3 Funding Options When Starting Your Business

Do you dream of starting your own business?

Are you convinced you have the next big idea, one the market is just dying for?

If you’re like a lot of people with an entrepreneurial spirit, the only reason you haven’t already acted on it is because you lack the necessary funding.

As the old saying goes, “It takes money to make money.”

3 Proven Ways to Fund Your New Business

What that oft-quoted advice fails to clarify is that just because it takes money doesn’t mean you have to be the one to supply it.

So if you want to start your own business, but don’t have the startup capital, consider these three alternatives.

1. Personal Loans

The most obvious solution for funding your own business is to simply take out a personal loan.

Many people mistakenly think that business loans are the ideal approach, but it’s much harder to qualify for one. You also need to provide collateral and a polished business plan.

As long as you don’t need a large sum, a personal loan will not only prove just as effective, but you can also secure a personal loan without any collateral and get the money you need much quicker.

In fact, depending on the venture you have in mind, a personal loan may be the only type of funding traditional lenders will consider.

2. Credit Cards

You can also fund your business with a credit card.

This option actually works a lot like a personal loan.

Depending on your credit limit, the amount you’ll have access to is probably similar to how much you could take out with a personal loan. You also won’t need any collateral and you can spend the amount on whatever you want.

Another similarity is that you should shop around before using one to fund your business. Don’t necessarily opt for the one you already have.

Aside from locking in the best possible rates, you may also want to choose a card based on the rewards it offers (e.g. travel vs. cash back).

3. Outside Investors

Finally, you can always fund your business with outside investors.

The biggest advantage to this option is that you could secure a much larger sum than both of the other two combined.

However, investors don’t lend that money for free. Instead of simply paying them back with interest, they may want interest in your company.

Consider all the consequences of taking on an investor before you do so. There is certainly no lack of success stories that involve investors. They can even provide far more than money by way of leveraging their experience, but you should still think this decision through before making it.

You Don’t Really Lack Funding

If you’ve been putting off starting your own business because you were convinced you didn’t have the money needed to fund such a venture, you now have three proven methods.

There should no longer be any reason to put off becoming a business owner any longer.

Use one of the three options above to fund your company. You can always use two or even all three if it becomes necessary.

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