How To Get Funding For A Business To Boost Growth

For many small business owners, knowing how to get funding for a business is critical to unlocking growth and ensuring sustainability. Funding may be needed to expand operations, purchase equipment, hire staff, boost cash flow, or navigate unforeseen challenges. Whether you need short term business funding or a long-term solution, it pays to understand your options.

Ever wondered how you can get funding to help your growing small business? Here are seven business funding options you may not have considered.

Business Funding Through Government grants

If you are eligible, government grants can be great company funding options with minimal risk. However, typically the application can be lengthy and complicated.

If you are interested in pursuing government grants, websites such as Grants Connect and business.qld.gov.au can help make it easier. MGI can also help you to assess your eligibility for various grants and tax offsets.

Government funded innovation centres that you should also look into include ilab, QUT Creative Enterprise Australia and Innovation Centre Sunshine Coast. The City of Gold Coast also provides support to start-ups and growing businesses and R&D tax offsets is another way to access funding for innovation.

Government grants can provide much-needed business funding for small business owners without the burden of repayment. These grants are often available for innovation, research and development, export growth or hiring apprentices. While competitive, they can be a valuable source of funds if your business meets the eligibility criteria. Always keep thorough records and ensure you comply with reporting obligations.

Get A Small Business Loan

A traditional small business loan is one of the most common ways to access capital. Banks and alternative lenders offer loans for different purposes, including expansion or asset purchases. Terms vary, so it’s wise to compare interest rates, fees, and repayment schedules. Small business loans can be a good option if you need either long-term or short term business funding.

There is a common perception that securing a small business loan can be difficult. To be fair this is often true, particularly in your early days or if you don’t have a line of credit against your house. However, there are ways to increase your appeal to the banks. Most importantly you need a solid business plan, profitability projections and some of your own money on the table.

Using your accountant to approach the bank can be beneficial. If you can convince the bank that (together with your accountant) you have your finger on the pulse of your business then you’re a long way there.

Explore Debtor Financing or Funding For Your Business

Debtor financing, also known as invoice financing, lets you unlock cash tied up in unpaid invoices. This can provide fast access to working capital without waiting for clients to pay. It’s a practical way for businesses to maintain steady cash flow and meet operational expenses on time.

Traditionally thought of as a lender of last resort, debtor finance companies should not be overlooked as company funding options for growing businesses.

Provided the business is profitable, debtor finance allows you to borrow against the debtor book. There are a few drawbacks associated with using debtor funding, however when managed correctly these can be overcome and I have certainly seen debtor funding used to beneficial effect by business owners who had little or no ‘bricks and mortar’ security.

Some debtor funding companies will require the arrangement to be disclosed to the customer and outstanding debts are handled by the debtor finance company.

This needs to be handled with care and communicated as a good news story (i.e. ‘the business is growing and needs cash to fund that growth’ and ‘the business has outsourced its debtor management function thereby enabling the owner to focus on business growth’).

Debtor finance is also generally more expensive because of the inherent risk but if it’s your only source of funding and if you’re making a return on capital from your business that is greater than the cost of the debtor finance, then it is worth doing.

Using your debtor book to fund your growth makes sense. As your business grows, you can borrow more to fund that growth. However, this form of funding is not perfect, so speak to your accountant or business adviser before heading down this path.

Secure A Business Line of Credit

A business line of credit gives you flexible access to funds up to a set limit, and you only pay interest on the amount you use. This is ideal for managing seasonal cash flow gaps or unexpected expenses. Many small businesses use a line of credit as a reliable source of short term business funding.

There are a few differences between business loans and business lines of credit so it’s worth exploring which option works best for you.

Negotiate A Business Advance From A Strategic Partner

Forming strategic partnerships can be another creative way to secure business funding for small business growth. A partner may provide capital, resources, or skills that complement your business strengths. These alliances can also open up new markets and customer bases while sharing risks and rewards.

If you can find a major customer, or a complimentary business, who sees immense value in your idea you may be able to negotiate for them to fund the growth of your business.

Work With Angel Investors

Angel investors are individuals who invest their own money in early-stage businesses with high growth potential. In return, they typically receive equity in your business. Beyond funding, angel investors often bring valuable industry connections and mentorship, helping you scale more effectively.

Angel investors offer another business funding option for your business. There are a number of angel investor groups in most cities and a number of angel investors who operate outside of a business angel network.

Venture Capital Business Funding

If you are a well-established company looking to raise a serious amount of capital, venture capital firms may be an appealing option. Because of the size of funding provided by venture capital firms, and the high-risk nature of the loan, venture capital funding comes with a number of cons. Generally VC partners will want to be involved at the board level. Sometimes they may also require more than a 50% stake in your company, which means you could lose management control. Ultimately the decision to pursue venture capital should depend on whether it will open up much greater opportunities. In other words, are you better off with 50% of something or 100% of nothing?

Venture capital funding is suited for innovative businesses with high growth potential. Venture capitalists invest large sums in exchange for equity and usually play an active role in business decisions. While this means sharing ownership, it can accelerate growth and expansion far beyond what traditional funding might achieve.

Sometimes it pays to think outside the box. Airbnb’s founders got some early funding by selling Obama O’s and Captain McCain cereal during the McCain-Obama election campaign. It’s not orthodox but it did get them a foot in the door.

Understanding how to get funding for a business and choosing the right option can make or break your growth plans. At MGI South Qld, we help small business owners explore suitable funding strategies, prepare applications and manage cash flow effectively.

Want to discuss company funding options for your growing business? Often funding a growing business can involve using a combination of the above strategies. Contact us today to find out how our advisors can support you in securing the best business funding for your business goals.