Owning and running a small business can be challenging, but it’s worth it in the long run. When your business is still brand new, you will have to secure funding to get it off the ground. Overall, there are plenty of ways to do this, but these five methods are among the best ways to fund your business.
Turn to Friends and Family
If you don’t have your own means for funding your business or are limited in that area, you can turn toward family members and friends for help. The people closest to you are often willing to put their own money toward your business aspirations and invest.
Be open and honest with them and let them know that their money may not be returned. If they truly believe in you and your ultimate long-term success, they’ll be more than willing to extend a helping hand.
Crowdfunding is a good option for securing funding for your business. It invites investors to put down money toward your dream while your business is in its earliest stages and is perhaps the next best option after friends and family for funding.
During this early period in your business’ lifespan, you may not be ready to qualify for a loan or other types of funding.
If you don’t have any friends or family members who are willing to financially help you out, crowdfunding can be a financial lifesaver for a brand new business.
If your company is not totally brand new and it has managed to get to the next level to the point where you can see steady streams of money coming in, you can take the next step toward securing funding. Angel investors are a great option at this point.
This option involves individual investors or a group of them putting together their resources to help startup businesses get that extra bit of funding they need to take things to the next level. These investors typically put up their money in exchange for part ownership in the company or for debt that will be repaid later.
You can find angel investors online and within the community and learn more about what they hope to gain from investing in a business.
Once you have researched a few, you can decide whether to approach them and ask them to work with you. Angel investors can garner your business anywhere from a minimum of $50,000 to $500,000 or even more.
Small Business Loans
Finally, once your business has matured a bit and moved into the later stages, you can compare small business loans to find lthe best loan for your business.
As an already-established business, you will have a better chance of getting a small business loan whether you apply for it through your bank or an individual lender.
At this point, you should also have collateral to put up to secure a loan such as a microloan, which will encourage more lenders to be more willing to extend the funding for your business.
According to the small business lender comparison site, Lantern Credit, “to be eligible for a microloan, you will typically be required to provide the Intermediary with some form of collateral.”
All of these options will help you to fund your business. You can explore which are better for your needs and resources.