Are you one of the over half a million people looking to start a business this month?
You’ve made a smart decision. Entrepreneurship enables you to become your own boss, live the American dream and, importantly, make a difference in your community.
However, entrepreneurship isn’t without its fair share of challenges. Raising startup capital, for instance, has long been a major roadblock for many entrepreneurs.
If you’re in this situation, don’t lose hope. There are a couple of ideal small business financing options you can explore.
Continue reading to learn more about these options.
In 2017, lending by big banks to small businesses hit a record high, and as the economy continues to recover from the Financial Crisis of 2008, things will only get better.
So if you’ve been shying away from applying for business loans, now is the best time to approach your bank. As long as you have a solid business idea and detailed business plan, you’ve got a good chance of securing a loan.
Plus, lots of private lenders offering business loans are emerging. Give them a try in case banks turn your down.
As a budding entrepreneur, you probably watch the Shark Tank, a show where entrepreneurs pitch their ideas to a group of investors. To secure funding, they must offer the sharks some equity.
The gist of this is you don’t have to go on the show to get equity funding. Anyone can be an equity investor, really. If you have a rich friend, for example, you can ask them to invest in your small business in exchange for an equity stake.
While equity funds are an ideal source of business capital, be careful not to give away too much equity.
Crowdfunding is fast becoming an effective way to raise business capital. By 2025, $300 billion will be raised through crowdfunding platforms, up from 73 billion in 2016.
As such, running a crowdfunding campaign on platforms such as Kickstarter and Indiegogo can be all you need to raise money for your small business idea.
That said, bear in mind, not all crowdfunding campaigns are successful. If you don’t tell the story behind your business idea in an evocative way and share your campaign widely on social media, you could fail to reach your funding goal.
Just because you don’t have cash in your savings account doesn’t necessarily mean you can’t raise startup capital on your own.
Do you own a house, a car, or any other valuable asset? You can use such existing resources to raise the money you need. If you have positive equity in your home, for instance, you can secure home equity credit and channel the funds to your business.
If you’ve two cars, sell one. That’s what bootstrapping is all about; using existing resources.
Without enough capital, any business will grind to a halt. This is why it’s crucial to secure adequate funding before launching your business. Evaluate these small business financing options and find one or two that suit your needs.
Check out the rest of our blog for more business tips.
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