Without money, even the most revolutionary and world-changing of business ideas will go exactly nowhere. Now that you know what amazing products or services you want to sell to a hoard of eager customers, it’s time to get serious about cold, hard cash. Some of the best ways to fund your business might actually surprise you.
DO IT YOURSELF
When considering how to get money for your business, the first picture that might come into your mind is of you walking into a bank, documents and business plan in hand, to beg for dollars. In truth, large financial institutions are generally not the ideal choice for small businesses like yours. Instead, consider taking your capital-raising into your own hands.
If you are both organized and passionate enough to get this far into launching your company, you should be able to communicate your vision to friends, family and other private investors. If you have savings of your own, contributing a portion to your startup is one of the best ways to communicate to others that you are willing to do more than just talk about this exciting opportunity.
In addition to your own money, there are other ways you can leverage your personal resources to get your business going. Personal loans, zero interest credit cards and even drawing on retirement and 401(k) accounts are all options. Just be certain that you understand the legal and tax consequences of any steps you take before making a move.
SBA LOANS
The Small Business Administration (SBA) is a federal agency that partners with lenders to provide low-interest loans for entrepreneurs. Although the application process can be on the arduous side and involves presenting a fair amount of documentation, this financial mechanism is ideal if you meet the qualifications.
NONTRADITIONAL LOANS
If you don’t have a history of solid cash flow and robust revenue as well as an acceptable credit score, you might find that the path to an SBA loan is closed to you. However, that doesn’t mean you can’t get the financial support you need. Nontraditional loans are becoming an increasingly popular and respected vehicle. In many cases, you can apply online without needing to provide extensive documentation, and you will probably get an answer within a day. By contrast, approval for a traditional loan from a bank can take weeks and even months. However, the convenience and speed of nontraditional loans literally come at a price. Expect to pay significantly higher interest rates and fees.
CROWDFUNDING
In addition to potential investors such as friends and family whom you know, crowdfunding enables you to tap into the wider world of people who are interested in what you have to offer and are willing to put money behind you. All you need to do is to set up a page on a crowdfunding website that highlights your unique vision, get potential investors excited about what you have to offer and watch the funds roll in. On sites such as this, it is important that you make your funders feel like they are getting in on the ground floor of an golden opportunity. To that end, be prepared to offer them free products and services once you get up and running.
As you can see, looking for the best ways to fund your business doesn’t necessarily have to involve donning your job interview suit, squeezing your feet into those impossibly uncomfortable shoes and strolling into a stodgy bank. Believe it or not, there are many potential business funders out there just waiting to partner with you in your mutual quest for profit and success. All you need to do is to think outside the box and find them.