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3 possible ways to secure funding to start a business

| Jan 6, 2021 | Business Formation |

Starting a business requires a concept or product idea. It requires a lot of time and planning. It will also require financial investment, likely both from yourself and from others outside of the business.

Trying to raise capital to start a business can be a challenge. Still, money can be the main obstacle between taking a brilliant idea and turning it into a money-making and job-generating company. There are many ways for you to get the money you need when starting a new business.

Ask the people closest to you for support

Your parents probably intend to leave a significant portion of their resources to you when you die. Your closest friends want to see you succeed and may know from first-hand experience how committed you are to projects once you start them.

The people who know you and trust you will be more likely to take a risk on an idea if you ask them for support than a stranger who would have to be convinced of both of the value of your idea and your individual competency and trustworthiness. Asking for an inheritance early or calling in a favor could help you make your business idea a reality.

 You may be able to go to a bank for funding

Business loans can be an option for those who need a significant amount of capital up front and who don’t have personal connections capable of helping them get the idea for their company off the ground.

You will typically need more thorough information, including a professional business plan and sales projections to convince a bank or investment group to give you financing for a business idea. However, if something were to happen with the business, you would not have to worry about depleting the resources of the people you love. 

You can leverage your own financial resources

Some people cannot secure funding through personal connections or bank loans and must get a little more creative in their attempt to fund a business start-up. You can, theoretically, use funds from your personal savings or similar resources for early business development.

However, you must do so with care to avoid commingling finances in a way that could make you liable if the business fails in the future. Other options for securing financing could include crowd-funding online, angel investors and government grants.

Discussing your business model and plans in depth can help you explore which financing options might be best for your current situation.

 

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