Every small business targets to grow and become reputable companies in the future. With growth comes stability and wealth for business owners. Also, you get to expand your workforce and create employment. To achieve this goal, you must be conversant with a different business financing option. Here is an insight on secure business financing.
Meaning of Growth Capital
As the name suggests, growth capital refers to business financing meant to help you expand your business and operations. Some lenders may provide this type of business financing through loans or lines of credit.
Types of Growth Capital
There are five major types of growth capital, namely;
• Asset-based loans
• SBA loans
• Conventional growth capital
• Cash advance capital
• Alternative growth capital
Difference between Growth Capital and Working Capital
Unlike working capital, growth capital is solely meant to help small businesses to expand their operations. On the other hand, working capital enables you to run your day-to-day activities. This type of business financing can come in handy when you have cash flow problems.
How to Qualify for Growth Capital
Before securing this type of business financing, you need to understand how one gets the green light to receive growth capital. Most lenders scrutinize your business model to determine whether the business is profitable or not. By doing so, the finance company mitigates the risk of losing their money. Also, it would be best if you had an excellent business credit score to secure growth capital.
Way to Go
Some small businesses dread the idea of lacking funding to run their operations or operate. However, this should not deter you from achieving your ambitions. Instead, it would be best if you took the initiative of evaluating different business financing. Over the years, Capital Funding has been at the forefront in providing excellent business financing solutions. Reach out to the professionals today!