Growing a business is as exciting as it is challenging. There’s the prospect of reaching new customers, selling more inventory and generating more wealth, and all of that is coupled with the fear that you won’t have the money to pay for it all. Growth capital is a necessity for any business owner looking to expand. There are many ways to finance your developing company and it’s important that you weigh the pros and cons of each.

Your Wallet

Naturally, you don’t have enough cash to cover all the costs of expansion. What you might have is enough money lying around to pay for some of it and get the ball rolling. Financiers look much more favorably upon entrepreneurs who are willing to put their money where their mouth is and show personal investment. You don’t have to sell your home or pick up a second job, but investing some of your savings or redirecting your vacation fund can go a long way towards starting the process of growth and showing potential lenders that your business means business.

Venture Capital Firms

These companies take a special interest in small and growing business and do so on behalf of the clients they serve who are looking to earn their return through equity. This enables you to receive funding from a firm that will care about and potentially have influence over your company. While a bank will expect repayment on the money you borrow no matter how your business fares, venture capital funds provide needed growth capital that only pays dividends if you succeed. If you’re going to borrow money, it’s nice to get it from someone who is actually concerned with where that money is going. While this practice may dilute your share of the business, it substantially increases your ability to maximize growth.

Angel Investors

In some ways, these investors are the perfect world version of venture capitalists. As opposed to going through a large firm, an angel investor is an individual who will back your company with his or her funds. The intimacy of this type of lending can be very beneficial to the business owner, as you stand to inherit quality economic advice and be connected with other company owners and useful business contacts.

How you obtain your growth capital can affect your company’s ability to grow; it’s important that you be aware of all the options and understand how they affect your particular business practice. Do the research, make the right choice and before you know it your company might be double the size.