Funding options when starting a company
You’ve decided to start a new business – great! You’ve picked out your location, you know your target market, and you have a marketing plan in mind; there’s just one problem: you don’t have the start-up funds to do everything you need. Now you could bootstrap your start-up and just try to “make it work” but the odds that you succeed are going to be a lot slimmer than if you had the appropriate funding to really get your business off the ground right from the beginning. Don’t worry; there are a lot of options out there when trying to raise the capital you need. Here are just a few:
Small Business Loans
These are the types of loans you are most familiar with, the type you get from a lending institution like a bank. While banks do have enough capital to provide you with all the money you could need, the main problem is that they have very strict guidelines surrounding who is qualified for a small business loan (and with today’s economy, getting a small business loan from a bank without amazing credit history and a proven track-record is hard to do).
There are other loan options available. Using sites like https://www.wongaforbusiness.com you can apply for an online loan. Less stringent and a lot quicker than banks, these types of online services offer short-term and long-term in as little as 1 business day.
Government Grants
Contrary to popular belief, the government doesn’t have money set aside for businesses to get started. There are certain government grants available for small businesses, but these aren’t intended for start-ups, or for paying off debt. They are usually intended to boost the local economy or promote the government’s agenda (for example, with the push for “going green” right now, a small business may qualify to revamp their business to a more energy-efficient cooling system via a government grant).
If you do find a government grant that can suit your needs remember that the competition and screening methods will make it hard for you to be selected—make sure you have a solid business plan before applying and show exactly why you are the most deserving candidate.
Crowdfunding
A relatively new way of getting the cash needed for a start-up, crowd funding goes to the people. Using sites like indiegogo.com and kickstarter.com you will be allowed to create a campaign to ask the general public to fund your business. In exchange for their donations you can give them “prizes” (for example, you will give them one of your products for a donation of $10).
While these can provide a lot of money very quickly (celebrity Zach Braff recently received over $1.5 million in 48 hours for the funding of his movie), you need to make sure you get the word out about your campaign and that, in your listing, you show how your business will benefit society.
Photo credit: Betsy Weber
Category: Business and Politics
