What Are My Options?
The world of the startup company is a difficult beast. Finding money for the funding of a startup company is, by comparison, a monster of a task. While there are many ways to get funding, only a small number of businesses manage to acquire the funding that they need. So, what ways are there to get yourself up and running?
Get A Startup Loan
A good method if your company is less than two years old. You may be eligible for a startup loan, and you can get a decent amount of funding at the start so you can start to get the basics in place, from business supplies to finding a permanent location.
Using Peer To Peer Loans
A peer to peer website will put you in touch with money lenders that operate privately. As a hands-on approach is implemented with this sort of method, it helps to promote a more personal relationship between the lender and the recipient. So you can negotiate more terms or more funding.
Getting Cash Advances
Having a cash advance is a great way to help you out if you are struggling to get money from clients or customers. It is also known as debtor finance, and it is a common approach used by startups. If you need to pay an invoice before the customer has paid you, it can really put you into the red. The way the advances work is that the financier purchases a percentage of future transactions on a card, in return they put the money into your account, which takes around 10 working days, and the repayments are a percentage of each individual transaction, which is typically 10% or 20%. This gives you the breathing space you need to push your company forward despite the financial pinch.
Find An Angel Investor
A great thing about the standard angel investor or business angel is that these people are entrepreneurs themselves, and so they have a decent understanding of the position you are in, as they’ve been there themselves. As a result, the whole pitching process can be a lot less intimidating and stressful than pitching to a bank. The caveat in this is that you will have to give up a share of your company to the business angel. But if you are happy with this so you can get your business off the ground, then it is worth doing.
Using Crowdfunding Sites
Even filmmakers are taking the crowdfunding approach nowadays. The basics involve asking for a donation, and in return, you provide them a small token of your appreciation, such as a sample product. It can be a great way to earn a lot of money in a short amount of time IF you pitch yourself correctly.
The method of equipment financing is that an item of yours is used as collateral, and the lender will fund you the financial equivalent of that piece of equipment. This is great if you are running a company reliant on machinery, such as farming or manufacturing. But if you are running a typical startup, it may not be worth your time and energy.