Learn how to raise money for a business startup with this roundup of some of the most unique and creative approaches to funding.
Every year, thousands of entrepreneurs start new businesses with the hope of working for themselves and becoming extremely successful. It sounds pretty great, right?
But how do people find the money to fund a startup? After all, it costs a lot of money to build a business from the ground up.
Well, unless you have a lot of money saved away to fund your company, you’ll need to get a bit creative. Keep reading to learn how to raise money for a business.
1. Bank Loans
While bank lending standards have gotten much stricter over the last few years, getting a bank loan to fund your business is still one of the best options.
You can apply for a bank loan from several big banks like J.P. Morgan or Bank of America. It’s likely that you’ll leave empty-handed, in which case you can continue to try new creative ways to fund your business.
2. Other Types of Loans
With banks becoming increasingly strict in terms of small business lending, there are other loan options you can consider to get the funding you need.
One option is to get a loan from the U.S. Small Business Administration (SBA). These loans have become a popular choice among small business owners, but there are some limitations. Read more here about the qualifications for an SBA loan.
You can also get funding through title loans, which means you will borrow money against the title of your car.
Crowdfunding on sites like Kickstarter has become a popular option, and for good reason. It gives entrepreneurs the opportunity to set a fundraising goal and have friends, family, and strangers pledge money to your goal.
This is a great short-term option to get the ball rolling for your business, but it’s not something that can fund your company beyond the initial startup.
4. Angel Investor
You can try pitching to an angel investor to invest in your company and to get you started financially. Angel investors can be hard to come by, but can be one of the best ways to fund a company if you succeed in getting one to invest in your business.
When meeting with a potential investor, make sure you are well-prepared and know your stuff. Tell them why your idea is unique and likely to succeed over other businesses.
5. Friends and Family
Asking friends and family for money is a popular choice for new entrepreneurs, but it’s a slippery slope to go down. By asking for money from loved ones, you could hurt them financially and cause strains to your relationship.
Try to only ask friends and family who are looking for an investment opportunity and who would be excited about your business proposal.
Now You Know How to Raise Money for a Business
With these creative ideas for how to raise money for a business, you can get the funding you need for your startup. With hard work, dedication, and a love for what you do, you can run a successful business thanks to these funding ideas.
Looking for more startup and small business advice? Check out the rest of our blog!