Do you have a great idea for a company that you know will translate to big profits?
You want to get started on building your business right away. The only problem? It takes money to make money.
That means you have to go out and find some capital.
No one likes to ask for money, but it’s a necessary evil if you want to fund a startup. Don’t let a lack of funds get in the way of you starting the company of your dreams.
Starting a business—big or small—requires finances and resources. Learn how to get capital for business with these five smart ways to fund a startup.
1. Angel Investors
Angel investors are wealthy individuals that privately invest in small businesses. As opposed to venture capitalists, angel investors don’t seek to have control over the company.
Nabbing an angel investor is a big get. Sometimes they will also offer advice and business mentorship. The only obstacle is that you have to attract one that believes in your business.
People often find angel investors through word of mouth. Don’t be afraid to let friends and family know you’re looking for someone. There are also websites that can help match you with someone.
Crowdfunding is a great option for someone who has a product that people would be interested in buying. If it’s really innovative, your crowdfunding campaign might go viral, which gets you capital and free marketing.
You can also use crowdfunding as a way to attract additional investors. If you fulfill or exceed your goal, that shows venture capitalists that there’s already a lot of interest in your company.
Loans are one of the most common ways people find capital for their business. There are all types of loans out there, so do your research to find out which is right for you.
One type of loan is a hard money loan. These loans come from private investors as opposed to a bank.
There’s also micro-loans and a Small Business Association (SBA) loan. An SBA loan gives you a lot of breaks on fees and interest. They’re great if you can secure one, but be aware that it’s a lengthy and competitive application process.
4. Get a Partner
Finding a business partner who can invest their own capital into the business is another option. Usually, they would own a percentage of the startup. Some partners might be very hands-on or they might prefer to be a silent partner.
It can be helpful to have a partner in your business, especially if you don’t have a lot of experience. However, this might not be for you if you don’t want anyone else having a say in how the company is run.
How to Get Capital for Business: The Takeaway
Now that you know how to get capital for business, you can take the next steps towards owning your own company. It won’t be easy, but with a lot of hard work you’ll be making back that money in no time.
Did you enjoy this article and want to learn more about making money? Then check out these 3 strategies for building wealth.