When it comes to developing a new product, you typically need a substantial amount of funds upfront. You can’t always obtain a bank loan that satisfies your business’s needs. However, there are plenty of other options available for financing your enterprise. All it takes is a little ingenuity and, of course, some risk.
Always proceed with caution when seeking capital for your business. This article details a few options you might consider to get your product off the ground. Consider them carefully, and you will be bringing your idea to market in no time.
Use a Charge Card
A charge card can be handy for entrepreneurs. They usually provide more available credit than credit cards, which gives you more flexibility when starting your business. Be aware that the terms might be harsher than a credit card, so make sure you read the fine print before spending all of your credit.
Try Creative Accounting
Utilizing your accounting department can be a powerful tool for maintaining plenty of liquid capital. With services like accounts receivable financing, you can get an advance on the invoices you send to your customers. For a fee, you don’t have to wait the full 30 or 60 days to receive payment, potentially allowing you to expand your business faster.
Launch a Presale
You can do a presale if you have a product you believe in but need cash to manufacture it. Offer incentives for preordering, and you can amass funds before you even build the product. This can be a powerful strategy combined with accounts receivable financing.
Partner With Your Supplier
Try negotiation with suppliers for terms that are more favorable to you in the short term. Sometimes they will provide the distribution and production before you pay. Then you can sell the product and pay them back.
Approach Large Customers
Bring your product idea to potential customers who need it to solve a problem. If you can convince them that the product will increase their business, they might finance the operation. Offer them discounts or free trials as an incentive, and as a bonus, you might build a strong business relationship for years to come.
Establish Credit Early
Banks might be more willing to offer you credit before you start your business. It can be wise to plan ahead and have financing available. Approach a few banks and start shopping for some personal loans before you need them for your business.
Financing can be difficult to obtain before you develop a product. However, if you have a product you believe in and can prove it’s valuable, your potential customers will be willing to work with you.