Starting a business can be stressful. It’s hard to convince people that your idea is workable or something we can trust. You need to have a business idea as well as have the convincing power to convince them to buy into your idea.
In most cases, business finances are among the things that make or break it. When starting, ensure you have enough capital. If your savings are not enough, look for ways to raise more capital. Unlike traditional banks that are so hard to get a business loan for a startup, LetMeBank, among other options to be discussed below can be great lending alternatives.
Business Credit Card
As scary as it sounds, it’s still an option. If you delay paying the loan, your credit score is ruined. In another case, you may use the loan to fund your startup that will help you to move to another level of financial stability. It’s up to you to decide whether the startup is worth that risk.
With business credit cards, it gives you the freedom to borrow as much as you want or the least you want. Another advantage is, you do not need collateral to secure your loan. You can borrow any day and any amount.
Small Business Grant
Small business grants are funds you can get from the government and non-profit organizations. In most cases, this fund is offered to specific groups of people, such as young people and women. They also provide these funds to people in particular communities who are less fortunate.
The good thing is you can never know if you will get the loan or not until you apply. Sell the idea to the organization. Make it attractive and workable as you see it yourself. Convince them to give you the loan.
Family and Friends
Another way of getting the loan is by borrowing it from your friends and family. It’s usually a bit tricky to borrow from your loved ones, but the truth is, they are a great option to offer to fund for your business.
Have your business plan ready and sell them your idea just as you would do with an angel investor or venture capitalist.
If they agree, it is advisable to put everything in writing. This way, they have faith in you and your business.
Define all the terms of the loan clearly, if they are supposed to own some part of the business or you are supposed to pay back the loan. If you are to pay back the loan, indicate the date you will repay and the interest (if any).
Make sure they know the risk they are taking by lending you. Let them know the business can fail. This way, you make sure you maintain the relationship. There are also peer to peer lending networks that lend money to startups to people who have viable ideas.
There are different types of crowdfunding. One, donation-based, marketplace lending and rewards-based crowdfunding.
With crowdfunding, you raise funds online through a dedicated crowdfunding platform. With this, you post your business proposal, and if you get people interested, they loan you the money. You set a specific goal, and people donate for you until you get to that goal. The good thing with this platform is there is zero interest (rewards-based) An example of this platform is Kickstarter.
You can run raffles to get cash for your startup. What you do is to offer a prize to the person who wins the raffle. It is supposed to be something that the one who wins will use.
To attract more people to buy the raffle, you can offer 50% of what you get from the raffles to charity. Also, you can find people who are known to sell raffles and let them sell your raffle in their name. That way, the chances of getting more cash are high. After that, you can divide what you get in the ratio you had agreed.
Get an Angel Investor
An angel investor is someone willing to invest in your company in exchange for ownership equity or convertible debt. It could be a one time support or occasional support. What they need is a detailed business plan to help them understand your idea more.
You need to show them they are not wasting their money by investing in your small business. In some cases, they will act as mentors and advise on how you should run your business since they have been there and have more experience.
You should show the investor you understand the market you are getting in. Let him see you mean business by making sure you have someone who has more experience in what you are doing on your team. Let him have some confidence in your idea.
Before starting a business, make sure you understand the market and competition. Get to know all the advantages and risks involved with your business. Most of them all, ensure you have enough funds because most businesses fail in the first year due to insufficient funds, among other factors.