Startups have made a big name for themselves in the past decade, with giants like Google and Uber continuing to dominate the marketplace. How you fund your business can play a major part in the future success of your enterprise.
Choosing the right financing option for your business will help you to plan and achieve your long and short-term goals. Before you get started, keep these financing tips in mind:
1. Credit Cards
It might seem like a dangerous financial plan, but credit cards can actually be a useful and cost-effective way to start a business.
Many cards come with additional benefits, such as 0% intro APR and cash-back rewards.
Choosing a card that comes with benefits you would have to pay for anyway, like business-related travel expenses and meals, can also help you to save in the long run.
It is also possible to take advantage of these perks without paying exorbitant interest fees. Even if you don’t pay off your full balance during the grace period, creating a detailed plan with help you predict how much you’ll owe over your repayment period.
Eliminating your balance as soon as possible is the best way to use credit cards as financing. This option is best for covering costs that you plan on paying off in a short amount of time.
2. Organic Income / Moonlighting
If you want to forgo borrowing altogether, you can still get your business off the ground. Generating supplemental income is another tried-and-true way to finance your start-up venture.
Depending on your schedule and current commitments, you could take a variety of different part-time jobs to fill the gaps.
Popular side hustles include:
- Web development
- Virtual admin support
- Graphic design
- Freelance writing
3. Auto Title Loans
Do you own a vehicle that’s in decent condition? You could be sitting on a nice chunk of cash, and you don’t even have to give up the use of your car.
Rather than selling your vehicle, get an auto title loan quote. Your interest rate, loan amount, and repayment terms depend on the value of your vehicle as well as your income and credit score.
While having a favorable credit score can help you to secure a lower interest rate, this is still a popular choice for borrowers with lower scores.
If you need money quickly and you don’t want to pay high bank fees, consider taking out a car title loan.
4. Payday Advances
This is typically not the first financing choice for most will-be startups, but payday advance loans can be a valuable funding tool if used responsibly.
Payday advance loans are usually high-interest, extremely short-term loans that are based almost exclusively on the applicant’s income.
The best aspect of payday loans is the speed, as you can leave with loans of up to a few thousand dollars the day you apply.
If you have expenses that need to be reconciled immediately, but you know you’ll be able to pay the balance off quickly, payday advance loans might be a good option for you.
5. Personal Contacts
The oldest, but least conventional, financing method is relying on personal resources. Friends and family could be an invaluable resource for budding businesses.
This is another popular choice for people who want to avoid debt at all costs. Reaching out to personal contacts via direct communication, fundraising outreach, or even crowdfunding websites are all ways to collect the amount you need.
If you cast a wide net and target people who support your company’s vision, you can earn a substantial sum in a short amount of time.
For most new business owners, financing is one of the biggest hurdles. Rather than running to the nearest bank, consider these alternative financing options instead.