Every startup business needs a certain amount of money to set up and get going. Product development, marketing, software, staff, and inventory, all require capital to get started. Many startups and businesses will look to a bank loan as a way to finance the project. And with a good business plan in place, that can be a really good way of getting some initial credit to get everything planned that you want to.
However, the interest rates or the money that you want to borrow, might not be allowed or the sums simply might not add up. You don’t want to be paying back a fortune. So what other avenues do you have to go down?
There are plenty of other financing avenues to go down. However, they are not all going to be easy ones. Some of the most successful entrepreneurs are the ones that focus and think creatively, especially when it comes to financing their projects. So here are some other ways to finance your startup that you might not have thought of before.
It can be quite surprising just how many entrepreneurs that don’t think to save any money before they start their business, and who never even consider financing the project themselves (more information here). But if you can, then it can help you get started quite quickly. Plus, when you are looking for investors, they want to see that you are all-in. You need to have a horse in the race, so to speak, to be taken seriously.
This is one of the many blessings of social media and the internet. These days, several startups look to crowdfunding websites and scouring the internet for like-minded people. In the hope that these people will support your efforts, with the promise of something in return, once the business gets up and running. It can be a slow and long process, depending on your business idea and the people you know. But it can certainly be worth a try.
If cash flow is a problem, then something that startups and even established business use is a factoring company. It is similar to a loan, based on your accounts receivable. It helps to free up immediate cash flow. And let’s face it, when you’re starting, you do need some cash. You could visit Business Factors to read more about factoring if you’re unsure. Factoring could also be beneficial once your business is established and you have a bit of a cash flow problem.
Friends and Family
If you have family or friends that believe in you and believe in your business, then why not ask them for some help? They could just be small ‘bridge-loans’ until things get going, but it helps at the start of it all. You never know, it could lead to them having an equity stake in your business later on. Just be sure to set clear contractor guidelines with them. When it is family and friends, you don’t just want to presume anything, and then they demand their money back.
Question: Do you know any other creative ways to finance your startup? You can leave a comment by clicking here.