For small businesses, competing with large companies may seem daunting – if not impossible. But if you want to compete with other businesses, you need to secure financing to increase your production or offer more services. Fortunately, you don’t need to spend much to step up your game. Here’s the secret to competing with big businesses without having to spend much.

1. Invoice Financing

If you have outstanding invoices, you might want to check out invoice financing. This type of financing allows you to ‘sell’ your unpaid invoices to a third company at a discount. Invoice financing is perfect for businesses who don’t have a remarkable credit rating or business history since factoring companies mainly focus on the creditworthiness of your customers. With invoice financing, you won’t have to wait for 30 to 90 days to get paid. Many small business owners use this type of financing if they need immediate working capital to grow their business.

2. Equity Financing

In equity financing, a business sells some of its own shares for additional capital. There are numerous venture capital investors who specialize in an industry, stage or growth, or both. Make sure you connect with the right type of investor for your business.

Keep in mind that equity financing may be risky when it comes to your long-term ROI; a new partner may have a different opinion in mind when it comes to running the company. Most venture investors only want to fund growth-type businesses because the biggest ROI is in the payout after the acquisition. For small businesses, equity financing is easier to achieve than debt financing

3. Debt Financing

Debt financing is similar to making a large purchase using a loan. Lenders give business owners a lump sum of money upfront, which they have to pay back (with interest) over a fixed repayment period. Debt financing usually involves interest rates, collateral, regular repayment terms, and limitation of use.

For small business owners hoping to grow their business, taking on more debt may seem nonsensical. However, debt financing may be more beneficial for the growth of your business. Once you have repaid your loan, you still own 100% of your business and the interest you paid for the loan is tax-deductible.

Qualifying for debt financing is not that easy. Generally, your business has to be in operation for at least two to five years, with a sales record within $500,000 to $1 million. Around 58% of startup companies with zero to two years of experience have a hard time qualifying for debt financing, while only 38% of established businesses encounters problems when applying for business loans.

You don’t have to exhaust your personal and business savings to grow your business! Access to additional working capital is the key to competing with big businesses in your industry.