Being a business owner means that you have to put a lot of time and effort into managing your finances. But it’s not always easy, and you may have to outsource it at times. You may look at a payday loan or a business overdraft to help see you through. There are two other types of financing that are popular for businesses, and they are stock and asset financing. So, keep reading and discover our ultimate guide to stock and asset financing.
What Is Stock Financing?
Stock financing involves an outside investor who then owns a part of your company. This method of financing allows you to raise capital for your business in exchange for stocks in your company, so it can be a great way to boost your money without getting into debt. Stock financing allows businesses to bring in different investors who may also have a strong knowledge of their market area too, helping them to grow even more.
What Are The Benefits?
There are many benefits to stock financing, for instance, having an expert on your side to help guide you through any tough times. It’s also a debt free way of raising money for your business too. You don’t need to worry about making monthly repayments as the investor will get their money through the stocks that they own. Each investor will ask for a different amount in return for their cash, but it’s not normally enough to make them a majority stakeholder. In fact, it can sometimes be as little as 5% of your stock, ensuring that you remain the main owner. With so many benefits, opting for stock financing can be a brilliant way to help your business achieve it’s goals and succeed more than ever before.
What Is Asset Financing?
An asset is something that has value in your business that represents a monetary value. For example, a printing machine that’s worth a few thousand can be used as an asset in financing. Asset financing can mean one of two things; using finance to spread the purchase of an asset out over time or using your assets as collateral when accessing finance. Both of these can be super beneficial for you as a business owner, it just all depends on what sort of financial support you need.
What Are The Benefits?
There are benefits to both types of asset financing. If you use your assets as collateral for a loan application, it can make your loan more likely to be approved as it strengthens your affordability. However, you do need to be prepared to give the asset up if you suddenly can’t make your repayments. Using financing to purchase assets can be a brilliant way for your business to access things that it needs when you don’t have the money to hand right away. You’ll even be able to own the asset afterwards in some cases too. Others will allow you to upgrade or give it back as well, so you can really tailor your experience with the financing. Some of the times the lender will also be responsible for any maintenance and repairs for the asset too, so it can be extremely cost effective for you.
When running a business, there are lots of different types of finance out there that can support you and provide you with everything you need. Stock financing can provide you with capital without getting into debt, and asset financing can allow you to purchase what you need without worry. So, if you’re wondering how you can expand your business with the help of financing, be sure to check these two methods out, and you’ll soon see the growth that you’re after.