When startups and entrepreneurs initially look for financing to help them launch or run a business, often they do not realize they may have numerous options rather than just traditional business loans. For example, many are surprised to learn that when used with care, a personal loan can be a remarkably viable funding solution. In fact, according to financial experts at Forbes, depending on the circumstances, personal loans can be extremely beneficial when a company is beginning to ramp up it’s operations.
Here are several other ways business owners can acquire seed capital or pay expenses when implementing a new enterprise.
Borrow From the Future
If you have already established a retirement savings or an IRA account, you may want to consider using part or all of the money for your startup venture. Although you cannot access a Roth IRA account for this type of activity, if you borrow from a standard pension or IRA, you will not be forced to follow a bank’s strict loan repayment guidelines. However, do remember to rebuild your retirement savings as soon as possible.
Utilize Credit Cards
Although financial institutions that issue credit cards can require borrowers to have credit scores over 600, may charge over 20% APR, and enforce stringent repayment schedules, many borrowers find credit cards are convenient to use and fairly easy to get. Nevertheless, try to avoid maintaining high balances, shop for low interest rates and make timely payments.
Contact Venture Capitalists
If you have an excellent idea and a business plan, you can ask venture capitalists for financial assistance, since they are oftentimes looking for startup businesses that can earn money for them. Although their investment may entitle them to certain powers within your company, you will not need to repay the funds.
Crowdfunding is an increasingly popular way for startups to raise money. The practice of crowdfunding a business often takes place on the Internet. It relies on the donations of many individuals, including family, friends and strangers, to invest in a business idea or person that they like. Repayment is not required, but investors will most likely look forward to keeping an eye on the progress of the business.
Because there are many ways to fund your project, it is a good idea to look at all your options. After all, finding the right funding solution cannot only keep your business afloat, but it can help it thrive and grow.