Every startup needs capital to fund product development, initial roll-out, employee wages and inventories. Apart from your own savings, there are several ways to finance a business. Most of these options require you to go out there and meet people. They also require commitment and resilience.
Get a Bank Loan
You can go for a bank loan to help you boost the business financially. However, the lending standards have become stricter. Many banks nowadays require you to have at least a running business before you get a loan. However, some banks have set up some funds for small business lending.
Crowdfunding involves raising money from many people. Most crowdfunding initiatives happen online and at relatively low cost. You simply set an amount you would like over a given period. You then invite friends, family members and strangers to pledge the money. You might be required to offer incentives to those who pledge in your favor.
Go for Short-Term Loans
There are a wide variety of short-term loans available nowadays. You can go for payday loans or auto-loans to get quick cash. Payday loans usually take minutes to hours to mature. You can borrow up to $3,000 depending on the security you give. Most lenders will give you a period of 30 days to repay the loan. Others may extend this period after you make an agreement. You can get helpful insights on short-term loans at https://www.paydaypixie.co.uk.
Look for an Angel Investor
There are several online platforms that connect startup owners with investors from different industries. Try your luck and see if you can get someone to help you fund the business. Prepare a good business plan to attract more investors. You also need do prepare good market assessment reports, competitive analysis data and marketing plans to attract quality investors. Be succinct, avoid jargon and develop an exit strategy in case things don’t go as planned.
Try Peer-to-Peer Lending
Peer-to-peer lending is a process whereby many people come together to lend money to each other. This form of lending removes intermediaries like banks, leading to cheaper interest rates and faster borrowing processes. There are several peer-to-peer lending sites out there. You simply place the amount you want to borrow on the website and your request will be picked up by someone. You can try Sofi Loans, Upstart, Avant Credit and Lending Club.
Get Money From Family and Friends
Friends and family can help you get your startup off the ground financially. You just need to stop being an introvert and ask them. Ask for specific amounts to meet your business target. Show a sense of commitment when reaching out to them so that they believe in you.
Use Vendor Financing
You can borrow money from a company and use it to buy its products or services. You can convince a company to defer your loan repayment period until you sell all the goods. A company may choose to extent the repayment period for six months or one year depending on your credit worthiness. This method is effective if you are planning to deal with products from one company.
Look for Incubators and Accelerators
Incubators can be of value if you are someone who accepts guidance, advice and connections. All incubators provide investment capital in exchange for an equity percentage in your startup. You have to agree to work in an incubator space for at least 90 days. You will be provided with direct access to resources, seasoned entrepreneurs and business advisers.
Getting your business up and moving is not an easy task if you don’t have the required capital. Try the options discussed above and you will have yourself to thank later.