Starting a business isn’t easy.
Whether you’re trying to launch the next great start-up or just want to get a local service business off the ground, new businesses need cash and resources.
But, with more than 20% of new businesses failing within the first year of opening their doors, finding funding for your venture can be a real challenge.
If you’re trying to get a new business off the ground but need some extra cash to make it happen, read on for a quick look at a few ways to find start-up capital.
What do you really need?
Before you approach investors, your bank, or other funding sources, it’s important to get real about what your business needs.
If you’re not up and running yet, make sure you have a thorough business plan in place with the right financial projections. If you are already operating, make sure your finances and future plans are well documented.
Where to find startup capital
Loans and funding for new businesses and startups are out there, you just need to know where to look.
If you’re just starting out, borrowing money specifically for your business is tough.
Believe it or not, many businesses are actually started with personal loans. Though you’ll be personally liable for the debt this is often one of the easiest ways to get a business off the ground.
If you’ve already started your business or have a really good business plan in place, business loans are another good option.
With a business loan, the business will be liable for the debt and better terms are typically available than personal loans.
Friends and family
If the bank just isn’t an option, friends and family are often a source for new business capital. Just make sure you know what you’re getting into and that everyone understands the terms.
Personal credit cards are another simple option for getting a business up and running. Just be careful to only buy what you need and make sure the business can pay you back quickly.
Finding Startup capital when you have bad credit
Let’s face it, personal loans require really good credit and business loans are tough to get unless you’ve been in operation for a few years.
If your credit isn’t so hot, you’re going to need to get creative and look for no guarantor involved loans or those that don’t require much credit. Two of the options we’ve already discussed — loans from family or friends or existing credit cards — are also good options if your credit isn’t great.
Just be sure you understand all of the terms before taking out a loan designed for those with a lower credit score.
Finding start-up capital can be a challenge, but it’s not impossible. Just be sure to explore all of your options and know what you’re getting into before you sign.
Check out all of our articles for more on getting your start-up off the ground.