to Fund a Business When You Don't Have Money for Expansion

If you already have a thriving business but you need a cash injection to pay for that next step, things are a little easier. You can use your business assets as collateral to get the working capital you need.

Similarly, retailers can also benefit from inventory financing, where a lender pays for the inventory you need so that you can use the profits to grow your business instead of restocking your shelves. In this case, your inventory serves as collateral in the sense that the lender owns these items until you sell them and pay back your loan.

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