If you need startup money for your business, then we have some groundbreaking ideas that will take you to the storm. If we specifically talk about America, millions of people try to start a business every year. Buying this isn’t as easy as it looks. It requires hard work, planning, and of course, the capital. According to the record of small business administration, around 234,000 businesses started in 2015. But many factors play a collective part in making it happen. Yes, the most crucial factor is an investment. If you don’t have savings, then starting your business will remain a dream. So, let’s dig for more ideas to get money for the startup.
How to acquire startup money for your new business?
If you are looking for startup money for the business, then you are not alone. There are more than 73% that are doing the same. However, there are the following ideas to get the money for your startup.
Take a start with bootstrapping:
If you aren’t aware of the term BOOTSTRAP, then it’s not that hard. However, with this term, we mean that you should try to finance your company with personal funds if you have any. For instance, personal funds include saving accounts, credit cards, and home equity loans. So, it’s always a better option than borrowing money. If we look at the record, most business owners try to bootstrap until the business becomes profitable. It is the most effective way that keeps you safe from loans and payments. But if you want to scale the business quickly, then you can go for the outer funds.
Venture capital and angel investment:
If you want to set up a large business, venture capital and angel investment are the best options. We know that each company is different and has its requirements, so you need a solid plan to get startup money in this condition. Large companies have other options and ways to attract investors. Mainly the SBIC investment come in three ways:
- The range of the SBIC loan ranges from $250,000-$10 million. But you have to pay it back with interest. The interest ratio is about 9%-16%.
- In the other option, the SBIC gives you a loan in the form of a share of ownership. However, in this case, the investment ranges between $100,000-5 million.
- The third option is the combination of the above two options, i.e., loans and equity. But in this condition, the interest ratio is between 10-14%. However, the loan amount is between $250,000-10 million.
How to get venture capital funding?
If you want to get venture capital startup funding, then here are the basic steps that you will have to adapt to get funds:
- Find the investor
- Share your business plan with them
- Go through all the documents
- Start working on the terms
- Get the investment
But it would help if you keep in mind that investment comes in rounds. If the company meets a milestone, then further rounds will be available.
Startup money: Bank loans:
Unfortunately, there isn’t a surety to get the bank loan as startup money. So, it would help if you make plans according to that. But if you have a good credit score, then you can get a loan. Moreover, if you have a pay stub that proves that you can repay the loan on time, always take the loans for business that you think will flourish in the future. On the other hand, you can apply for a loan in the bank in which you already have an account. In this case, your bank knows the account and your repaying history.
Many government offices help small businesses to get the loan. For instance, in the United States, the designated agents will provide consultation and training. Thus, these institutes have many grants, and they offer them to small businesses and entrepreneurs. Here are few examples:
- Women’s business centers advise on the local, state, and private loans specifically for women.
- There are some loans for minority-owned businesses.
- A business that is in an economically deprived area.
But you need to check the requirements before taking the final decision. It is vital to remember that you have to pay back the loan. So, make the decision wisely.
Apply in the corporate programs:
If you are not qualifying for the loan programs, then you can apply for the corporate programs. It is specially designed to support small businesses that are looking for low-interest financing. But it would help if you keep in mind that pay stub plays an important role when you want to check whether your business is in profit or not. In America, there is a Goldman Sachs program that gives affordable loans to the company.
Startup money: Conclusion:
If you want to apply for a loan, don’t forget to provide a detailed project description. Moreover, explain the benefits of your project because it will pave your road to get the loan. So, give a work plan with all details with the right approach and take a jumpstart. If you get startup money, then you are lucky among the million who got the chance to prove yourself.