How to Find Funding for a Small Business
Starting a small business may seem like a nice idea, but when it comes to finding funding to grow, things become a bit hard. Funding your small business is crucial as you need a certain amount from time to time as the business progresses.
You should know that getting your hands on funds may entail a lot of steps before you can finally inject money into the business. There are several funding options at your disposal, but not everyone is able to capitalise on them.
Instructions
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1
Bootstrapping
There is nothing better than your own resources and it does not matter whether they are limited or unlimited. Put your own savings/money in to your business and try to meet all the start-up costs this way. It is true that most of the start-up costs can be covered by your own money, but you will definitely need more resources in the future to further boost your sales and assets. Another prime example of personal money is the use of a credit card. Be careful with the amount you use with your credit card as you surely do not want to get trapped in debt. -
2
Get money from family members and friends
If you do not have personal savings, the next best option is to contact friends and family for a loan. If you can get an interest-free loan from a friend, you can put your business on track without much effort as you won’t have to worry about paying off the interest. You can easily get money from friends and family if you present your carefully-created business model to them and ask them to join you. Although starting a small business in partnership with a friend who can invest will not make you the sole owner of the business, it is worth it as you will save a lot of inconvenience and the burden of work may be distributed among you and your friend. -
3
Bank loan
You can meet most of your start-up costs by putting your savings to the business or money obtained from friends or family, but when your business is back on track it definitely needs more capital to keep moving. In this situation, it becomes crucial to get a bank loan. In order to ensure long-term growth and operating capital, a bank loan is the most effective solution to keeping yourself in business. However, if your business has yet to get off the ground and there is still a lot to be done regarding implementing your start-up plan, you’d be better off not going for bank loans as they come with high interest costs. Failing to pay back your bank loans can put you out of business.
