Raising startup finance is an essential aspect of the business you can not joke with. However, money is not something that’s easy to get nowadays. So, how do people get capital to finance a business idea?
Any business needs cash-flow and financing is normal, it’s probably very unusual to find a business that has not used some kind of funding or borrowing at some point in their existence.
Sometimes, for a variety of reasons, including being a startup or having a less than perfect credit rating a business can struggle to get a regular bank loan or overdraft. Even company credit cards can sometimes seem a bit difficult to get.
In these cases it might be wise to look at other methods of financing your cash-flow needs, here are five great alternative ways to get that funding secured.
#1]. Crowdfunding
If you have an interesting or useful invention, idea or company then it may just be the kind of thing that ordinary folks on the street would be curious enough about or believe in enough to donate some of what the company needs to get going.
This means the business has to be interesting or solve a problem. It has to fulfill a social need as it’s a donation rather than an investment that the individual is giving so bear this in mind when pitching your idea.
More info can be found on the process here on the Kickstarter website, one of the biggest crowdfunding platforms and facilitators online today.
#2]. Merchant Advances
If you have a facility for taking card payments and do a reasonable amount of business this way then you can receive a loan from many of the card processing providers which will be paid back via the card payments coming in.
These merchant advances are a reasonably quick and easy method of getting finance. The card processing firm has a clear record of your income coming in through cards and can make a very swift decision on the lending.
However, the downside could be the rates of interest you are paying back and how much of your income is deducted each payment. Be sure to check these amounts in the terms and conditions of your loan.
#3]. Finance Everything Bit By Bit
Have you thought about looking at everything you need separately and getting finance or leasing solutions on each item? This could be the best option if you are struggling to set up or expand your business and cannot get a single loan or finance product to suit.
Many businesses go about it this way and you could get vehicle finance from Driven Car Loans Edmonton. You can then go to an IT specialist to get finance on your office equipment. Luckily, there are even many outfits out there that lease or hire office furniture.
It’s a bit more leg work this way but can, in the end, get you a better deal by shopping around for each aspect separately.
#4]. Grants, Government & Non-Profit Assistance
It’s often forgotten that business grants are still available from the local and national government and although not as readily available as years ago it’s still an avenue worth exploring. If an area is undergoing regeneration, or you are creating jobs or working in an area that shows technological innovation then there are still grants available.
#5]. Angel Investors
It’s a good idea sometimes to look for the personal touch if you know you have a good business but it doesn’t quite tick all the boxes needed to secure regular funding then an Angel Investor may be able to see the potential in your idea. If you find someone who is successful in business in your area then you can get funding and a good mentor which is invaluable.
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