Money is the centre of the Universe. When I say this, I’m sure there will be a percentage of people who wouldn’t agree with me. But, just hear me out. I surely agree that a person’s brain is his biggest asset, but this biggest asset of an human being when combined with the biggest necessity of human being, money, makes for a blockbuster combination. This combo is what a startup requires. While you might have an exceptional idea in place but that idea is no use if you’re able to fund your idea and make it a reality.
Here are 7 ways through which you can finance your startup.
1) Loans –
One can consider raising money through the 1953, Congress created Small Business Administration (SAB) Loans. It offers a variety of guaranty programs. One can get money from their own bank, and be guaranteed by one of these programs. One of the best features about these loans is their interests rates. These are often given at interest rates lower than the traditional bank loans.
2) Crowdfunding –
The World wide web or the Internet can act as your saviour in times of distress. Once an make use of some of the most popular and trustworthy crowdfunding websites like the kickstarter etc to raise the desired amount.
3) Self financing –
The greatest of all. Don’t ask anyone for loans and money, when you yourself have the capacity to fund your dream. Use your credit card, sell your old gadgets, cut down on unnecessary spendings and voilà, you have the money required to make your dream a reality. Further, the best part is, you don’t have to repay anyone or shell out huge interest rates.
4) Family and Friends –
This is one of the most famous methods being used by entrepreneurs. First of all, there isn’t a set deadline to repay the loan and the interest rate is often not there or is very less compared to the one levied by the banks.
5) Angel Investors –
They are the people who agree to invest in exchange for equity in the business. Most of the times Angel investors are people who are already massively successful in their own industries and want to encourage others in succeeding in the same industries.
6) Peer-to-Peer Loans –
One needs to P2P websites such as Prosper and Lending Club etc. in order to land himself or herself this kind of funding. One is required to post the amount one needs and why they need it. After this, the potential investors have a thorough look over your request and decide whether or not you’re eligible for the loan amount required. Once the loan is approved, you will receive the money. The money will have to be repaid the same way as a loan is repaid in a traditional bank loan.
7) Venture Capital –
Venture capital firms invest in your business in exchange for equity in it. The biggest disadvantage of this method is that these companies often only invest their money in businesses that are already established or have a huge profit potential.
Now that you know seven of the easiest way to fund your startups, when are you starting your entrepreneurial journey?