Every year, we see new people setting up their own businesses and thus becoming entrepreneurs. Most of them are non-employer ones, which means that the only person working is the owner, or at least in the beginning. Whether they will be successful or not, all of them need some money to start off. Today we are presenting you a couple of options on how to get money to start a business.
Brief Guide on How to Get Money to Start a Business
1. Equity Crowdfunding
One of the best ideas on how to get money to start a business is to crowd fund. Equity crowdfunding is a simple way of getting the necessary money for becoming an entrepreneur. There are various online platforms that ensure you will find people ready to invest in your ideas, such as Kickstarter, GoFundMe or Indiegogo.
2. Friends and Family
Even if you use your own savings or sell stuff around your home, it might not be enough. As such, another solution is to borrow some money from your friends and family. They know you best and can trust you enough to give you amounts larger than the bank would, for instance. Among the advantages, you can count the fact that you may not even have an interest rate or a fixed deadline. However, if you fail with your venture, this can damage your relationships, not to mention you have to know how to find a business partner.
3. SBA (Small Business Administration) Loans
The SBA is an organization that was created back in 1953 by the Congress. It doesn’t lend money directly to small businesses, but it offers various programs for loans. They work together with non-profit lenders, credit unions or qualifying banks. There are plenty of people who choose this options when they want to get some funds for their business.
4. Venture Capital Firms
This is yet another good idea on how to get money to start a business. They make direct investments in companies and only ask for equity stakes for that business. Usually, they are very selective, so your request might be turned down. In general, they invest only in businesses that are running already and making a profit.
5. Stranger Investors
Leaving aside the formal institutions, there are plenty of rich stranger investors who can help you. Many rich people prefer to invest in the startups they think might succeed. Also called angel investors, sometimes they ask for an equity stake in the business. The best part is that some of them have lots of experience in the field and can help you succeed as well in that industry.
Bottom line, there are plenty of options to choose from if you want to set up a new business. From saving up to borrowing from friends, relatives or special organizations, there is a solution for every entrepreneur. Another option would be to ask for help from the so-called ‘angel investors’. They are rich people who love investing in new ventures, especially if they did it before and were successful with it.
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