When you get the perfect business idea, write it down and start making a plan. You’ll need a strong brand, eye-catching marketing materials, and money. Finding startup capital can be difficult, but you’ve got a variety of options. Check out the top financing options for starting a business.
Maybe you do have some money squirreled away. If you have the funds to start your business right away, you’ll achieve goals more quickly.
If you’re pulling money from a retirement account, be aware of any taxes or penalties that may arise from your withdrawal.
The Small Business Administration (SBA) does not provide loans on its own. Instead, it works with traditional banks and lenders to offer you a reasonable loan.
However, small startups often have a difficult time qualifying for these loans without a high business credit score. Once your business has grown a bit, you may qualify for a loan later.
Sometimes, individuals or firms are interested in investing in small businesses. If you’ve been declined for a business loan, network and reach out to potential investors.
However, if you do work with venture capitalists, they will hold some sway over your business. Is your company ready for a board of trustees? If so, venture capital investments can benefit you greatly.
Angel investors are slightly different from venture capitalists. An angel investor will give you that startup capital without any strings attached. They’ll often invest in businesses that don’t have the demonstrable potential for growth that venture capitalists like to see.
Angel investors can also provide guidance and business advice along the way. They’re a great financing option if you’re just getting started.
An easy and potentially powerful way to gain startup capital, crowdfunding has become more popular in recent years. However, it’s not as easy as creating a Kickstarter page and then kicking back. When you learn about crowdfunding in business, you can use it to your advantage.
When you gather startup funds from loved ones and social media followers, they feel more like a part of your company. They’re not on a board of trustees, but they can smile knowing they played a part in your success.
Are you currently an office drone looking to escape the rat race? Quietly start up your business on the side. Talk to a financial advisor about how you can utilize your existing 401(k).
First, you’ll have to set up a 401(k) program within your own company. Then, you can pull funds from your existing account and roll them into the new one. This way, you can avoid those taxes and penalties from withdrawing money.
Starting a business requires some capital up front. Luckily, you’ve got a plethora of options in front of you. Use any one of these top financing options for starting a business to ensure future success.
Thanks for reading! Do you want to create thought leadership articles like the one above? If you struggle to translate your ideas into content that will help build credibility and influence others, sign up to get John’s latest online course “Writing From Your Voice” here.