Getting financing is the most stressful part for most new businesses. Unless you have saved up enough money, you will have to find someone to give you the funds to start your business. This is not usually easy, especially because many people and organizations are not willing to take the risk with new businesses. However, even with these challenges, you can find the financing you need if you do your research well. This article highlights five key ways you can get financing for your start-up.
There are a variety of startup loans available for new businesses. A good place to start looking is SBA loans. This is funding from the government that is administered through banks and other lenders. To apply for a loan, look for an SBA approved lender and submit your application. Other than SBA loans, you can borrow business loans from a bank and other lenders.
Get a Personal Loan
If you get turned down because your business profile is not appealing, consider getting a personal loan to finance your business. Just like business loans, you can get a personal loan from banks or other lenders including online lenders.
Use a Credit Card
If you don’t need much money, you can use your personal or business credit cards to finance your business. One of the benefits of using a card is that you can earn some points, especially when making purchases. Also, using a card can help in building your credit score. However, if your debt to credit ratio is too high, your score will be affected negatively. Payment history does affect your score as well, and so if you choose to use a card, ensure that you make the repayments on time.
Selling something that you no longer use is another step you can take to finance your business. You can sell your extra cars, jewelry, household items, houses and shares among others. The good thing about this approach is that it eliminates the financial strain that comes with paying loans every month.
Get Investors or Business Partners
Finally, you can get some investors or business partners to bring some money into your business. However, this is a decision that should be well thought of. When you involve someone else in your business, it means they will have a say in the decision making, and also, they will share in the profits. Be sure you are ready for this before making any decisions. Most importantly, choose your partner wisely. So many business partnerships have failed and this is something you can avoid by picking the right partner.
If you are having a hard time getting financing, you can get a side job, save up and start your business once you have enough. Also, you can change your business plan to start small and expand when you start making profits. A small start will require less capital and could be better than putting your business on hold. For instance, instead of building or hiring business premises, you can use your study room as your office and your garage as the warehouse.