Funding a start-up can be challenging particularly as there are several ways to get the money that you need. Whether this is through the use of crowdfunding or short-term business loan lenders these options are ideal for any business model of any size. In this article, we are giving you our tips for finding the perfect alternative funding for you.
Government Grant
One of the main ways that you can fund your business is using a government grant. With the likes of the Prince’s trust and small business allowance, this can help the business begin trading and creating a product to sell. If you are working on an e-commerce business, a small business allowance can be put towards developing the website and increasing the outreach if the business through marketing efforts. This is ideal as you will not have to pay back the money given to you as you are entitled to it, therefore allowing you to begin trading immediately.
Crowd Funding
Another way to fund a business is through efficient crowdfunding. This involves investments from potential customers on a product or service helping to get the business up and running. This can be completed on websites such as Go fund me and IndieGoGo and Kickstarter which involve a platform of people investing in a product to be made. This is ideal for a startup as it allows market research to be completed as well as building a profile on the potential customer base and segmenting each section accordingly.
Small business Loans
If crowdfunding is not as reliable for your business model, there is always the option of a small business loan. In addition to the borrowing amounts being much higher, there are multiple benefits to borrowing money from a bank or loan broker. Depending on the amount that you borrow, security may be needed in order to borrow the money, this, therefore, involves outing assets forward to cover the costs should you be unable to pay it back.
This far less of a risk for a business and can be a suitable amount to ensure that you have the money you need to fund your business in the early stages.
Investors
The final way to fund a small business is by using investors. These can be people found through networking or even family members that are willing to invest a certain amount of money into the business. In a startup business, you can also offer your investors a share in the stocks as a thank you or a repayment. This is beneficial for those that have seen investment from family as the price of the stock could increase dramatically should the business be successful. If this is the case, they can then choose to cash in their investment and regain their investment and sometimes more as a result.
If you are a small business looking for a form of alternative funding any of the choices listed above would be beneficial to get you on your feet and making revenue. Which will you opt for?
