Are you an entrepreneur who has a great idea for a new business and need startup funding to launch – but you got turned down for a bank loan? No worries my entrepreneurial friend, here is a dozen of the best, most reliable ways to get money to start your own business.
These sources of financing are great for seed capital and individuals with no or poor credit scores. Check out these 12 options for startup funds. Many are unexpected ways you may not have thought of to get the money you need to start your company.
Read on future business owner:
Claim up to $26,000 per W2 Employee
- Billions of dollars in funding available
- Funds are available to U.S. Businesses NOW
- This is not a loan. These tax credits do not need to be repaid
- Microloans Nonprofits – Most microlenders are foundations that are social mission focused. Their assignments are to stimulate local markets and assist communities that are disadvantaged. Loans are usually less than $ 50,000 for startups. Bonuses from these types of lenders are training and expert consulting at no extra charge. Start by researching these microlenders Grameen America, LiftFund, and Opportunity Fund.
- Grants – Both private and government foundations are sources of grants to encourage new inventions and technology. Browse online tens of thousands of available national grants and apply at Grants.gov
- Friends and Family – Business investors want you to have gotten money from friends or family, to show your credibility before they will consider investing themselves. These professionals guess that if your friends and family members invest in your business, then it probably has merit. Early stage startups often get launch capital in this manner.
- Vendor Credit – If your startup is a product line you may be able to negotiate credit at the subcontract manufacturer. This method allows you to get your items produced first for which you pay later after you sell your new line to retailers and get paid by them.
- Credit Cards and Personal Loans – Though this way is simple, if you have credit cards and good credit, it also has many fees and high rates of interest. The advantages are that you aren’t currently selling, nor trading your new firm’s equity. Make sure to have a significant profit margin on your merchandise because you will need to factor the credit card feeds into your prices. When you’ve started your new venture for a side gig or part-time organization, and can demonstrate a year’s business online, you might succeed in getting funding from my preferred creditor Kabbage.com. Read my review of Kabbage business loans
- Crowdfunding – In 2016 the JOBS act eased the SEC Security Exchange Commission’s regulations to permit businesses to issue securities (stocks) to be marketed for startup funds during crowdfunding campaigns. Sites including Kickstarter enable inventors to have pledges, which can be contributions or pre-buys to have businesses.
- Barter Trade Equity or Services – An excellent solution for those entrepreneurs that have in-demand skills that they could “pre-sell” for either services or cash. A good example would be receiving office space rented at no cost for agreeing to be the computer repair team for the office building. Professionals, such as lawyer and accountants, often use this method to reduce significantly their startup costs.
- Savings and Bootstrapping – Today’s reduced cost labor and services, startup costs are at an all-time low. You might have the ability to finance your startup yourself known as bootstrapping. Think about selling a few of your collectibles, automobiles or jewelry to get startup money. Once, I sold my car to launch a company. I gambled that the cash value of my car would be worth more in a year invested in my startup business than an older car. I was right, and that $5,000 car sale increased to $50,000 in product sales within one year.
- Venture Capital Firms – Although not available to startup financing, seed funds have been obtained by some businesses. Companies like Accel Partners do speculate in startups for larger ventures of a million dollars or more.
- Business Investor Groups – Many US region have teams of investors that want to encourage startups and invest. These people form their group and pool their resources of around a million bucks and look for qualified startups. Locate these groups on sites like Gust, your industry trade publications, and local metropolitan area business newspapers.
- Advance on Royalty Payments – Find a company that is complementary or a customer for your new business that is willing to pay an advance on your royalties. This early licensing used white-labeling agreements, which means that you allow a manufacturer to manufacturer your product invention as though they were the founders.
- Startup Incubators and Accelerators -These organizations are made to nurture and develop new businesses and technology. They are related to community development teams, universities and sometimes large corporations. Training and resources are provided and seed financing can be obtained.
About the Author
Marsha Kelly sold her first business for more than a million dollars. She shares hard-won experiences as a successful serial entrepreneur on her Best4Businesses blog http://best4businesses.com. Marsha regularly posts business tips, ideas, and suggestions as well as product reviews for her small business readers. As a serial entrepreneur who has done “time” in corporate America, Marsha has learned what products and services really work well for your business today.