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It can be hard for many small businesses to get the cash-flow they need for their business to grow. Here are some new ways to get the money flowing again.

Every business needs a healthy flow of cash pumping through its veins. Without enough money in the system to keep things ticking over, businesses grind to a halt.

If you own a small business, you'll know this all too well. One of your main roles is to keep the money flowing and this can be a tricky task. Luckily, new funding methods develop all the time with crowdfunding platforms being the latest in a string of funding innovations, but there are also plenty of 'old-fashioned' methods like loans from family and friends.

E-junkie has written about how small business owners can inject cash into their company before, looking at CDFI loans and small business loans, amongst others. But there are so many more ways that you can get the money you need. Every business is different and so obviously has different requirements – what you need to decide is which method of funding would work for you.

Here are three more ways that you could find the cash you need:

Loans from Friends and Family

When looking for a loan, it makes sense to start close to home. However, this method of funding definitely is not for everyone and while it has clear advantages in terms of flexibility and keeping the business within the family, there are also negatives to consider.

Taking out any kind of loan is a risk, but a family loan comes with a slightly different risk. While you may not want to fall out with your bank manager, it would be worse if you fell out with a friend or family member. Ask yourself, do you really want to mix family and business?

If you decide this is the right option for you however, there are several clear benefits. For example, the profits of your business will stay within the family and you're also likely to come to a more flexible and cost-effective arrangement in terms of paying it back.

If you know someone willing to help you financially, this can be a great option. But the key to this being successful (and to avoid complications later on) is to be completely honest about the how much you need and for how long, and to be clear about the risks involved.

It's best not to use this option as a last resort, as this could suggest that your venture is risky. However, if you do decide on this because you've been rejected for a bank loan, you need to be honest about this. You will have to provide your backer with an agreement which should look something like this:

• A clear proposal of what the money will used for
• Indicate whether this is a short-term or long-term investment
• Decide on a repayment schedule which includes dates, amounts and interest
• If the investor has a role in the business as a result, be clear about what these responsibilities are
• Explain what happens if the company was to go under
• Explain what happens if you fail to keep up with your repayments

This only a guide and it's worth getting professional advice before you begin. And most importantly, you need to be sure your friend or family member does not invest more than they can afford to lose – any business is inherently risky, no matter how confident you are.

Angel Investors

Angel investors can be really be an 'angel' to a struggling business – but not always. As with any funding method, there is no guaranteed success but if this method is right for you and you find the right angel, it could transform your business.

Quite simply, angel investors are wealthy individuals who will invest in your business in exchange for equity. This investment can be expertise as well as money, and often a combination of both.

Angel funding is usually a significant amount, typically between £100,000 and £1m, although it can go up to £3m. This may sound impressive but it's about more than just money. Angel investors tend to invest in an area they have extensive knowledge in, which means they will have valuable expertise and a vast address book of highly useful contacts. It's this knowledge that can help your business to grow too.

However, there are downsides to this 'heaven-sent' investment. It's certainly not a quick fix. It can take a long time to find a suitable investor and you need to ensure your pick the right investor for your business; otherwise it could struggle to work. Don’t just accept cash from the first person who shows interest.

You've also got to be prepared to give up a stake in your business in return, relinquishing some control over it. Angel investors like to become involved in the businesses they're backing and they'll want to ensure they get their money back – plus profits.

• If you want to attract angel investor, you need to make sure that:
• Your business can support high growth rate
• You have products with a competitive edge
• You can provide possible exit routes so an investor can see how they can release their investment plus profits

There are plenty of success stories for angel funding. Here Paraag Amin explains how his pitch attracted investment and how it helped him to develop his Style Card.

Crowdfunding

One of the newest and most rapidly growing funding methods, crowdfunding is a way to fund a business venture or product with money from the 'crowd', i.e. the general public. The process is fairly straightforward – an entrepreneur creates a business pitch to launch on a crowdfunding platform. Once live, anyone from around the world can pledge money in support.

In return for an investment, businesses can offer a product, service or share in the company, relative to the size of the investment. This could be anything from a novelty t-shirt to a free workshop.

There are three main types of crowdfunding models; pledge-based, equity-based and loan-based. For the pledge-based models, an entrepreneur pitches an idea and then anyone can pledge support – usually from as little as £5. Equity-based crowdfunding allows investors to get an equity stake in a business and the loan-based model works like a normal loan but with cash coming from the 'crowd' instead of a bank.

While fairly unpredictable, crowdfunding is responsible for a number of success stories with companies like Kano leading the way with their Kickstarter campaign, which raised $1.5 Million in just 30 days.

Crowdfunding works best if you're launching a new product or service, as many backers want something tangible and innovative to invest in. If you can create a buzz around your idea on social media then word can spread surprisingly fast with some campaigns raising £2.2m in just 24 hours!

To be successful, you've got to have a well-written and well-planned campaign pitch. Choosing your words carefully is key; this article demonstrates how phrases like 'not been able to' or 'even a dollar' can effectively kill a campaign.

While all this may sound like certain success, it's worth noting that only 44% of Kickstarter crowdfunding campaigns are successfully funded and the figure is even less for Crowdcube, at 10%.

While these are just three ways that you can inject some cash into your business, there are many more opportunities. For a complete guide to business funding options, check out this Thomson Local guide which covers almost every option and should help you make an informed decision.

Do have any funding methods that have worked well for you? Share your thoughts below.

Author Bio
Elise White is a bubbly freelance writer who left her beloved Paris after falling for the quirkiness of Great Britain. She loves everything social media and currently she works on different projects for Gkbcinc, a creative media and publishing company.