6 Creative Ways to Finance Your Business

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Finding funds to start or grow your business is harder than ever. Here are tips that will come in handy when looking for funds for your startup or business.

Learning how to get funding for your startup or small business in most economic climates is a challenge whether you are looking for capital to start your business or money to grow it. The more challenging aspect with the current state of affairs, finding funds to start or grow your business is harder than ever.

Here are some tips that will come in handy when seeking how to get funding for your startup or small business:

1. Compare your options

fundera

You can compare all of your funding options with just one easy application with sites like Fundera. Fundera’s partners offer a range of products, including SBA loans, lines of credit, short term loans, merchant cash advances, equipment loans, invoice financing, and personal loans (that can be used for business).

fundera

If you are completely overwhelmed by how to get the funding for your business, Fundera is one of the best places to start your search for business funding. You can see which funding options you’re eligible for and only have to provide basic business information. Fundera makes it so easy to get and compare offers from the best funding options in the industry, with just one application. If you are interested you can get more information from Fundera here.

2. Crowdfunding

Crowdfunding sites like Kickstarter and Indiegogo provide you with an alternative yet fun way to raise money for your business. You only need to set a goal of how much money you hope to fundraise over a specific time then tell your friends and relatives to pledge money. Although there is no long-term ROI for people who support you, this has not stopped crowdfunding sites from being successful.

3. Secure an SBA Loan

Since banks are reluctant to take risks with their own money, you can turn to SBA programs. According to the owner of SmallBusinessLoans.co, even startups have a chance of getting SBA loans.

Here are the qualifications that you need for an SBA-backed loan:

Determine if your business is small. Your business should match the government’s definition of a small business.

Rejected from financial institutions. If you can obtain funds for yourself, you will not qualify for an SBA loan. This means your loan application must be turned down from financial institutions such as banks.

Apply for a commercial loan. After finding out that you qualify, you can apply for a commercial loan from financial companies that process SBA loans because the Small Business Administration does not provide loans directly.

4. Use a Credit Card

Using a personal credit card to fund your business is very risky. If you fall behind on your payments, your credit score will suffer. On the other hand, paying just enough at the end of the month might lead to debts that you might never eliminate.

If you use your credit card responsibly to get out of small financial issues, you will be fine; just exercise caution in its use.

5. Attract Angel Investors

All the old rules apply when pitching an angel investor – you need to be concise, have a good exit strategy, and avoid jargon. However, the current economic climate has made things even worse.

The following tips will help you to win over an angel investor:

Do not follow fads. To succeed, you need to follow your passion: are you passionate about your business or did you start it to make money from the latest trends? An angel investor will know the difference and if your company is a get-rich-quick scheme, you will not receive any funding.

Add experience. Having some experienced people on your team will win some investors over. Therefore, adding a highly experienced adviser to your team can be highly beneficial.

Keep in touch. Although an angel might not be immediately interested in your business, you should keep in touch with him or her anyway. That way, you can keep him or her in the loop about big developments such as major sales.

Know your stuff. If you expect to get anywhere with an angel investor, you need to have competitive analysis, market assessments, and solid marketing plans. Even if your company is young, you need to demonstrate expert knowledge of the market that you want to enter.

6. Raise Money from Friends and Relatives

The most common way to finance a startup is by asking your family and friends for money. However, you need to remember that asking your family and friends for money puts your relationships at risk. To avoid this, you should give them formal financial projections, which will reduce the likelihood of unpleasant surprises.

Learning how to get funding for your startup or small business can be hard, especially if you do not have savings, but it’s manageable with dedication, patience, and persistence.

About the author

Brian Meiggs
Brian Meiggs is a personal finance expert, and the founder of My Millennial Guide, a personal finance site helping you put more money in your pocket. He helps millennials follow the smart money in order to increase their earning potential and start building wealth for the the future. He regularly writes about side hustles, investing, and general personal finance topics aimed to help anyone earn more, pay off debt, and reach financial freedom. He has been quoted as a top personal finance blogger in major publications including Yahoo! Finance, NASDAQ, Discover, MSN Money and more.

1 COMMENT

  1. The internet has come to be the perfect internet marketing place for work at home firms for the reason that of the large sites it reaches (globally).
    There are several more methods to finance the business
    Thanks for such a valuable article

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