No matter how long you have been in business, or what line of business you are into, an infusion of funds has always been one of the challenging obstacles for any small business owner.
However, lack of funding should not mean that you have to put your entrepreneurial dreams on hold. You are not the only entrepreneur with an awesome idea and nothing to start.
Here is a compiled list of best available options that will help you raise money for your small business.
1. Get a Bank LoanBanks are still considered as one of the best places to get loans for small businesses. It is one of the less expensive ways to secure funding with the relatively low-interest rate. A business loan would provide you with a huge sum up front and relatively low-interest rate which can be ideal for expanding your small business.
You need to take out your phone books and target at least 10 banks. No all business loans require a mountain of paperwork, in fact, there are a number of options these days to receive financial support and raise money for your small business.
2. Try Crowdfunding PlatformsCrowdfunding is mean to increase the finances for your startup and involves raising funds from people. In the recent years, this market has matured as lauded heroes of funding market.
Although, by its nature, crowdfunding is a risky investment but has the tendency to hit the headlines by smashing records for the amount increased in short span of time. Kickstarter is one of the most noteworthy crowdfunding website.
3. Take a Dig at Your Personal SavingsIf you intend to start a business with your name only, personal savings can be a good option to go for. The advantage here is you wouldn’t have any obligation to anyone else and won’t incur any interest cost when using your own money to finance your business.
While many people would advise you to use your personal savings to start your business, very few would advise on what percentage of your personal savings should be used. So, it’s important to find the right way to use your personal funds for business. Make sure to check tax implications of using your personal savings for business purposes.
4. Take Help of Friends and FamilyOne of the common ways to fund a small business is to hit upon your friends and family. It is an alternative to the traditional form of financing. All you need is make a project explaining them about your business and the capital you have invested.
And, if they find the idea innovative and attractive, they will want to invest and help you raise money for your small business.
While borrowing from friends and relatives has a downside of potentially risking personal relationships, if your business fails, it has advantages as well such as no- or low- interest payments and no bank hassles.
5. Make Use of Credit CardsUsing a business credit card is one of the most readily available ways to fund a small business with minimum payment being very low. A credit card can always be used to pay startup costs, assuming you are qualified for it.
If used responsibly, credit cards can help you get out of the occasional jam and cover the amount payable period to shore up the cash flow. The credit card allows you to carry a large balance but make sure to pay the credit card in full at the end of the cycle.
6. Attract an Angel InvestorIf you are looking for financial help for your startup, look for an angel investor. Angel investors can be professionals such as lawyers, business associates or seasoned entrepreneurs who are interested in helping enthusiasts to start with their innovative idea.
Angel investors form a viable option for startups with solid business models having prospects for rapid growth, with the principle advantage being that you have an easy and quick decision-making circumstance for the smaller amount of sum.
They have helped to start up various prominent companies such as Google and Yahoo. But make a note when pitching an angel investor, be succinct and always have an exit strategy.
Wrapping it upIrrespective of what path you choose, the probability is that you may try each of these at some point of your business life to raise money for your small business. What matters the most is that you have a business that has your full attention.
So, find a feasible solution that lets you maintain operations and focus on productivity.