Starting a new business is exciting but it also requires money. Don’t be discouraged if you don’t have any cash on hand; opening your business is still possible. Regardless of your situation, there are several ways for you to raise money. Here are eight financial sources for you to try.
One of the best ways to raise money is to borrow from yourself. If you have some extra money in your savings account, consider how much you can use to start your business. Depending on how much you can spare, you may be able to fund everything yourself.
2. Friends and Family
Don’t be too proud to ask your friends and family for help. You may be surprised how many of them are willing to loan you the cash you need to open your business. Some may even be proud that they were able to help you realize your dream of becoming an entrepreneur.
3. Bank Loan
If you have a good relationship with your bank, look into their business services and apply for a loan. You may be able to get a nice loan amount at a rate that you can afford. If your small business is working on a contract from the government, consider Federal government contract financing from a specialized financial institution if your bank can’t approve your loan.
4. SBA Loan
While looking at your loan options, you should also consider an SBA 7(a) loan from the Small Business Association. This type of loan is available to small businesses looking for affordable financing. The loans are serviced by private lenders but they are backed by the SBA which is a federal government agency.
5. Credit Cards
The use of credit cards to start a business is often frowned upon since they can push you into debt if you are unable to make a profit and pay them off. However, if this is your best or only option, they may be worth considering just to get you started.
6. Side Job
If you’re able to raise money with a side job working part-time, this is could be another way for you to fund your business. Even if you have to save some checks or wait a few months, it may be worth it in the long run. Depending on how much money you need to raise, this may be a good way for you to start small without taking out a loan or borrowing money from others.
Crowdfunding is a great way to get your business off the ground by setting up an online campaign to raise money. Another perk is that it provides you with social proof and potential customers who are willing to invest in you. This is a strong indicator that your business has potential and is on its way to being a success.
8. Angel Investor
Are you willing to share part of the equity in your business? If so, look for an angel investor to invest in you. This will require you to prepare a nice pitch that paints a clear picture of what your business is about and how you plan to succeed. These investors are also looking for businesses with high growth potential. If an angel investor decides to invest in you, they will give you money to help with your business in exchange for equity or a percentage of the profit.
Consider Your Options
Make a list of possible funding options and consider which ones are best for your situation. If using your savings is easier for you than having to repay a bank or SBA loan, then you may want to go that route. Regardless of what option you choose, look at the big picture and think about how it will impact you and your business both now and in the future.
Funding your business may be hard but it’s not impossible. You can begin by using one or more of these options or get creative and think of other things that you can do. No matter what you decide, remember that the ultimate success of your business is all up to you.