Starting a business can be a costly venture and like most entrepreneurs, you probably don’t have the cash upfront to get your idea off the ground. But that shouldn’t be an obstacle.
There are plenty of ways you can seek finance to get your business up and running beyond the traditional bank loan which saw most entrepreneurs jumping through hoops in years gone by. Here’s a few ideas.
With Kickstarter being the most popular platform so far, crowdfunding sites have become accepted as a means of funding new business ideas. They work by pooling a number of small investments from individuals rather than the traditional method of finding some who’s prepared to take one big leap of faith and stump up the whole amount.
And it gets better. Pitching your idea to potential investors through sites like Kickstarter is a great way to test the validity of your concept or product before you start work developing and taking the product or service to market.
Angel investors aim to invest in early stage startup companies that they believe to be full of potential. But ther’ss a catch here.They’ll typically expect 20-25 per cent share in the business you’re starting in exchange for their risk. So get yourself pitch ready!
The days where banks were the only viable source of business capital are well and truly over. Not to mention the hoops you’d have to jump through to obtain it. Now, you’ll find a range of online investors who’ll assess your credentials online and sometimes issue the funds within a matter of days.
Use a credit card
The use of a credit card to fund a business is probably the most risky method for obtaining funds but done responsibly, you could make it work. Be careful not to miss payments and get stung with exorbitant rates and fees. In addition to this, makesure you can repay more than the minimum repayments so you can be sure that it’s a debt you really will clear.
No one likes to ask for money, but if the people around you know you’ll be giving things a good crack (and for the right reasons), they might be willing to part with some cash to send you on your way and fulfil your ambitions.
If you’re lucky enough to find the funds in this way,you might even avoid the hefty interest rates charged by banks and won’t need to offer upa 25 per cent share in your business.
A bank loan
Traditional as it may be, banks are streamlining processes in response to the many alternative lenders out there attracting potential customers. But you’ll still need a solid business plan and a worthy attitude to get on the bank’s right side. Remember, small business loans are still relatively small fry for the big banking giants.