6 Easy Ways to Finance Your Startup

Starting a business is a great way to take control of your future and escape the pressures of the standard 9-to-5 lifestyle. You’re free to follow your passions and grow your income without answering to a boss. However, starting a business takes more than just hard work and dedication. You need to find ways to finance your new startup. Here are some of the best ways to get the money you need to get your company off the ground.

Start with Savings

The best way to finance your startup is with your personal savings. This helps you avoid taking out additional debt to get your company off the ground and every little bit helps. You can always combine your savings with other funding methods to maximize the amount of money you have access to. Just make sure that you don’t completely wipe out your savings account. You still need to have a cushion to help you cover standard living expenses while your business gets up and running.

Talk to Family and Friends

Your family and friends are your support system. You can use this to your advantage and let them know that you’re starting a business. Some family members may be willing to give you a low or no-interest loan to help you get started.

If you go this route, try to work with an attorney to make sure everything is handled properly. The last thing you want to do is enter into a loan agreement without clear terms. If you’re not comfortable asking for money upfront, you can always ask friends and family to help out by offering their time.

Your friends can help you market your business or run booths at local events to showcase your brand. This saves you from having to pay someone to do the same tasks.

Look Into Business Loans

If you’re looking for larger amounts of money to help with small business funding, traditional business loans can be the best option. These loans require a solid business plan, good personal and business credit scores and the proven ability to bring money in each month.

Though some lenders only work with established businesses, others provide loans to new startups. You’ll need to shop around and get quotes from different lenders to find the best option for your company. Once you have several quotes, compare their interest rates, terms, and principal amounts. Most business owners choose lenders that offer the lowest interest rate and the highest principal amount, but it’s always best to choose the lender you’re most comfortable with.

Partner with Investors

You may not need a business loan if you choose to partner with investors from the very beginning. Investors typically give you money in exchange for a stake in your company. This means you’ll have to split the profits you bring in each quarter or year with those investors. It’s a great way to avoid taking out a traditional loan or relying on friends and family to help. Though it will eat into your profits slightly, it shouldn’t keep you from growing your income.

Make sure you discuss the terms with each investor you approach. You never want to sign away your entire startup in exchange for money to run your business.

Turn to the Internet

The internet makes it easier for new startups to get the funding they need through crowdfunding. When you decide to crowdfund your startup, you essentially market your goods and services to the world-at-large. As people discover your brand and your message, they can contribute any amount of money they wish.

Often, companies offer things like stickers, discounts, and other goods in exchange for money to back their startup. There’s no limit to how many times you can launch crowdfunding campaigns. Most companies just time their campaigns with new product launches or other business improvements.

Charge It on a Credit Card

If you have a credit card, you can always use it to help pay for equipment and products for your business, but it’s not something you should do lightly. Credit cards often have higher interest rates and it’s easy to get into trouble if you charge too much too quickly. Consider using traditional loans, investors, and crowdsourcing campaigns before relying on your credit card.

Launching a startup is exciting, but you’ll need money upfront to bring your dreams to life. Try these great funding options to get the money you need quickly.