Finance November 12, 2015 Last updated September 18th, 2018 1,573 Reads share

What is the Right Choice When Your Business Funding Gets Unstable?

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Small businesses are the cornerstone of American democracy and they have been for generations. But running a successful business in challenging financial and social times can be difficult. As people tighten their proverbial belts they often stop spending money and that can mean less sales and thus less income for your business. In addition, as petroleum prices continue to be unstable, building supplies and grocery prices rise, and inflation seems almost out of control, everything seems to cost more. Sometimes, to keep a business alive you need to find more business funding, but how?

Following are five tips to help you make the best choices about funding your business during unstable times:

#1. Use your personal savings or properties

One of the most common ways that a small business can get additional money is through direct investment by the owner. If your company needs some extra working capital you should consider investing your own personal savings into the organization or even making a loan to the business from your own checkbook.

You could also sell personal property that you own in order to raise business capital, you could mortgage your home or other assets, or you could take out a personal loan based on your own credit and your own personal responsibility.

Finding the money on your own, or even borrowing from a family member, can be the easiest, fastest way to get working capital. Of course, this puts your personal financial security at risk and thus is something that you need to carefully think through.

#2. Sell off some of your company’s shares  

If your company sells actual stock shares then selling shares in the company can be an effective way to raise money. Of course, there are many considerations in selling off shares, including the concern that if you sell too many shares you could lose control of the company or you could damage the company’s value, so use this option carefully and always consult an attorney or financial advisor.

If your company does not sell shares on a stock exchange you may still be able to raise the capital that you need by selling ownership rights in your company or letting a partner buy in. Just be sure that you always maintain at least 51% of the ownership rights. Think about it; if you sold 30% to one person and 30% to another person you may think that you are safe because you own the highest share at 40%, but if one of those with the 30% sold to the other, or if they worked together, you could lose control of your business.

#3. Sell your structured settlement payments

If you have a structured settlement where you are receiving fixed payments on a sum of money that you were awarded in a lawsuit you might decide to use that money to fund your business expansion or other needs. Be sure to choose the right company to sell settlement payments to, one that will work with you to buy just the amount of payments that you need to help your business thrive and give you the cash that you want.

When selling structured settlements remember to only sell the amount of payments that you absolutely need to sell; always try to reserve as many payments as you can to better secure your financial future. Look at whether the benefit that you get from selling your payments outweighs what you lose. Also, be sure to choose a structured settlement buyer who shows a genuine concern over the well being of you, your family and your organization, one who knows the pros and cons of selling your payments and can help you to make the best decision for you, not for them.

#4. Use your short term fixed deposits

Short term fixed deposits are a great way for organizations to invest their profits and extra cash on hand in a way that makes more money and yet is still relatively liquid. These deposits are generally made with a commitment to keep the cash invested for one or two years; there is a penalty for withdrawing the funds before the end of the investment date. The money is invested at a guaranteed return on investment, anywhere from a fraction of a percent up to two or three percent.

If your company uses these types of short term fixed deposits cashing them in may be an effective way to get the cash that you need to meet current bills, buy more stock, make payroll and so forth. Even if you have to take a loss due to early withdrawal that loss might be less than you would pay in interest were you to take out a standard loan to pay your business costs and expenses, or less than the loss to your business if you do not inject more money into it.

#5. Consult your financial advisor

Available financial tools are changing all the time, as are markets and interest rates. A skilled financial advisor can help you find creative and effective ways to get the money that you need to keep your business ahead of the competition. Be sure to choose a financial advisor who has the education and experience to provide good ideas, and that comes highly recommended or with a good reputation. If possible, find a financial advisor that you pay a flat rate rather than one who makes money off of the investment options that they talk you into.

Moving Your Business Forward

With the right know how, enthusiasm, dedication and money you can propel your business – small, medium or large – into the future. When it comes to good business remember that saving money is almost as good as making money. When times are tight look for ways to cut costs without compromising safety, integrity and your product.

If money is what you need, consider all of your options, looking for just the right fit for your specific situation considering questions such as: why do we need more money? How much will this money cost us? What will happen if we do not get more money? Which method of increasing our funds makes the most sense for us?

Think things through and you can make the best decision for your business.

Images: “ funding for welfare collection fund raising for charity money donation for non profit organization /


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