Every startup has a chance to survive through both challenges and successes. Once you have laid down what you need for the business to operate, the next step is looking for funds. For most people, this is quite a task especially if there is no prior planning. Where exactly do you get funding for your business?
- Personal Savings
Before actualizing your idea, it’s advisable that you have some savings tucked away for some time. Savings are a great way to start you off on the financing journey. By now you have worked on how much you need for the business. Check your savings and see if they can cater for everything. The amount may not be adequate for all your plans. At this point, look for other sources to get additional funds. Very few investors will invest in you when they know you have not had any input to your business first.
- Family and Friends
You can rarely go wrong on this option especially if you have great relationship with your family and friends. Sell your idea to them as you convince them to finance it and work out on the payment plan. This group of people will support you and your idea. You can even have them come as partners of the business especially if you find any who share the same goals and objectives as you do.
- Small Business Grants
Business grants are a great way to actualize your dream. Small business grants is free financing provided by the government and not-for-profit organizations. They are not readily accessible for everybody. However, there are numerous organizations offering them. There are funds specifically for women entrepreneurs while others are for everybody. You can search online for such opportunities but, be careful not to fall into the trap of scammers and end up losing money. Depending on where you stay, find the different channels available for grants. Ensure you have a detailed business plan for such.
- Peer-to-peer Lending
Peer to peer lending is a trend that has set foot into the borrowing and lending market. This is an avenue where you can borrow online. The difference with other channels is that it is a pool of lenders who lend out to borrowers through a secure platform to safeguard each of the parties. Before going for this avenue, ensure that your credit is good as it is a significant determinant if you qualify to get a loan or not. In the event that your credit is not good, you can contact a credit repair company to discuss the way forward. They help identify if there are any anomalies on your credit report and so much more. For more, go here to find out how they operate.
- Angel Investors
There are many angel investors out there. These investors come in and invest in your business, give you the funds you need in exchange for equity in your company. Sometimes, they also provide you with advice out of experience as they guide you through the journey. Research on how to get such investors as they could be what you need to help your business grow as they input funds as well as become like mentors in this journey. Look for straightforward investors who do legit business to avoid risking your business.
- Financial Institutions
Financial institutions are also an excellent channel for funding. This funding comes in form of personal loans. Such institutions can be banks. The downside is that financing through the bank is a quite a process and most likely if you are a startup, they may shy away from giving you credit. Also, they take into account your credit history before loaning you. Does your credit history show any late payments? Then they may have reservations about giving you the funds. Before applying for a loan in the bank, ensure that you have an excellent credit rating as this will provide them with confidence to release funds for your business.
Financing is essential in every business as it is the driving force. Vendor financing is also another aspect you could consider. This is where you convince your suppliers to defer payment for a few months. You could agree that you pay for the goods purchased once you make sales after every three months or so.