Entrepreneurship is attractive to many people. Especially today when there are many opportunities to start a small business online and it’s rather easy. No wonder that many students look into this, as they have fresh ideas and motivation.
10 Places to Look for Money for Your New Business
But money is still a big concern for any entrepreneur.
A lot of times those who start out in this field have no idea where to find capital for a startup. It is not knowledge that comes easily.
Finding capital requires a lot of research and effort. And one needs to know about all the possible sources that are out there. For example, when students have a question of “who can write my essay for me online for a reasonable price”, they’d conduct full research on opportunities and offers out there.
It is essential to find a credible provider with a great track record and excellent results, for example, you can always get help with your homework from EssayPro. The same way works looking for financial support for a new business.
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Students are notorious for not having enough money and when it comes to starting their business one needs to put even more effort in to start. One needs to look into all options available, evaluate pros and cons, and find the optimal solution.
Here are the places to look for money to support your company.
Personal or Family Assets
Of course, for many entrepreneurs, it might not be a viable option. Yet, it is important to mention. Start with an evaluation of what you have and what can be invested in the business. It can be something in lines of:
- Personal savings;
- Small interest loans from family members;
- Selling your assets;
- Taking a loan on a property you own (usually has a small interest, about 4.5%);
- Using your retirement account (choose this one only if there are no other options as it is tricky and risky);
- Using side income to invest in a company;
- Pre-sales of products or services.
If these options are not accessible, do not worry. There are other places to try and find the funds.
Banks rarely give loans to starting businesses, which is fair. None of their clients would want them to invest their money into a startup. And they are also legally regulated not to do so.
But there are loans for companies that have been operating for some time. So the success of getting a loan from a bank lies in your particular situation.
It takes a lot of documents and a great credit record to get one. But if you want to try – look for banks that are familiar with your industry and guarantee SBA loans.
SBA is Small Business Administration loans where the majority of entrepreneurs go for funding. Check out their requirements to see whether you are applying to this program.
They also give money to startups (usually a founder needs to supply one-third of the required capital). To get accepted, one works with a local bank to apply for such a loan.
Small Business Lending Fund
It is a governmental institution that is dedicated to supporting small entrepreneurs. Their purpose is to grow the economy. One can check online what banks they are working with and how to apply.
Lots of people talk about getting venture capital, but in reality, it is pretty hard. Venture capitalists invest other people’s money into startups so they do not risk unless it is completely necessary.
They usually look for specific products or new market opportunities that have great prospects of revenue. It is worth trying, but they usually look for something exceptional.
This type of funding is much more common as people invest their own money. And they are more likely to put their funds into a company even in the starting stages.
Of course, they also are looking for some outstanding ideas, but the chances to get funding here are higher. One can look for angel investors online:
- Gust Angel Network;
- Alliance of Angels;
- Hyde Park Angels;
- Angel Capital Association, etc.
Look into governmental, corporate, and self-employed grants to find out which you can be a subject to. They differ in requirements and the money they offer.
Realistically, one would seldom get hundreds of thousands of dollars in financing here, but even a small amount of money can support a business.
Start with the grants.gov website to check out opportunities. There are more than a thousand programs out there. Some other programs to check out:
- SBA’S Women’s Business Centers and their programs;
- National Association for Self-Employed Grants;
- Nav’s Small Business Grant;
- Small Business Innovation Research Program;
- Amber Grant for Women;
- National Institute of Health Funding.
Also, have a look at economic development programs you might be eligible for.
FinTech institutions provide alternative loan and credit options for companies. They usually offer smaller loans than banks, but they also consider different factors, for example, many have more interest in performance than in credit score.
Yet, be careful and only choose credible companies. Here are some of them:
- Kabbage (for eCommerce);
- PayPal (for those operating with PayPal);
The internet has given people multiple benefits; one of them is the opportunity to raise funds digitally. There are many different platforms with different requirements.
But it is usually enough to register, post your idea, plan, and some possible rewards to funders (early access, brand products, gifts, recognition, etc).
Some work as all-or-nothing platforms (Kickstarter) – you can get money only if you reach your goal. Others do not have such restrictions (Indiegogo).
If your business has to do with content creation, you can try Patreon by offering additional content to funders.
Sometimes it is much easier to explain the idea to a peer rather than a venture capitalist. Here are some great sites to look for peer-to-peer lending offers:
- Funding Circle.
But do not agree on an extremely high interest rate, be reasonable.
Money is probably the hardest part of starting and supporting a business. Yet, it is possible to overcome the lack of funds by going to the right places. Make sure you have your documents ready, including a comprehensive business plan, budget, and revenue estimates.
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