Any growing business needs growth capital to scale. Sure, you want working capital to be able to pay your bills every day, but if you want to take your business to the next level you will eventually need growth capital to expand.
What is Growth Capital?
When you are looking at the long-term expenses required to grow your business, growth capital provides an effective option for funding those expenses. It allows you to fund the expansion of your business, add personnel, or fund any other long-term business expense. These higher ticket items typically do not qualify under working capital so to effectively fund them, most businesses rely on growth capital.
How to Acquire Growth Capital
Most businesses acquire growth capital through a traditional business loan. These loans provide you with immediate capital with the expectation that they will be fully paid off after a set period of time, usually somewhere between two to ten years, at a set interest rate.
To determine the risk of loaning your business growth capital, a lender will look at your credit score, net assets, operating expense ratio, the potential for growth, and a wide range of other factors. These loans can be used to pay for large expenses required for your growth with the expectation that those expenses will carry a high return on investment for your business.
Also, as your business earns money and increases its working capital you may begin investing some of that revenue towards growth capital so it’s available when you need it. As these investments grow, eventually you will build up hefty savings in a growth capital account.
Other Sources of Growth Capital
Consider seeking out other investors into your business. Can you take on a silent partner or an angel investor who will give money for a stake in your company? While you might give up some control, your company may blossom in the long term.
Given the ever changing landscape of the Digital Marketing industry, taking on an industry investor may also provide you with guidance throughout your growth. This experience and expertise can sometimes be worth more than the capital you acquire from their investment as they can help provide you with new opportunities for additional growth.
If you have a growing digital marketing business, then you are a great candidate for a third-party investment. Better yet, if you remain up to date on all of your bills with money left over for profits, it may be time to think about how you can expand and scale your business for the future. Growth capital provides an effective way to expand your business growth turning your passion project into a full-scale enterprise.
If you are ready to grow your digital business to the next level, Get In Touch