The amount of money that it takes to finance the startup costs of a business is jaw dropping. It can depreciate your budget overnight and unless you have access to financing options, it’s going to put you in considerable debt. Small businesses have to use new, cool ways to finance their startup or they won’t be able to survive in today’s competitive economy.
1 – Integrate consultancy services
If your product or service takes a considerable investment in order to get going, why not integrate consultancy services into your offerings? Being a consultant is cost free. It takes very little investment to offer this to your customers and consultants have enormous value. If you are in an industry where consulting services are greatly needed, there is a lot of profit that could be made. You could use this revenue to finance your startup. This allows you to get going with your business, without having to commit to a loan and put yourself in debt.
2 – Find an investor
Getting an investor to finance your startup is a great idea. There are investors that spend their days located innovative startups that they think are worth their investment. If you can find someone that is interested in your product, you can turn them into your own personal cash cow. However, some investors will be looking to own a percentage of your business in exchange for their finances, so it’s a trade that you have to be willing to make.
3 – Peer lending
Peer-to-peer lending is a very cool service that has originated entirely online. It allows you individuals to lend cash to one another, completely eliminating the need for a bank. This cuts out the middle man and provides you with access to startup funds at a low interest rate. Peer-to-peer lending sites are innovative opportunities to get the cash you need from a helping hand across the world.
4 – Home equity
A home is an investment and if you have been making mortgage payments for a considerable period of time, you probably have built equity on your home. You can use your home’s equity for startup funds for your business. Some ways to do this are to sell your home and then purchase a smaller and more affordable home, find a company that can give you a loan with the equity on your home used as collateral, or refinance so that your monthly payments will be more affordable for you.
5 – Credit cards or bank loans
While this may seem like a no-brainer, it’s something that a lot of businesses overlook. Credit cards have high interest rates, but they sometimes have high credit limits as well. Some credit cards have limits as high as $30,000. This gives your business access to immediate cash so that you can get going and pay off the debt as your company makes a profit. Bank loans are promising alternative as well. Bank loans have flexible terms and they have become even more popular now that payday loans and short-term loans are becoming less desirable because of their increasing interest rates.
Stevie Clapton is passionate on everything and anything financial and frugal, you can find him providing him advisable articles all across the financial community.
Image Credit: Shutterstock.comSubscribe to the Podcast