One of the hardest parts of starting a new business is funding it. Traditional bank loans can be difficult to obtain, especially, for new business owners. However, individual investors may want more say in the business than you want to give. Luckily, there are many creative ways to fund your startup venture. Keep reading to learn more about some of your options.
In recent years crowdfunding has become a popular way to fund various startup ventures. This funding option works by offering and selling securities to the general public. With crowdfunding you can reach potential investors from anywhere in the world, but, you do have to be creative. You must promote your startup business in a way that attracts and entices investors. Then, you need to be able to offer them something for their investment, which could be in the form of shares in the business, or monthly dividends.
Applying for a loan from the Small Business Administration is a great option for those who can not obtain a conventional loan. However, the amount of money granted depends on the loan type. Amounts typically range from $350,000 for an express loan to $5 million for a 7(a) loan. The amount loaned also depends on the loan length and your credit score. To get a SBA loan you must be able to provide these documents with your application;
As you need several years of financial documents, this may be a better option for someone already in business, rather than a completely new startup venture.
Who you get help from can make or break your business. This is why it is so important to find the right people to help you. Consider utilizing consulting services to procure funding for your startup. The consultants can handle the financing details, allowing you to focus on the product itself and the launch. Other benefits of working with a consultant include faster funding, transparency, value, and communication. After all, the consultants have your business interests in mind.
The process to obtain a federal small business grant can be overwhelming, but it’s worth it. After all, this is essentially free money from the government to start your business. To start, research if there are any grants for your business type, your age, your occupation, area, or ethnicity. Many of these grants are given throughout the year, so you may also have multiple chances.
Similar to the federal small business grant, many local communities offer small business grants. These are usually specific to keeping employment within the area, and boosting the community through businesses. Check with your local Chamber of Commerce to see what grants are available and when the deadlines are.
Hard work, dedication, and budgeting can help you fund your startup without outside interference. Bootstrapping involves living and building your business on a tight budget. This ensures that every extra dollar you have can contribute to your startup launch. Furthermore, this means you have complete control over every aspect of your business. However, you should be aware that this is the riskiest method as if you run out of funds, your business will likely suffer. Aim to have a substantial amount of savings before launching your startup.
While there are many creative ways to fund your startup, not all of them will be suitable for your situation. Take you time to evaluate your finances, and make a solid plan before seeking funding and launching your business.
