How to Fund for your Business to Actualize your Entrepreneurial Dreams
The major challenge for aspiring entrepreneurs and the small business owners is to find enough capital to launch or grow their business. If you are on to this page now, your cause also may likely be the same. If so, believe me, that there had never been easier and broader funding choices than now to aid the prospective entrepreneurs. In this article, we will further explore easily considerable options for you to fund your business and actualize your entrepreneurial dreams. Here’s 7 ways how to get financing for your business:
1. Family and friends
May your business idea demand only minimal capital to start with or sometimes your small business requires some add-on capital to buy needed equipment. In such cases, the first option is to explore interested friends and family who will be willing to invest in your business.
In such cases, they may instead invest in you, but not in the business. Still, try to reassure them and also to keep the word regarding returning the dividends once and when you acquire it. However, limit this financial exploration to your immediate circle and also don’t give them any troubles by pressure to get it done somehow.
If your business is at the conceptual or experimental stage, always try to make use of your private financial resources. Take out money from your long-term fixed deposits or savings account. You may also carefully use the personal credit cards to find funds. However, it is essential to deploy this fund carefully just in case things don’t take off, because there may be nothing left.
For those who are having a plan of business in mind for a period of time, there may inevitably be some such resources which they have nurtured over time. This fund can be wisely combined with the other sources of funding to meet the baseline capital requirement to move forward.
You may have come across this term if you are seriously trying to raise funds for your business. Crowdfunding is now a legally valid funding option under the JOBS Act, which lets the small investors invest their funds on any company they trust.
This is the ideal mode of funding during the early stages of business, especially for those entrepreneurs who don’t qualify for bank loans for their startups. There are only crowdfunding platforms now, which you can also access and list out your business or business idea to seek interest.
4. Angel Investors
When your business gets on to the second phase of growth when you start to see the revenue, it may be ideal to explore the sophisticated option of ‘angel investors’ for more funding as working capital or expansion. An angel investor or group of investors may pool their resources and researches into your business and provide the money to establish your brighter ideas in exchange of equity or convertible debt.
Angel investors an angle groups as listed on can be now found globally in a variety of communities. In comes groups, they are working with specific objectives and purpose. You have to run due diligence first to explore these groups and if their goals match to your requirements. If so, you can schedule a personal meeting to gather data. Through angel investors, you may raise about $50,000 to $500,000 or even more based on the proposal. At the second phase of the business, angel investors can be serious onlookers into the company with expectations for reliable results.
5. Bank loans
At an advanced stage o business, now-incorporated companies may need a bank loan to meet the higher level needs. It may be planning to fund for capital or to attend long-term growth plans; to secure a loan financial institutions may look for many years of financial statements about the business and also the stability and creditworthiness of the entrepreneur.
Such loans may also require some guarantee or collateral to pledge again the funds allotted. To facilitate a financial investment, you want to engage with the financial institutes as early as possible. For startups and business at the initial stages of their establishment, it is ideal to open a merchant account with banks or avail the credit card services, etc. to maintain a stable relationship. With such an approach, over time, the banks and financial institutions will be familiar with you which will make it easier for you to secure a loan as and when needed later.
6. Venture capital
For the fast-growing businesses, once the company may reach a stage where venture capitals may enable hyper growth. Say, for example, the company may need millions of dollars to explore new markets or to expand the sales region by adding more products. Venture capitals may be able to deploy big money by running their due diligence to ascertain the creditworthiness of your enterprise. The ultimate goal is to split and sell your business to garner a better financial return for limited investment partners.
7. Government programs to promote businesses
All governments across the globe are keen about fostering domestic firms as they contribute mainly towards the overall GDP of the nations. Sometimes, governments may also offer special packages too to encourage any particular industry or for a cause. To boost up innovative product and services startups, government organizations used to launch programs like innovation incubation, etc. at their cost.
In the United state, there are reserved small business lending funds, which can be applied by start-up forms and local businesses. If you find yourself compliant with the application criteria, then Government funding without any significant interest will be an ideal option to consider.
Having good credit and a strong financial background will help you to secure business financing. However, if you’re going into business with debt on your hands, then visit here for more information to help get you back on track. If you plan to explore the above modes for financing your business, then do intensive research and develop a detailed business plan which demonstrates the value of investing on behalf of you and your business. Whichever stage your business is in, you have to try and increase the odds of securing the needed capital by impressing the funding sources with your financial responsibility.
If you need financing to expand or grow your business, Harbortouch offers a cash advance services for up to $1,000,000 (One Million Dollars) in a cash advance program.