Small Business

4 Financing Options to Scale Your Small Business

4 Financing Options to Scale Your Small Business  

Running your own business can allow you to become financially independent to build wealth slowly over time. 

It’s said that a profitable business’ next move should involve scaling up operations. If your small business has witnessed a stellar market performance in consecutive periods, you’re likely ready to take things to a whole new level, i.e., scale up. This is to fully realize your business and the whole team’s maximum productivity potential.  

Unfortunately, scaling up is no piece of the cake. Apart from facing stiff competition from already established, much bigger firms, small companies like yours face financial challenges. Your organization needs to have sufficient funds to work with to scale up successfully. The fresh capital will be used to buy new equipment, high additional personnel, pursue business improvement projects, and so on.  

Planning to scale up soon and don’t know where you can source much-need funds? Keep on reading below. Listed are some financing options small businesses like yours can take advantage of.  

1. Apply for a Loan  

Loans are the most prevalent source of funding you can use for your business scaling-up ambitions. This involves borrowing money from financial lending institutions to be paid later on with added interest. Other payment terms, such as monthly payment amounts, loan duration, and the like, are discussed between you and your preferred lender during a loan consultation before your loan is approved and released.  

There are different types of loans. One of them is the small business working capital line of credit. This loan gives you access to funds, on top of interests, that fall within the credit limit you’re approved for. The business line of credit loan offers a flexible way of borrowing money when scaling up your business. And because it’s unsecured, you won’t need to be worried about providing collateral or security assets to be given access to the funds you need.    

Another type of loan you can consider for your small business is the equipment loan. This helps you find and purchase machinery and equipment for your company. Your lender will hold a lien on the purchased equipment, which will only be released once you fully repay the loan. Equipment loans could be ideal if you want to add a new machine to your production line or buy a new van to help meet delivery needs.  

2. Try Out Invoice Factoring 

If you sell goods or provide services on credit to your patrons, you can consider invoice factoring to enhance your cashflows and scale your small business. Businesses that offer longer payment periods to their clients can take advantage of invoice factoring.  

With invoice factoring, you’ll partner with a third party (called a factoring company) who’ll buy your accounts receivables and charge a small fee after evaluating them for viability. Most of the time, factoring companies will pay a huge chunk of the computed outstanding accounts receivable and pay the remainder once they collect the remaining funds.  

If your small company needs money to scale up and has accounts receivables waiting to be met, invoice factoring might work for you. Besides giving you a fresh injection of ready-to-use cash, working with an invoice factoring form has several other benefits. For instance, it ensures you aren’t wasting time engaging with customers to settle their debts. As such, you can focus instead on other more important business operations like research and planning to meet scaling-up goals.  

3. Take Advantage of Available Government Business Grants 

Availing yourself of government business grants is the most cost-effective way to finance the growth of your business. Basically, you’re tapping into free money provided by the government. 

Though they sound very enticing, keep in mind that government business funds are limited, highly competitive, and strictly regulated.  

Many governments only allot a small portion of their taxpayers’ money as business grants for companies that align with the state’s or country’s economic plans and direction. Due to the limited amount of available funds up for grabs, approval for a government business grant is very difficult. The application process is usually gruelling and involves many phases, documents, and the like.  

To top of that, many governments have strict requirements on how the funds are to be spent along with the proper documentation regarding the use of the grant money.  

If you’re planning to tap into government business grants, make sure that you apply for a grant specifically for small businesses looking to scale up.  

4. Consider Community Development Finance Institutions  

Because small businesses are considered riskier loan customers, many traditional lenders are reluctant to let them borrow money. This has led to many beginner entrepreneurs being locked out of financing options they can avail of to expand their operations. Luckily, community development finance institutions have sprung up and addressed this glaring disparity in financing access. 

You can work with community development finance institutions to find funds to scale your small business. These are non-profit organizations established with a single purpose: to minimize (and eventually eliminate) disparities in access to funds for small businesses. Hop on the web to conduct a quick search to find the nearest community development finance organization you can work with.  


Scaling up operations is no easy task for any startup. This is especially true, compounded with the fact that limited financing options are available for small companies planning to expand their operations in the name of growth.  

If you’re a small business owner at a loss for how to source funds needed to take your budding enterprise to the next level, check out the list featured above. All the best!   

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