It is no secret new entrepreneurs are always struggling to find funds for their business. There is money out there, but the only way to get your hands on it is to know where to look. Of course, you also need to know how to use it wisely, or there’s no point in raising funds for your business idea. Getting a business loan is one of the first is options most new entrepreneurs turn to but what to do when lenders decline your loan request? We have up with 5 alternative sources of funding that are guaranteed to do the trick.
With websites such as Kickstarter and Indiegogo, funding small new businesses has never been easier. Basically, these sites allow you to pool small investments from large number of people and ultimately raise enough money to turn your idea into reality. If you decide to go for this option, make sure you read all the terms and conditions when joining the website. This is an absolute must since there are websites that don’t let you keep the money if you don’t manage to raise the amount you’ve set as your goal when joining the website.
Angel investors are individuals who are ready to help you in your early stages. They give you money to start in exchange for a 20-25% return on their investment. Even some of the big companies of today such as Google and Costco have started out by turning to angel investors. Furthermore, angel investors are usually experienced in running a business, which means they can help grow your business and increase your profit. Just keep in mid that angel investors need you to present a clearly articulated elevator pitch for your business, accompanied by executive summary or pitch deck. Finally you need to be able produce a prototype or working model of the proposed product or service.
One of the most common things new entrepreneurs do when don’t have enough funds for starting a new business, is take on a business partner. There are people out there who can provide you with all the funds you need in exchange for shares of your business. Sometimes, this will be the only way you can get enough funds to open for business. And just like with angel investors, your business partner might be experienced enough to help you run your startup. Don’t forget, when choosing a business partner, the one thing you must have above any skill set or experience is trust. Mutual trust enables you to move at the speed at which your business needs to move. Additionally having a trusting relationship ensures you that when your partner makes a decision, it is in the best interest of your company.
This is a process where a service provider gives you the money on invoices that have been billed out, and you agree to return it once your clients have settled their bills. And even though your invoices are sold at a discount price, you get the money straight away and don’t have to wait to get paid for your products or services. There are plenty of companies out there that offer invoice factoring services and are guaranteed to help you establish steady cash flow.
Loaning from Friends and Family
When entering the business world, you will need all the support you can get. And who can help you more than your family and friends? They are supposed to trust your instincts and support all of your ideas, which means they should be ready to invest in your startup as well. Just bear in mind that you should never forget who helped you out when all you had was an idea and be ready to return the favor when necessary.
Of course, there’s no free money and funding your business requires a lot of work and commitment on your part. Every funding decision you will have to make is nothing but a trade-off between short-term and longer-term costs and payback, and you will have to make sure you are making the right move before you put anything on paper. But with all of these options available, there’s no reason why you shouldn’t start living your dream and raise money for the business you want to start.