If you’re thinking about starting your own business, you may be wondering how to fund it. The good news is that many different options exist for funding your startup business. Here are some of the most common methods.
Personal Savings
Perhaps your biggest asset is your own money. Perhaps the greatest asset of all is that you have a lot of money. If you have the required cash to start your business and won’t require more than a few months of use before you can bring in revenue, consider using this as an initial funding source.
Family and Friends
Family and friends often give financial support when starting a business. This funding can come from bank loans and gifts, and loans from other sources. It is important to note that this type of funding is used with caution because it may not be reliable in an emergency.
Small Business Loans
Many banks offer business loans to help entrepreneurs start their companies. Each bank has its requirements for obtaining a business loan, which is why it’s important to understand all of the terms of the loan before you commit to accepting it.
Bootstrapping
This means funding your company by using revenue from sales rather than outside investments. This form of funding is usually employed by entrepreneurs creating product-based startups that have a high potential for generating revenue quickly.
Crowdfunding
Crowdfunding is a way to crowdsource a startup’s funding needs. For example, suppose you and your startup have created an innovative product that people want to buy, and you have the capital to fund its development and production. In that case, you can access funding by creating a campaign for Kickstarter or Indiegogo and telling people how much money you need to develop your idea.
Small Business Grants
You may also apply for a small business grant that will give you startup funding. The government provides these grants to help startups gain traction and market themselves. A list of establishments that offer small business grants is available online, too.
Trade Equity
Trade equity is another way to fund your startup. For example, if you’re starting a computer repair company, you can use the computers in your inventory as collateral for loans. This is a good method of obtaining startup funding because it doesn’t require starting your company from scratch. For more on startup ideas visit Startup Grind.
In conclusion, the above are just some ways to fund your startup business. The best way to finance it is ultimately up to you, so think carefully before you start your business, consider consulting with experts like BizFund, and work on creating a consistent revenue stream from the get-go.
Emma is a freelance writer based out of Boston, MA. She writes most often on health and education. When not writing, she enjoys reading and watching film noir. Say hi on Twitter @EmmaSturgis2
