No matter how genius your business idea, it won’t be successful without funding. Lack of capital is one of the top reasons small businesses fail.
But getting access to startup funding isn’t usually as simple as applying for a loan from your bank.
Here are 3 great, realistic ways to get startup funding for your new business
1. Small Business Grants
The beauty of grants is that they don’t have to be repaid. The Small Business Association (SBA) offers grants as a way to motivate small businesses to create jobs in a specific industry or neighborhood.
These grants also motivate underrepresented entrepreneurs, like women and people of color, to start businesses. To find out about grants available in your area, you’ll have to contact the local chapter of your SBA.
Expect them to request a copy of your business plan during the process. You also want to make sure you have already incorporated with the Secretary of State before completing any grant paperwork.
The SBA won’t meet with you to consult about your idea. Instead, they’re expecting your business to already be set up with a plan in place before they are willing to consider you for a grant.
2. Angel Investors
A great way to fund your startup is using an angel investor. An angel investor is an individual or small group of investors who provide capital to a specific type of business or industry.
For example, an angel investor might love cupcake shops and opt to invest in the most promising cupcake shop entrepreneurs in their area. Some angel investors focus exclusively on healthcare technology.
It’s important to do your research on the investor’s interests and funding history to see whether your venture makes sense for them. Angel investors can be hard to find so you want to make sure you don’t ruin a potential relationship by wasting their time.
The best way to prepare is by researching the investor’s interests and making sure you can provide value to them. Use the Angel Investment Network’s directory tool to help you do background research on investors in your area.
3. Line of Credit
Another way to get startup funding is through a line of credit. You can get a line of credit from a local bank or RA Solar Technologie Investment who offers SBLC Monetization.
A line of credit is different from a loan in that you don’t receive a lump sum of money at once and begin repaying the balance at once. With a line of credit, you have access to a fixed amount of money that you can use as needed.
This makes a line of credit more similar to using a credit card than getting a traditional loan. Lenders determine your creditworthiness to decide whether to extend a line of credit to you.
Finding Startup Funding
The places you choose for startup funding will depend on how much money you need starting out. For example, if you’re running a business successfully out of your house, there’s no reason to immediately reach out to angel investors for millions of dollars in capital.
Slow growth is a better option to help you establish a system of operations for the money you already have. This will make it easier to manage outside money that can come with legal consequences if it’s mismanaged.
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