Have you ever thought about becoming an entrepreneur? You’re not working 9-to-5 anymore, and you earn money by doing what you love. However, before you can do all the things an entrepreneur does, you’ve to establish it first… and starting your own business requires funding. Many entrepreneurs establish their startups using money from their own pockets. After all, self-financing gives you total control over your startup’s direction and equity. However, you’ll need a significant initial investment if you’re self-financing your business!
But did you know there are many other sources of funding other than your own? In this piece, you’ll discover how you can finance your startup without the help of your savings. Continue reading to learn more!
Small Business Loans
For many entrepreneurs seeking external financing, small business loans are a great choice. After all, there are many institutions offering loan programmes tailored to startups— governments, banks, and even private lenders.
You can use small business loans to purchase machinery and equipment, inventory, or simply cover operational expenses.
However, before you apply for a small business loan, you should first conduct thorough research. This way, you can compare different loan terms, interest rates, and eligibility criteria to find the most suitable loan for your startup. After all, you don’t want to establish your business and end up with a huge pile of debt!
Equipment Financing
If you’re going to establish logistics, handyman, or any business that involves transportation, you’ll need a specialised vehicle for your operations. And we can’t deny that purchasing vehicles will cost a lot. And, if you’re going to self-finance, doing so may leave you with no money in your account!
So how can you buy the vehicles? Simple— use equipment financing.
It allows you to acquire the necessary vehicles without a substantial upfront cost. The financing institution provides you with the funds, and the purchased vehicles serve as the collateral. You’ll also get competitive interest rates and flexible repayment terms!
If you aren’t sure where to look, you can simply look up “new business van finance” and compare terms offered in your area!
Crowdfunding
We’re pretty sure you’ve heard of the websites Kickstarter and Indiegogo; but did you know you can use these websites to fund your startup?
When you use crowdfunding websites, you create a compelling campaign, highlighting the unique aspects of your products and services. You should also detail how it can potentially impact your customers’ lives. This grabs the attention of any interested individuals and backs you up with equity or capital.
So if you’re too nervous to apply for a loan, why not turn to the crowd for your funding? It’s a great way to gain capital and gauge the interest of your target market!
Angel investors and venture capital
If your startup is innovative and has a high-growth potential, you can seek funding from angel investors and venture capital. After all, it’s what these investors exactly looking for!
But how can you attract their attention? Think of Shark Tank— you create a compelling pitch, outlining your business plan as well as market potential. Simple, right? However, if you’re going to seek the help of angel investors, be ready for negotiations! After all, investors have different goals, and so does your business!
Starting your business doesn’t always mean you’ll have to fund it by yourself. There are plenty of ways you can get funding, and all you need to do is think of ways your startup can change your customers’ and investors’ lives and portfolios!
