business financeBusinesses are vastly different from one to another; however, the people behind each and every one of these businesses have at least one thing in common – they had to find a way to financially fund their business.

Regardless of what type of label you may put on it, all financial solutions consist of debt, equity, or a combination of both.

Debt: Is a loan or line-of-credit for a set amount of money that needs to be paid back within a set period of time.

Equity: means that you will sell a portion of your business and that owner get voting rights and cash associated with that part of the equity stake.

Below are some common ways to fund your small to mid-size business to get started or to cover some additional expenses.

Saving.  Cold hard cash is the smartest, safest, and most conservation way to fund your business.  However, the risk increases if you use monies set aside for retirement to fund your business, as you may lose more than cash if the business fails.  It is strongly advised to speak to a qualified financial advisor prior to tapping into this type of financial resource to fund your small to mid-sized business.

Credit Cards.  A cash advance on a credit card is an expensive, but useful option to increase the flow of cash throughout your business.  It is important to remember that credit cards are linked directly to your credit score number.  If payments are not made timely, it can cost you your financial reputation.

business finance officers shaking hands with business ownerInvestments/friends and family. You may offer people you know a piece of your business – but there are a couple of major risks with this option.  One being that the relationship may be negatively impacted if the business fails, and the other being that you may gain a partner that is not so silent.  If you choose this route, have all details in writing that is drawn up by a lawyer, so there is no miscommunication down the road.

Loans.  Getting a business loan from a bank may not be easy because a bank usually wants proof that the business is successful, so they are almost guaranteed to get their money back.  This may not be an option for a small business that is less than six months old. –

Factoring.  This option is beneficial is your clients are slow in paying their invoices causing a cash flow problem in your business.  The problem with this business financing option is that it can only be utilized if you work with government and/or commercial clients that have reliable credit.  When this option is used properly, it can increase your business cash flow and also allow you to obtain new clients.  If you quality, this type of loan is relatively easy to obtain and the line-of-credit is flexible.

Purchase Order funds.  This type of business funding has been gaining popularity in recent times.  This option is designed to aid businesses that resell product at an increased price to pay their supplies.  Basically, the finance company will pay the supplier directly (on your behalf) which will help you to place larger orders.  Due to the fact that is option is costly and may be a challenge to qualify for – it is only beneficial for transactions that have a high margin and that do not require any customization’s on products.

Equity Crowdfunding. This option is an alternative to borrowing money from traditional financial institutions because you give a piece of your company to investors and they provide you capital for your business.  This was very common for new tech companies; however, the trend is moving into non-tech business.  Typically personal financial data is not required, but you will need an investor presentation. –

For instance, imagine you appear on the popular TV show “Shark Tank” and Mark Cuban invests in your business – this is what is required to be successful to raise money on an equity crowdfunding platform.  In the same way, you can set a financial goal and friends, family members, and even strangers will pledge money toward your business.  Since pledges will not get a return on their investment or even a donation tax break on their money, it is important to entice pledges with an incentive.  For example, if you are writer, you can offer a signed copy of your book to pledges over $15 or if you are opening a restaurant, an enticing offer may be a free dinner.




  • Select reliable staff. Optimize your selection processes and human resources to hire creditworthy people who lack the possible financial problems to reduce the possibility of temptation within your organization. Socio-economic studies are very reliable and help especially when contracts are for positions where they have to manage money.
  • Establish identification mechanisms. Provide your employees with badges with photography, identity codes, passwords and personalized users in the systems and in general any mechanism that allows to establish at all times, who is responsible for everything within the company as well as the hours of entry and exit from each person. This may sound cumbersome but it is essential to be able to demand responsibility at all times.
  • Implements audit mechanisms. A simple but effective audit is to check regularly randomly and surprisingly that your staff is complying in an orderly manner with their responsibilities. It consists in requesting that they show you important documentation such as receipts, invoices and boxes that are totally square and up to date. This control will allow you to detect possible suspicious or anomalous actions and take preventive measures before an event occurs.
  • Be very jealous with the information. Information is one of the most important assets of your company. Do not allow anyone to have open access to all kinds of data such as customers, products, inventories and prices. And much less financial and banking information. Be very jealous and selective and allow only a few people you trust to have access to.
  • It uses formal control mechanisms.  Ensure you have access control systems in place. Many businesses in their desire to reduce costs use informal accounting mechanisms that are often entirely at the discretion of employees, allowing the possibility of altering systems and reporting less actual billing. A good investment that will help you have more control is to invest in automated control systems such as cash registers and inventory and warehouse software systems.
  • Train your staff against criminal events. It never hurts to pay a security company to train your staff on how to act in cases of critical situations or to prevent possible attacks such as robberies, kidnappings and assaults. A better trained employee can make a difference in order to reduce losses for this kind of situations.
  • Protect your vehicles with satellite systems. One of the best mechanisms to reduce attacks against your merchandise transport vehicles is installing satellite tracking systems. These are not only very effective in the issue of location but also help the criminals to leave before attacking your vehicles. The costs of these systems are not low but they have tended to be increasingly accessible. And make sure you have a very visible sticker that says “Truck protected by satellite system”.
  • Invest in computer security. The security of the systems is increasingly important as many frauds can be perpetrated from the network (internally or externally). Advise and implement certain minimum actions such as acquiring a good firewall, antivirus or regular habits of changing passwords and taking backup copies will reduce the chances of risk.

Many security experts have even concluded that the greatest vulnerability in the company is just inside it. The percentage of thefts and scams that are orchestrated internally is very high and therefore your business plan should contemplate a security strategy within the ordinary budget of expenses.

The starting point to talk about security is to convince the most important person in the organization and is just the owner, manager or directors. Why? For two important reasons:

Precisely because the issue of prevention is a fairly intangible issue whose benefits are hardly visible unless an event occurs.

Because security costs can be as high as the level of protection you want.

Therefore, we must be very clear about the importance of implementing low-cost security measures and strategies that protect your business without exceeding the limits of your budget.

The second important aspect is to be clear about the areas that you must protect against attacks and attacks and according to the studies, the main ones are:

Foreign Security

Internal security

Informatic security

Of course, besides allocating a certain budget to security (between 5% and 20%), you can observe a series of measures and habits that will help you reduce the possibility of risks and save you thousands of dollars in protection systems:…