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How to Raise Cash for Your Business Without a Bank Loan

When it comes to starting a new business, it can be difficult to raise the funds you need. Even if you start small, you may find that your cash flow quickly begins to run out as the business grows. Most companies will establish payment terms with new business customers, which means they will be giving them a certain amount of time before their payments are due.  In most cases, this will be between 30 and 60 days.

Once your customers place an order, you will then need to place your own order from your supplier. It is highly likely that your own invoices will be due for payment before your customer’s invoices are due. Unless you have large reserves of capital, you can see how you may end up with cashflow issues. But as a new business, you may not have the credit history required to access a bank loan. So, what can you do to raise the capital you need to keep your business running efficiently? Below are a few ideas for you.

Use Your Own Money

If you strongly believe in the potential of your business and want to see it grow, you may have already decided that you are ready to make a long-term commitment to it. It is likely that you have already committed money to the business, but rather than see it fall at the first hurdle you may need to invest more of your own money to get it off the ground. Although you might not want to start dipping into personal savings, it may be necessary to tide you over and allow your supplier invoices to be paid while you wait for your customers to pay theirs. The benefit of using your own savings, or even selling some of your assets to resolve cashflow issues, is that you will not have any fees or interest to pay.

Invoice Factoring

If you do not have personal savings that you can use or any assets to sell, you could consider factoring your invoices. The good folk at Utah’s Thales Financial say that invoice factoring is a quick and easy way to generate cash for a business. Business owners can essentially ‘sell’ their unpaid customer invoices to another company who will then collect the payments when these are due. The business pays a fee to the finance company (typically a percentage of the invoice amount).


Crowdfunding, the process of raising funds from a group of investors is something that many new businesses are exploring these days. You can use social media platforms to exchange equity for investment in the business or other rewards that people might want. The problem with crowdfunding is that it is not always successful, especially if you don’t gain the exposure that you need, or people are not feeling very generous towards your campaign.

Borrowing from Family and Friends

Some will turn to family and friends to help when facing cashflow problems in their business. If you are considering approaching someone you know for a business loan, it is important to be able to present them with information about what the money is for as well as your projections for growth. You should also draw up an agreement detailing the amount of money forwarded and how and when it will be repaid.


Bank loans are not always available to new businesses without any type of credit history. Thankfully, there are other ways to raise capital if needed. This includes invoice factoring, using personal savings, or asking a family member for a loan.

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