5 Sources of Start-Up Money for Your Business

5 Sources of Start-Up Money for Your BusinessOne of the biggest challenges that every start-up business owner needs to address is where to get the funds to actually start the business. If you lack in start-up money to get your killer business idea moving, then here are some great sources of business start-up money:

1) Your pockets

Sure, coming up with your own start-up money may seem like a long shot at first—but it’s very possible with a little commitment and discipline. Many go-getters sell property or possessions, or even mortgage their homes in order to come up with the money they need. If you aren’t comfortable with taking such a big risk, then regularly set aside a portion of your paycheck until you have saved up enough money.

2) Friends and family

Family and friends are the second most common source of start-up money. Talk to your circle of friends and relatives and see if anyone is interesting in investing in your idea. Sometimes, your loved ones are willing to provide you with a start-up loan. Other times, they are willing to give you the money as a gift. Be careful, however, that personal relationships are not ruined or compromised in the process.

3) Credit

Although it isn’t recommended as a sole source of start-up money for a business, a credit line is fundamental for a start up phase. You can pay for certain items or get cash advances with your personal credit cards. You can also opt to open a credit line with your bank and use this to fund your business venture. Before using credit as a source of start-up money, however, it is essential that you first establish a good relationship with your bank manager and ensure that you have a good credit rating.

4) Online

While the Internet may not seem like an obvious source of business start-up money, it is definitely an option to be considered. A number of reputable small-business financing alternatives have popped up on the web. On Deck Capital, for example, is an online lender that doesn’t focus on your credit score or tax returns but on your cash flow instead. This site collects small amounts on a daily basis instead of large installments on a monthly basis.

5) Peer-to-peer loans

A peer-to-peer loan, also known as a social loan, is generally a personal loan that can be used for practically any purpose—including business purposes. Individuals with disposable income facilitate this type of loan. It is unsecured and has one of the lowest interest rates in the entire market. It is a great options for borrowers who may not qualify for bank loans and loans from other financial institutions.

Photo Credit: iClipart

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