Ways to Fund Your Startup Business

Funding is almost always a sticking point when you get a new business idea. You may have a compelling business plan, but may have no clue about how to raise the funds to turn it into reality. Hopefully your wife does not bash your idea like Lynette Scavo did to her husband in the vain and preposterous show Desperate Housewives.

Like it or not, funding and liquidity is everything in the world of startups. Fortunately, there are many potential ways to fund a promising startup business, other than just funding out of profits

1. Borrow from Your Loved Ones

Money tends to sour relations–you can see this in the average comedy Envy. However, borrowing from your friends and family is one of the best ways to get access to cheap money. It will also be easier to convince your loved ones about your dreams as compared to an investor or a banker.

Make sure that everyone you deal with gets sound legal advice. It is best to keep things formal to protect your relationships down the line. Draw up formal loan contracts if you are paying interest on the money borrowed.

2. Trade Your Services

This approach to a startup is rampant in the technical field. If you are looking to get some web designing done, then see if your neighbor or that social media friend who does freelancing on the side, is interested.

You can help them with marketing advice or anything else you are good at, down the road. There are communities of fledgling business owners working together in every city. The down side to this is that not everyone will be interested in bartering services, which means you could get substandard work.

3. Consider a Car Title Loan

If you own your car outright, then this is the best option for you. Car title loans are perfect for startup funding because there is no limit on the loan amount and these are for very short periods. You will not accrue as much interest if you pay off the loan within a month.

Lenders do not conduct credit checks which makes it easy if you have a bad credit score. However, car title loans are state regulated. Make sure you know all the rules regarding title loans in your state before applying.

4. Try Small Business Loans

There are many banks that offer small business loans to fund a startup. In addition, banks are traditionally cautious in their approval process and very picky when it comes to funding borrowers. This can make it difficult to qualify.Find out more about small business loans here

5. Find Private Lenders

There are so many private lenders in the world, willing to invest in startups, that you are actually spoiled for choice. With a private lender you do not have to get involved in a government startup scheme and can avoid the guilt that comes with borrowing from friends and family.

Make sure you do your research especially if you are dealing with an online private lender. All lenders are not created equal which makes it important to do a background check. You do not want to raise funds, only to find the lender acting as an obstacle in the application of it.

Conclusion

Try not to quit your day job until your startup idea translates into actual business and the chances of this of occurring have increased because of the horrendous Dodd/Frank bill is finally being curtailed. Furthermore, some people quit their jobs to focus on their dreams without realizing that the income from a job can be used towards a portion of the startup fund.

Not too smart!