Inadequate funds for a startup or a small business may be quite a headache especially if your personal savings can’t fulfill your needs. There are however several small business financing options that most small businesses have successfully used that you too may consider which include:
Microloans are usually given to small scale business owners with limited means of financing their businesses. Small business loans can boost your already existing small business or startup venture. Unlike other types of loans, microloan repayment is easy.
- Selling assets
To fund your startup business that does not require a lot of money to begin, you may consider selling one or several of your assets that will bring you some money. This small business startup financing is among the best options to fund your business as you will not have to worry about any interest rates or repaying back and you know best what you can sell to get money.
- Credit cards
Credit cards are a quick way to finance your small business. With credit cards you will have minimum payment as long as you don’t have many expenses. If your startup fails to pay in time, the interest rates and other costs can accumulate and give you bad credit.
There are websites that fund small businesses growth through crowdfunding. On these sites, businesses can pool some investments from multiple investors other than relying on a single investment. Crowdfunding sites may however apply different policies. For example, some websites will only require you to raise the amount you have proposed in order to keep any funds raised through crowdfunding. On the other hand, some sites will allow small business owners to keep all the money raised. Note that some fees may apply for processing the funds raised on some websites.
- Family and friends
Other than the traditional borrowing of funds from financial institutions, you can ask for some financial boost from your family or friends. Some advantages with this option is that you will not have to prove your credibility in getting the funds and you may pay low or no interest in getting the loans. You however need to maintain good communication with your lenders whenever they ask about your business progress to maintain the good relationship.
In conclusion, it is always wise to find out which small business financing option will service your business well. Choose a financing option that will allow you to make repayments while your business is still running. Avoid debt accumulation at all costs as they may slowly kill your business.