Obtaining sufficient funds to finance your business isn’t always easy. However, it’s a necessary process that requires your utmost focus. Essentially, there are two unique funding methods you can utilize for your business: debt and equity. Most entrepreneurs prefer pursuing the debt option that involves receiving a certain sum of money from a bank or lending institution and later paying back with some interest. The particular terms of repayment is usually discussed and agreed upon by the two parties.
The equity option, on the other hand, involves seeking investors to inject funds into your business and bring it to life. However, there’s a catch: getting equity for your business always demands relinquishing a certain ownership stake to the investors. Altrua Financial offers wide-ranging loan options to help finance your startup.
Here are 5 cheap tips on how to fund a small business:
- It helps to bootstrap
If you’ve been dreaming of starting a small business for years, start by self-funding your project. Bootstrapping refers to digging deep into your own pockets and setting some money aside to start your business. There are several methods you can use when bootstrapping your business. Opening a savings account where you consistently deposit a certain amount every month is a great idea. Use these savings to kick-start your venture as you leverage your position to secure more funding in future.
- Seek a small business loan
This is yet another exquisite source of business funding. If you’ve managed to maintain an excellent credit score, you’ll happily secure a sufficient loan to fund your small business. In the past, lending institutions had stringent laws that prevented most entrepreneurs from achieving their dreams of operating a business. Today, you can secure funding by simply creating a sound business plan and coming up with profitable projections.
- Get some angel investors onboard
Let’s face it: some individuals are filthy rich. Some of these affluent folks are usually willing to invest their money in promising startups. Surprisingly, angel investors aren’t that hard to locate and convince – simply conduct some online research to trace some of the local angels within your area. By visualizing and writing down your great business idea, you’ll quickly find people who believe in that idea. Therefore, share your business aspirations with local angel investors for a chance to thrive.
- Crowdfund your business
Thanks to technology, you can easily share your brilliant project or business ideas via a variety of online platforms and request funding from hundreds of investors from around the globe. Investments can either be made through equity, debt or even rewards-based. Before pursuing this funding option, find out the various crowdfunding platforms that exist and select the best for your particular business.
- Get help from family and friends
Those closest to you will offer valuable help to facilitate your business startup. Pooling money from loved ones may sound like a daunting endeavor, but it’s a crucial first step when financing your business. However, prepared a well-structured business plan beforehand – this will make it easier to explain what the business will entail and how you expect to make money from it. It also helps to clarify whether you’re requesting for a gift or a loan.
These few tips will help you fund a small business with little fuss.