How To Get Funding For A Startup Business

How to get funding for a startup business as you consider everything, the question of money is going to be one of the main issues you must address.

You need to look at the big picture in the early days of your new business start-up.

Most businesses fail in the first two years either due to lack of knowledge of running a business or due to lack of money. Let’s talk about how to get funding for a startup business so you can get busy making money.

Credit Cards

Could you finance your business start-up costs from your personal credit cards? This happens more often than you might think.

If you have multiple personal credit cards, choose one with a large credit limit and use it specifically to finance your business. You may want to consider applying for a new credit card that you can use 100%, for your business as well.

One of the big advantages of funding a startup business with credit cards is how quickly you can begin using them to finance things as they come up. Another advantage is you only have to make a minimum payment every month, so you do not have to worry about the principle when you’re first getting started.

One of the disadvantages of using a credit card is the interest rate. If you carry a high balance for too long of a period, this could become negative and affect your profits.

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Home Equity Loan

If you have equity in your home, you may want to take out a home equity loan and finance your small business with that money.

This can be an excellent option because interest rates on home equity loans are lower than commercial interest rates would be on business loans.

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Consider establishing a home equity line of credit as well. Knowing that you have the ability to access funds quickly if you need them can be helpful not only in your initial startup phase but if you need cash flow at certain times in the future.

Crowd Funding

Raising small amounts of startup funds from a large number of people is one of the benefits of using crowdfunding to get your business off the ground.

Kick Starter is one of the most well-known sources of crowdfunding. Fundable is another excellent source of money for crowdfunding.

Many startup businesses are not sure where to go to attract investors. If you’re willing to trade out in equity for start-up, funds crowdsourcing gives you access to thousands of potential investors for your idea. Donation-based crowdfunding and reward-based crowdfunding are other options if equity is not something you’re willing to give up.

Online Lenders

Thanks to the Internet you can find services that lend money to businesses in need. This has become a popular way to fund a startup as opposed to going with a traditional business loan.

Another of the primary advantages of using an online lender how quickly the process can be completed. One of the chief complaints that new businesses have when taking out a traditional business loan is how long the process can take.

U.S. Treasury Secretary Larry Summers has said in the past that online lenders will reach more than 70% of all small businesses in the United States. This should give you confidence in knowing that these companies are more aggressive in approving loans and doing it quickly.

Pre-Sold Orders

There are times when a new business startup already has orders for their products. They just need money to get the business off the ground and fill those orders. Some companies use factoring and invoice advancing as a basis to make a startup loan.

You used the money to get your products ready and sold to your customer. You then pay back the money plus interest. This is ideal for businesses who deal with suppliers and have a gap in when the work is completed, and the invoices are collected on.

Family and Friends

crowdfunding startup businessMany businesses have been started with loans from family members or friends who are willing to help get your business off the ground.

This can be a quick source of funds and often an excellent alternative to other forms of financing a startup business.

As with any loan, your family and friends need to be aware of the risks as well as the benefits.

You should put together a comprehensive business plan so your family and friends are dealt with in a professional way just like a lender would be.

Start A Side Business

The Internet offers some excellent advantages for people who want to start a side business to generate money to finance their primary new business startup. The side business could continue to be a source of revenue in the future as long as it doesn’t take up a lot of your time.

Of course, an Internet business is always open for business 24 hours a day so it can continue to run in more of a hands-off manner once you have it set up and operating efficiently. One of the great things about using your money from a side business if you don’t have to worry about dealing with investors and paying them back from future profits.

Current Assets

Do you have something of value you could sell to raise money? For example, you might have a car that you don’t use that often that could be sold and used as a source of funds.

Maybe it’s a good time to clean up around the house and sell some items on eBay or Craigslist. Doing this allows you to kill two birds with one stone.

As you can see, there’s no set way to go about raising funds for your startup business. You can be as creative as you need to be!

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PS: No credit card needed!

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8 thoughts on “How To Get Funding For A Startup Business”

  1. This article is  a very resourceful one, I could remember a while ago when I wanted to go into the marketing business and I needed to purchase some good to my online shop, I was so stranded that I had to let go of the offer. This funding options are really nice and should help a lot of entrepreneurs.

    Reply
    • I myself had this problem back then, that is the reason I decided to write this article to let my audience what should be their approach when looking to fund their business.

      Reply
  2. Hi there , I really enjoyed reading this article , I find it quite interesting and informative, for a while now I have been searching for how to get a funding for a startup business, I’m really glad I came across this article, and I believe that most businesses fall in one or two years of establishment due to the lack of knowledge of running a business. Thank you for sharing this innovative information. 

    Reply
    • Hi Jack, happy that you got some value here with this article. Moving forward if you need additional assistance, please do not hesitate to reach out to me. I am working with a few members here at wealthy affiliate, and they are starting to see results. Talk to you soon.

      Reply
  3. Wow, this is very good for me to get myself some money because I am already looking to start a small business and although the money I would need to start up wouldn’t be that much, it is still something that I would be looking to give a go. Like the fact that you are able to share the information on how to get funding Soon I can startup my company.

    Reply
    • Starting a side business is the best out of my list. Most people pick that one and I am able to help them one on one because that is how I get started and now working full-time from that same side hustle. If you are interested you can reach out to me and I would work with you to help you accomplish your goals and beyond.

      Reply
  4. Lots of people are faced with many issue when they want to go into any business and sometimes they lack the idea on how to go about it and that is really sad. Seeing these various options you have given us here, I’m sure there would be more than one that can work for us and it’s really appreciated. Cheers

    Reply
    • Yes, Lawson, that is the problem that I have seen for quite some time, I guess that is why Shark Tank has become so famous today, helping growing business owners get the opportunity to grow their business or new products to the market. Some like Wealthy Affiliate gives you a free opportunity to get started with their platform.

      Reply

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