Sun. Sep 27th, 2020
Finance Options for Your Startup

You have a great idea, you have a master plan, you are ready to go with your new startup. All that is missing is the cash. Every startup, no matter how big or small needs money to get it off the ground. Luckily, there are a few great options to help you finance your start up and one (or more!) is bound to be perfect for you.

1.      SBA Microloans

The United States offers many kinds of small business loans and now, you can even get a microloan in any amount from $500 to $50,000 to help with your startup. After applying for a Small Business Administration (SBA) loan, the SBA will match you with a local microlender who can work with you from then on. While the loan is subsidized through the government, your loan will be given to you through a local lender. The benefit here is that you will have a person in your area to work with you and make sure you stick to the SBA loan terms. Be aware that SBA microloans can take a while to be reviewed and approved so you may be waiting a while on your cash.

2.      Personal Loans

Rather than go through the SBA, you can get personal loans to help finance your startup. If you have good credit and a strong financial background, you should be able to easily get a loan. Even if you do not have a stellar credit history, many lenders will still give you a small loan that could be all you really need. You can get a personal loan through a local bank or credit union or online. These loans are approved based solely on you personally and do not rely on your business at all. In addition, you can spend the cash as you please, either on startup expenses or to just pay your rent while you begin your new company.

3.      Friends and Family

If you do not want to rely on your personal credit or your business credit, you may want to ask friends and family for help with funding. People you know may be eager to invest in you and your business especially when they believe in your idea. It is a good idea to make the transactions more formal, setting up payback terms that you both agree to. This will prevent personal issues later on.

4.      Business Credit Cards

If your startup is already registered and official business, you should be able to get a credit card for your business. Look for a card that offers zero percent APR for the first year, which would allow you to use your card to get your startup running without paying any interest. Just keep in mind that you will have to make monthly payments right away!

5.      Crowdfunding

Crowdfunding has become a great way to get cash for your startup from people who believe in your vision. Find a crowdfunding site where you can post the information about your business and set the amount of cash you are looking to raise. With crowdfunding, you will not have to pay anyone back but you will need to offer the people backing you some kind of incentive. In addition to being a good way to raise funds, crowdfunding is also fantastic advertising.

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