1. Personal Money
If you are lucky enough to have your own money saved up, this might be the best and safest way to finance your own startup business. Although this has the lowest yield, it also carries the least risk. To be successful at saving enough money for this large investment, you need to cut back on your own personal spending!
2. Borrowing Money from Family
If you are in a family of entrepreneurs, you might be able to borrow money from your family without too much trouble. But remember, this should be the last resort and only if it is absolutely necessary. Relying on interpersonal relationships for unconditional funding really isn’t the way to do business.
For obvious reasons, borrowing money from those close to you can come with its own set of problems.
3. Credit Cards
Credit cards aren’t probably the best solution but as long as the investment isn’t too large, a credit card could be a decent solution when funding your startup. Though it could be risky, if you don’t plan to go beyond your credit limit and pay off the balance at the end of the month, you could get away with it.
4. Loans from Financial Institutions
Borrowing money from financial institutions could be a great solution if you can secure this type of funding.
Here are some of the types of financial institutions that you might want to approach:
- Credit Unions
- Small Business Administration (SBA) Loans
- Savings and Loan Associations (also called thrifts)
For example, the SBA is a government agency that gives loans to small businesses with certain qualifications.
5. Angel Investors
If you know the right people, you may come across angel investors that take a special interest in your startup idea and business plans. They will be able to provide you with the necessary funding for your new business idea.
You should have a plan of action once you get this type of financing from angel investors. If they take a large stake in your business, make sure that you deliver on what is promised.
6. Business Loans
There are countless business loan companies who will be more than happy to loan out your business as long as they can be ensured a return. Just make sure that the interest rate isn’t going to drain your startup in the long run.
7. Business Investment Groups
Business investment groups can be a great resource when looking for funding for your business idea. Though these groups are usually more focused on turning a profit than getting your startup off the ground, they could turn out to be an invaluable resource in your quest for starting up any new venture.
Crowdfunding can be an amazing low risk, high reward solution to finding initial funds for your startup. The difficulty here is marketing, and providing a service or good that people will be crazy for!
9. Business Investment Banks
If you are serious about starting up your own business, then business investment banks should be somewhere on your list of possible funding sources. There are several things that you need to consider when approaching these types of organizations for funding and taking their money.
Gaining funds for your budding startup company can be very difficult. If you have your own money or can secure investment from family members, then this will be the best way to get a startup business off of the ground. But if that isn’t possible, then you should consider each and every different source for startup funding as long as they are legal.
Hi! I’m John, the owner of New Vine. Here I post about all things business, finance, and real estate. My aim is to help people learn about all things business!