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When it comes to business, it is essential to get funds for growth and expansion. An eminent company can easily manage to get a loan from the bank and other financial institutions with the help of its goodwill and track record. On the other hand, a startup organization will really find it difficult to manage the required funding because of the little or no business history. You must have read several posts regarding how to manage funds for business. But here we would love to come up with something new and more essential, i.e., funding for a startup business. An age-old company can easily get loans, which become next to impossible for startup firms. The truth is that startup companies need more financial support in comparison to established Enterprises. Without further ado, let's find out what are the ways you can manage to get funds for your new startup company.
It's important to understand that as a startup it is not so easy to get funding opportunities. Personal creditworthiness helps a lot in this case. Lenders will take a look at your credit scores and credit reports to determine your creditworthiness.
It is not possible to manage your entire fund requirement from a single source. Moreover, as a business entity, it is necessary that you should prepare to be creative and flexible, although whether you are a startup company or looking for additional funding option for growth.
In fact, several small business owners and entrepreneurs piece their funding together from various places at different times. Funding from family and friends is no doubt a popular option to raise the initial funds for a startup. As per the 2012 Global entrepreneurship monitor report, a chunk of the startup funds, i.e., almost around 82% come from the personal sources of the entrepreneur.
Below we are going to discuss the five major and popular ways of getting quick funds for your startup company.
This is an easier and faster method of getting a loan in comparison to the traditional business loans. Generally, the amount which you can get on such a loan is under $50, 000. The sanctioned loan amount can be used for several purposes like purchasing equipment, supplies, inventory and working capital. The criteria for giving microloans differ a lot. Make sure that you go through the terms and conditions properly before taking the loan. There are several financial institutions available, shortlist the specific options and then go for the one which you think can provide you with the best option.
Personal business loan
When it comes to securing the traditional personal business loan, then it can be really a time consuming and hectic process, especially, when it comes to small business or startup companies. As per one of the recent studies, it has been found that around 34% of the small businesses get the tradition funding through the bank in comparison to the 75% of the large-scale enterprises.
A personal business loan is made in the personal account of the business owner after criticizing his creditworthiness. This fund upon approval can be used for financing your company. As compared to the traditional business loans available, this can take just a few days for approval.
Credit from vendors
This is known for being the top alternative to the small business loans and personal loans. Vendor credit is known for being the widest use of capital from one business to another. As per the Small Business Administration, this is the single largest source for small business lending in the US. As a startup enterprise, you can get access to the short-term financing from the vendors with the minimum criteria requirements.
This can be said as one of the valuable solutions that offer an enterprise with the required ability to buy products and services which it needs upfront while giving it the benefit of making payments on a later date.
Business credit cards
When it comes to funding, then the secured lines of credit can actually serve as a powerful tool in the form of business credit. It can help you to keep up with your business and personal expenses separate as well as develop your business credit file. At the same time, it provides access to credit and cash and provides flexible options for payment.
This is known for being the fastest way of casting a big net in order to attract business investors. There are a number of crowdfunding websites where you can participate. But make sure that you do your homework thoroughly. It demands a lot of preparation as well as planning for running a crowdfunding campaign successfully.
How can companies with huge market debt get back to its financial strength?
If a business gets into huge debt and every month the sum amount keeps on accumulating, then the immediate stand should be taking a debt consolidation loan. This huge number of outstanding debts in the market can be accumulated into a single loan with the help of a debt consolidation company. The interest rate can be agreed upon before starting with the consolidation process.
You should go through the debt consolidation top reviews to finalize the company you want to work with. Taking suggestions and references from the trusted sources is also an essential factor, which you should never ignore.
You can utilize one of the above options or even more than that to get the funding you require for your new business. Even if you may not need at the initial stage, still lack of fund is the major problem that is faced by most of the startup companies. You can use the above funding options whenever you need to expand your startup business. Funding is essential for any business, and it can be said as the fuel which runs a business successfully over the time. It is always better that you arrange for one or more funding options to your arsenal so that you can easily manage the capital when required for the business.