How to find investors to finance your business

business financing

Companies are struggling in these tough economic times. Capital is hard to come by, limiting business growth. This also limits product output and thus leads to less consumer spending. It is crucial that you, as a business owner, understand where to find sources for raising capital so that your business will continue to thrive, despite the recession. Finding and providing capital to new and established businesses are a challenge.

Businesses produce a valuable product or service that can be seen in action. Stocks and bonds, mutual funds and other financial products exist mostly on paper. By convincing potential investors of the benefits of putting their money in business rather than in the volatile markets, you have are already ahead of the game. Some companies specialize in bringing together investors and entrepreneurs in need of financing.

For newer firms, finding an investor ready to take a chance on you, especially in these less than stellar economic times, can be hard. The better prepared you are, the higher your chances of ensuring. Make sure you have an accurate business plan and be able to show you are following this plan. You must demonstrate on paper that you are financially sound and ready with a backup plan in case you need one.

Larger or more established businesses should find it easier to raise money. These companies have a history of being fiscally sound and fruitful in their field. You should already have contacts for potential capital investors within your customer or supplier base. Banks are much more willing to loan to long-standing companies. Bootstrapping, or finding ways of raising money by cutting costs within the enterprise, is a viable and proven method for larger firms as well.

When looking at all options on how to increase capital for your business, do not neglect the Internet. There are several options available, including companies that specialize in marrying capital investors with businesses in need of capital. Funding Store is a UK based website that has a list of companies that investors can research and possibly invest in. Even social networking sites such as Facebook and MySpace can help both investors and businesses find each other.

It is easy to cling to the past when attempting to survive in these uncertain economic times. This could be a mistake for the business owner. You need to be flexible and willing to take risks on newer, more unique ways of raising money. As the old proverb goes, “Nothing worth having ever comes easy.