Sometimes more difficult than coming up with a business plan or idea for your small business, is obtaining the funding necessary to get your business up and running. Whether your filing for a California corporation online or trying to start an LLC in Michigan getting your business off the ground is the first hurdle, but even after the initial investment the capital required to keep your business running usually requires some time. Thankfully, today’s technology and resources allows for some creative ways to raise capital for your small business that does not require a traditional loan from a bank.
Receive Funding From Angel Investors
In the business world, networking is everything. Finding and maintaining relationships is key in any business venture, and raising funding is no different. Angel investors are those who have already reached great levels of success in their businesses and are seeking ways to give back to their communities. These investors are so ideal because they are not loaning you money with an interest rate attached. However, angel investors receive returns in other forms such as stock options.
Credit Cards
Credit cards tend to get a bad wrap, but when used wisely they can be a great resource for funding a small business. A zero percent transfer is a great way to transfer the balance on a card without being pegged with an interest rate. This allows for a good amount of time to pay back a balance.
Crowdfunding
Nowadays the Internet is an invaluable resource for just about anything. This does not stop with funding money for your small business. There are multiple websites solely devoted to doing so such as Kickstarter.com. On this website you can promote and market your business and reach a huge market of people looking to invest in the newest ideas. Investors can receive incentives for investing or earn interest in their investments.
Look for a bank loan
Receiving a traditional loan is not always a bad idea. Both large and local banks frequently offer special loans for small business. Especially if you have a good credit score and your financials are in order, shopping around for a good traditional loan may be in your best interest.
Enlist the help of family and friends
Do not rule out those who are closest to you. Sometimes friends and families can be your biggest fans, which may be just what you need to get your small business off the ground. Although your relationship is personal, it is important to still “make the sell”. Friends and families still want to know that their money is going to a valuable endeavor. Services such as Business Loans Direct offer loans without good credit which is an alternative.
Micro loans
If it has proved difficult to receive a business loan in traditional route, there is still a resource available to consider. The Small Business Administration offers micro loans to individuals who failed to receive a bank loan. A borrower must meet multiple requirements and the interest rate can be rather high but it is still a great option if funding can not be found elsewhere.
Resources in today’s world are extremely fruitful and choosing not to use them is ignoring tools that can make you successful in many aspects of life. The Internet in itself has opened a world of possibilities that would allow for anyone to start a business if they wanted to. If none of the points outlined appeal to you, a little research and creativity will reveal new opportunities for financing whatever goals you may have.
I’ve been hearing about Kickstarter a lot lately! It seems to be very helpful if you have a good idea in certain markets.
Crowdfunding does seem to be an effective method, although–as with most things–we tend only to hear about the success stories. I wonder what Kickstarter’s statistics are.
Good question, Mike. Kickstarter publishes their stats here: http://www.kickstarter.com/help/stats
Very nice discussion here. I was not aware of crowd funding and kickstarter and these seem like some good possibilities. The trick here is to get financing without giving up too much control or too big a payout for such working capital. Remember, the biggest reason for business failures is undercapitalization.