3 Ways to Find the Necessary Funds to Start Your New Business
So, you’ve decided to start a business. Congratulations! You’ve got a great idea and a plan, but now comes the hard part: finding the funds to turn your idea into a viable business. Fortunately, there are lots of ways to obtain the funds you need to get your business off the ground — and also quite fortunate, starting a business on the internet is actually much more cost-effective than if you were to start an offline / franchise type of business.
Before jumping into a few different ways you can gain access to money to fund your project or business idea, let’s first list some of the cost considerations you should have in mind when starting a new business.
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- Domain, website, hosting and design
- Paying staff and employees
- Company registration (Inc, LLC)
- Office supplies, desks, computers
- Legal counsel, outside consulting services
- Insurance for yourself and employees
- Rental, mortgages and franchising fees
- Equipment, inventory, and products
As you can see, before we even get started with the investment and funding options available, there are already plenty of things you will need to map out and consider when starting a new business. As exciting as it is to go live with your new site or business, the more time you spend on the foundation and pre-planning process, the less headaches and more success you will potentially have in the future.
Once all of this is in place, you can then start exploring your options with the following business funding and investment options.
Of course, the easiest and most straightforward way to finance your business is to pony up the cash yourself, making this an attractive option for many people. However, even if you can afford to go this route, there’s one big caveat that needs to thrown up: If your business flops, you are on the hook for all of the funds you have invested into it.
If you do want to go this route, there are several ways you can do it. First, you could simply tap into your “rainy day” fund for the start-up capital you’ll need. This could be in the form of your savings account, inherited funds, etc. One of the biggest advantages of investing your own money in your business is that it sends a powerful message to future investors that you are fully committed to your venture. Investors may be more likely to invest in your company if they see that you have something on the line, too.
You can also liquidate some assets to pay for the start-up of your business. If you have real estate, stocks or bonds, or something else of value that you can (and are willing to) part with, this can be a quick way to get the funds you need for your business. Remember, however, that there can be some consequences of liquidation some assets, such as real estate, in terms of taxes.
If your credit limit allows, you could also use your credit card to finance your business start up. This is a convenient way to order supplies, for example — while also allowing for the opportunity to rack up a bunch of rewards or bonus cash in the process. However, always be aware that because credit cards carry with them hefty interest rates, so your purchases could end up costing you much more than it would originally seem.
A home equity loan is another possibility for personally financing your business. If you own a home, you can borrow against the equity in it in the form of a line of credit. However, there are some restrictions that may make this a less-than-desirable option for some people.
Taking out a loan
If personally financing your business start-up endeavor isn’t the best option for you, there are other things you can do. If you don’t own a home, for example, you can approach a bank or another type of lender for a personal loan. Personal loans from banks typically come with lower interest rates than do credit cards. If your credit is quite low, you may struggle to find a bank willing to lend you money. In those cases, it may be best to go to an alternative type of lender for a personal loan. Click to find out more about your borrowing options if you find yourself in that scenario.
Finally, you can always borrow money from family or friends if none of these other options are viable for you. People who know and trust you may be able to help you out, and you can repay the loan when your business starts bringing in money.
Paypal Working Capital
For anyone that already have a business online and might be simply looking for money to put back into their company, there are many ways to borrow money from banks and lenders, but these often come with a lot of verification, history reports, and high interest rates. Paypal has not only changed the way customers and business make financial transactions in the world today, they’ve also changed how businesses can borrow and access lump sums of money as well.
Through the use of Paypal Working Capital, Paypal customers can borrow up to $100,000, while not having to go through a credit history check in the process. The decision on how much money can be borrowed and by whom, ultimately comes down to the account history and how much volume is currently being pushed through the account. What also makes PPYC unique is that the borrow money is paid back through the use of incoming payments to the account, and you get to select how fast the loan is paid back (usually in 15%, 20% or 30% increments). There is also a flat percentage fee that is owed on each borrow amount as well.
Money is Simply Waiting There for You
These are just a few of the ways that you can find the money necessary to start your business. There are lots of others, depending on your current financial situation and business goals, but these are some of the quickest and most convenient ways to get the cash flow you need to get your business off the ground.
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