When it comes to beginning your business, the first obstacle to succeeding is usually your startup capital. In spite of the joy that follows a bright business idea, the chances of success can be slim where there is no capital available to its founder. Experts
have agreed that many businesses usually wind up within the first year of starting for diverse reasons; pivotal amongst these reasons is raising startup capital. Where commercial transactions have begun, business owners would still require sufficient finance
to keep the idea running.
Most founders know this and always seek ways to fund their business idea. We have put together our best tips on how you can get funding for your business.
1. Dig into Your Savings
Usually, the first place that a new business owner would look to for funds is savings. Intending to start a business without any savings does not show seriousness. If you have no money saved or if your savings are not enough however, you can ask family and
friends to lend you the sum. Getting capital this way is called bootstrapping. Friends and family are easy to approach and can offer you interest-free loans or even provide full funding if they like the business idea. Bootstrapping becomes insufficient when
the business is a large scale enterprise.
2. Turn to Bank Loans
If you have a great business plan, the bank may be an
excellent place to get funding. The bank may offeryou startup funding or working capital. If your bank gives you a working capital loan, the money will cover your startup capital and revenue generation for smooth operations. To get funding from the bank
like lanebank.com, you will have to provide collateral and the documents accompanying such collateral. Banks offer you the chance to get large sums, and this can quickly boost the income generation of your business.3.
Crowdfunding allows you to get small sums of money from a group of people who support your business idea. Crowdfunding came to limelight following
the advent of technology and various social platforms. Now, you can share your idea with people on crowdfunding sites along with your business plan and ask them to make contributions to it. Interested people will donate various sums to help you birth your
idea. When you are raising capital by crowdfunding, you must show that your business idea has the potential for growth.
Crowdfunding accelerates the capital sourcing process because it creates public awareness for your business. People who are participating will show their interest publicly, and there is a high chance of attracting investors through the platform.
4. Use Angel Investors
Angel investment is a relatively novel idea as most people do not know what the concept is. Angel investors have vast sums of money and are waiting to invest
these sums on business ideas that they find attractive. Sometimes, these investors form groups or even organizations that receive business proposals and choose which businesses they would like to fund.
Angel investors provide mentorship for startup businesses that they are funding and they are also open to the risks associated with each business idea.
5. Venture Capitalists Might be Your Answer
Venture capitalists are investors willing to risk vast sums of money on new business ideas. These investors seek businesses which have high growth potential and then monitor the progress of such businesses. Venture capitalists are professionals who ensure
that there is sustainability within the newly formed business. Like angel investors, they offer mentorship to the startup founders but then pull out of the arrangement when they have realized the invested funds and capital. A venture capital relationship would
also naturally end if there has been an acquisition of the company.
6. Win Some Contracts
Entering contests is an excellent way of getting funds for your startup. Investors often require you to pitch your business idea in a contest or competition with other investors. When they go through your business plan, they decide if it is viable and if
they should offer you the prize money. Contests get you exposure for your business aside the capital.
7. Microfinance Providers Can Help
If your startup is a small scale enterprise, Microfinance Providers or Non-Banking Financial Corporations (NBCFs) might be your best bet. These
institutions can provide you a loan even if your credit rating is poor. This can quickly ease the procedure at the traditional bank. You can bypass the banks and get a faster, more accessible loan from a Microfinance Provider or NBFCs.
8. Business Incubators and Accelerators
Business incubators and accelerators offer programs that give funds to startups. While a business incubator would nurture your startup, an accelerator would hasten your progress. These investors offer you mentorship alongside capital.
9. Ask the Government
Government offers programs that provide funding for new businesses. You can enroll for one of these and get the needed capital. These programs are called a grant and require you to submit your business plan. You can get massive sums from grants, but you
have to wait for extended periods to eventually access the funds.
10. Creative Ways to Get Funding
You can get funding by these additional creative methods.
Credit cards can help you access instant funding. Just make sure that you pay the minimum amount required on time. This way, your business would not end up in debt barely after starting.
Product Pre-Sale allows you to offer your product to the public before officially launching them. The money you raise from the sale can become the capital that you need. Product Pre-Sale has enormous advantages for your business because you can gauge the
market before releasing your products. It also allows you to build confidence in your brand. Apple, Samsung, and other big league companies use the product pre-sale method to get awareness from committed customers for their products.
When you sell some of your highly priced possessions, you can quickly get the funding you need.
This guide to getting your startup capital is comprehensive. Bootstrapping can quickly help you get started but to keep your business growing; you have to change your funding method continually. Doing this allows you some flexibility and independence. Much
more important, it makes your business climb the ladder of success as it would never lack funds.