When the idea of launching a business takes hold, the immediate question that surfaces is, “How much money do we need?” What often goes underestimated is the next question, “How much money do we need to keep it running?”
Many startup entrepreneurs tap into their savings to kickstart their businesses. However, the financial demands of a startup are substantial, and relying solely on self-funding can be a precarious path. Uncertainties like changes in sales, workforce, prices, costs, taxes, liabilities, overhead expenses, or a global pandemic, for example, can emerge without warning. It’s a tightrope walk, even with a prime location, a beautifully designed retail or e-commerce store or workspace, and a well-thought-out business plan.
Starting and operating a small business with limited capital is like navigating treacherous waters on a leaky boat. Yet, the fear of securing business funding to grow a business is common and can be attributed to concerns about control, fear of failure, or increased liabilities. Some of these worries can be alleviated with the help of business funding, although many people still hold misconceptions about what that involves.
To make it easier for small businesses to access funding and manage their financial data, Aaron Velazquez started FairFigure. This platform levels the playing field for entrepreneurs and startups with limited capital or resources. FairFigure relies on advanced data analytics and technology to give small business owners the tools and insights they need to manage and improve their business credit profiles effectively, which means they can access better funding opportunities.
Common Misconceptions about Business Funding
- Securing Funding is for Struggling Businesses: The most common misconception is that if a business borrows money, it means the business is failing. Some of the fastest-growing businesses in the world use loans to expand working capital, purchase assets, hire new talents, improve products and services, space renovations or expansions, and other purposes that lead to long-term growth.
- Application Process Takes Too Long: Thanks to technological advancements, the loan application process has become significantly more streamlined and accessible. FairFigure has made application easy and can be accomplished in just 15 minutes. After approval of the application, business owners can secure funding within as little as 24 hours.
- Interest Rates will Eat your Business Alive: When interest rates are high or on the rise, it can spell trouble for your business, potentially taking a big bite out of profits. Knowing the available options, such as Term Loans, Receivable Advance, Line of Credit, will help business owners make the best choice. Using FairFigure, entrepreneurs can compare multiple business loan offers at once and review the most favorable option that matches their funding needs.
- Big Banks are the Only Trustworthy Lenders: The lending industry has diversified with online lenders, peer-to-peer lending platforms, and microfinance institutions. These alternative options frequently provide more tailored solutions, faster processing, and improved terms. FairFigure allows entrepreneurs to get funding on the most favorable terms from more than a hundred funders. Built by serial entrepreneurs and former venture capitalists, Angels Partners helps entrepreneurs connect with industry-relevant investors. It hosts a vibrant community of hundreds of investors actively seeking opportunities on the platform, supported by a database of over 100,000 investors. Its mission is to assist founders in accelerating their fundraising process and securing more meetings with targeted investors https://angelspartners.com/.
How does your business credit score affect your potential funding?
Business credit scores are numerical representations of a business’s creditworthiness and financial stability. They are similar to personal credit scores but are specifically designed for businesses.
Business credit scores are used by lenders, suppliers, and other financial institutions to evaluate the risk associated with extending credit or providing financing to a business. A strong business credit score is a valuable asset for a company, as it can enhance its financial flexibility and credibility in the business world.
The great news is that FairFigure has formed partnerships with the three major business credit bureaus, Dun & Bradstreet, Equifax, and Experian, collectively known as the “big three” in generating business credit reports. These reports allow FairFigure to analyze customer payment behavior, enabling an accurate assessment of a customer’s risk profile before granting credit or other financing options.
Small businesses often operate on small budgets, with minimal staff and limited time. Using tech like FairFigure can help level the playing field and improve financial management.