Starting a business is not an easy task. It requires a lot of commitment and perseverance. Naturally, you also need to have sufficient funds to grow and expand your business. Otherwise, your company might fail or stagnate in its early stages.
While it may not be easy getting the funds you need to start and grow your business, it is definitely possible to secure funds and the right financing to enable you expand or diversify your business assets for healthy business growth.
According to the US Small Business Administration (SBA), to start a micro business you need about $3,000, while a home-based franchise can cost anywhere from $1,000 to $5,000. That’s just for starting; you should be aware that running and managing a company can also cost a lot.
If you need ideas for raising funds for your business, read on to find out more about how to get the money you need to start and grow your company and keep it financially stable.
Even if you have already launched your business, expenses can pile up pretty quickly. You’ll need to always stay prepared financially and know how to fund your business expansion for growth.
Top Tips to Raise Money to Fund Your Business
From applying for a loan to crowdfunding and saving money over time to fund your business, here are the top ways to fund a small business, whether it’s a home business or a brick-and-motor business that you intend to market and promote online:
1. Apply for a loan
Many entrepreneurs turn to banks for loans to fund their businesses. It’s not easy to qualify for a bank loan, but if you have a good credit score, you might be able to secure a bank loan for your business.
If you don’t qualify for a bank loan, try applying for a microloan, which ranges from $500 to $35,000. Microlenders don't need as much paperwork as banks, so it might be easier to get a loan with them if getting a loan from the bank fails.
2. Try crowdfunding
You can also turn to the online crowdfund platforms to help you get funding for your business.
Crowdfunding lets your family, friends, and even strangers donate money for your goal via online platforms like Kickstarter, Indiegogo and GoFundMe.
This method of securing funds, however, isn’t a long-term financial solution for funding a business, so use the cash that you’ve raised wisely.
3. Get funding from SBA
If you’re having problems qualifying for a bank loan, check with the US Small Business Administration (SBA). Note that SBA doesn’t give money to help entrepreneurs start a business. Rather, it allows businesspeople to acquire loans or venture capital.
If you want SBA’s help in securing a loan, make sure your business is registered and operating legally. Your company has to be inside US territory, too.
You also have to demonstrate you’ve invested enough effort into your business, and give proof you have tried other financing options but failed to acquire the funds you need for your business.
4. Go for bootstrapping with your savings
If you can, fund your own business instead of relying on other sources. Start your business and support it yourself. Save money before starting the business or leverage your assets.
If you’re determined to succeed, you won’t let anything stand in your way of increasing your savings to fund your business and achieve your business goals.
If you’re not sure or need help bootstrapping, a business coach like StrategiQ can help in providing the advice, inspiration, and support you need to save and manage your money better.
5. Consider credit cards
Using a credit card to fund your business requires you are financially disciplined and very responsible with money.
Use different credit cards for your business and personal needs to avoid mix-ups when it comes to payments, otherwise you might end up in more financial fixes than you would want.
6. Find a partner / co-founder
If you can’t do it alone, find somebody who shares your goals and vision for your business. Partner with them for combined funding and co-ownership of the business.
If you have the right partner or co-founder, you can get enough money for your business. You can also help each other in other ways to make the business grow faster and thrive.
7. Seek support from an angel investor
An angel investor is someone who puts money into a promising start-up business, with the intent of helping out the entrepreneur and not benefiting from the profit itself. These investors are also called private, informal, or seed investors. They usually use money from their pockets to help fund a business. If you can find one, they can help fund your business.
Although some people have the money, not everybody can become an angel investor. This is because of specific qualifications potential investors need to follow. First, potential informal investors need the proper accreditation from the Securities Exchange Commission (SEC). A yearly income of $200,000 and a net worth of $1,000,000 is required is required as well.
Finding money to fund your business isn’t always easy, but keep looking as there are many different ways to raise money to fund a business. Not all methods will work for you, but don’t be discouraged. With some patience and research, you'll find the right funding.
Once you get the right funding, you are all set to grow your business and take it to the next level.