Starting your own business, even if it’s small, requires money. Startups face more and more challenges because they have no record of success. Knowing where to look for money will give life to your new business.
Crowdfunding is all about putting your idea for your new startup on the web and asking others to donate money, so you can actually start a business. It is an increasingly popular way to get funded. And, there are more and more websites where you can share your idea for funds.
Incubators, also known as startup accelerators, are a great way to fund your business because most of them provide money, mentoring, and even education. There are many companies that nurture and support new businesses around the world.
According to Harvard Business Review, the number of supporting programs is growing, and there are over 150 of them in the US already. However, startup accelerators are mostly about unique ideas and phenomena. It’s much harder to find opportunities for a business in more traditional fields. Additionally, incubators often offer money in exchange for equity, and you may not want to share ownership in your business.
Compete for Funds
Every year the number of contests that offer money to startups as a prize is growing. The best of these also offer additional benefits such as training or access to expertise—that can mean a great deal to a new business. Some of the biggest contests offer over $100,000 in funding and mentoring!
If you’re thinking about institutions, think about SBA, or the Small Business Administration. It’s the leading and one of the oldest companies that finances new American businesses. Hundreds of startups have already succeeded with the help of SBA. You can apply for an installment loan or get advice from a professional.
With regard to loans, there are secured and unsecured installment loans, and you can easily apply for both of them. The result, however, depends on the lender. Still, many recommend secured credit but with more flexible terms and lower rates. If your credit score is higher than 700, you can get an installment loan in your own name. After your business gains reputation and revenue, you can simply change the loan to the business.
There are companies that are willing to finance new businesses as a way to secure their supply chains and increase the reach of their products. Some of the world’s biggest companies, like PayPal and Amazon are lending to startups, and this trend is rapidly growing.
If the business you want to start is a franchise, you can get financing from the franchisor you are going to do business with. Franchises, in general, are easier to finance than other startups because there are more lenders willing to loan you money.
Angel Investors are individuals with private money who are passionate about funding businesses that can solve big problems in the world, while also being profitable. An Angel will fund a startup in exchange for equity in the business.
Angel Investors are great to have relationships with because they can offer business connections and experience. This is especially true if they specialize in the same industry you’re in. Additionally, many of them give you money without making you pay back any interest, as you would with a bank loan. However, you do need to make sure you pick the right Angel. You will have to give up some control over your business and allow an Angel to have a decision-making power, so choose wisely.
One of the biggest obstacles for anyone who is looking to bootstrap a business is funding. But, don’t give up in your search. If you have an idea, exhaust yourself looking for funds. The payoff will make your efforts worth it.