One of the most common challenges of entrepreneurs when starting a business is finding enough budget.
Whether you are looking for funds for your start-up or expanding business, securing the money may be tough. But regardless of the economic climate, there are many financing options out there to assist you. You just have to think and be creative in choosing the perfect financing entity that would bring your business plan to fruition.
Below are 5 ways to access quick and short-term funds.
1. Apply for a loan
Majority of start-up businesses get funding from quick loans. Applying for a loan is one of the traditional means of securing a budget, and it’s been a widely accepted option for a good reason.
If you think that the strict lending standards of banks make it a non-viable option for your current financial status, you still have several places to go to for a loan. You can try getting quick loans from nonprofit microlenders and online lenders where the rates are flexible and tailored to your credit standing.
The number of lenders in the market are growing each day, so you’ll have plenty of options. Just make sure to determine which companies are the best when it comes to small-business lending and if you meet their criteria.
2. Go for crowdfunding
Crowdfunding is a modern way to obtain financing for your business venture.
The most widely known fundraising platforms are GoFundMe, Indiegogo and Kickstarter, to name a few. Although they have varying donor guarantee and withdrawal policies, their common goal is to raise small amounts of money from a large number of people through the power of the internet.
The good thing about crowdfunding is you don’t need to meet special qualifications to initiate fundraising. Just keep in mind that to reach your target budget, you need to create massive campaigns on social media to reach as many potential donors as possible.
3. Seek for an angel investor
An angel investor, sometimes referred to as a business angel (BA), is a well-heeled individual who provides capital for start-up companies. Depending on your agreement, they will seek shared ownership in exchange for their sponsorship.
Angel investors will not require you to present collateral, and you’ll gain access to their mentoring and management skills. Getting the right angel investor for your business might require a lot of hard work, but you will immediately realise their steady and positive impact to your company once you’ve found one.
4. Consider a venture capitalist
Contrary to business angels (BAs), venture capitalists (VCs) usually prefer to lean their focus towards established companies with more complex plans.
To satisfy their requirements, you must explain to them what you do, your capabilities and experiences, and your innovation and what good opportunity awaits it. Once you have laid out your pitch and successfully raised the funds, expect your VC to bring additional valuable information, resources and expertise to your company.
5. Reach out to family and friends
Acquiring funds through your personal network might appear convenient, but it is actually a tricky one. First things first – there should be mutual trust and agreement regarding the repayment plan. Moreover, they should have a strong belief in your cause and have a clear picture of the business direction.
Just because they are the nearest and easiest persons to tap for your business plan doesn’t mean that they could give you what you need. Still, you have to make sure that you are asking the right individual.
Regardless of the funding option you choose, make sure that the terms and conditions are in line with your goal for your enterprise. Do not jump onto the first entity that offers funds just because you’re eager to start your business. Seek advice to the people who have been in the same situation, and weigh all the options first before inking a deal.