You’ve got an idea and you’ve got a plan. You know that your product or service could be successful. So what’s stopping you from getting started?
If you’re like the average person, the reason is probably money. With interest rates increasingly on the rise and job markets tenuous at best, it’s often daunting to think of jumping into a new business venture and even more daunting to think of how you’ll fund it. If your credit is less than stellar and big bank loans seem out of the question, try giving these creative ways to fund your startup a shot.
- Payday Loans – While payday loans often have high interest rates that prevent you from using them on a long-term basis, they are often much more lenient in terms of credit requirements. If you’re looking for a small amount to get you started, check out the quick loans offered by servicers like Wonga.com.
- Friends & Family – Maybe your pride stops you from asking for help when you need it, but if you’re confident in the product or service you’re going to sell, reach out to friends and family to get you started. You’d be surprised how willing people are to lend a hand when you’re in need and they’ll be more than grateful when you start raking in the dough and throw it back their way.
- Crowdsourcing – New websites like Kickstarter and CrowdSource allow you to put your business venture up for the public to fund, including friends and family. While most will contribute small amounts, you’ll likely see a few willing to pitch in a little extra and it will make all the difference. Your project will only be funded if the requested amount is raised in the time frame you choose, but you can increase the incentive by promising gifts or recognition depending on the amount donated.
- Vendor financing – If you’ve got the idea but lack the goods to create the product you’re going to sell, many manufacturers are willing to cut deals with you so that you’re not required to pay for your supplies until your products have sold. Be wary of this method, however, because if you’re unable to move your product you’ll be stuck with a hefty bill and no money to pay it back.
- Microloans – With a little bit of research, you’ll probably be able to find a company that offers microloans to people with less than stellar credit scores. Some companies, like Patriot Express and Small Office/Home Office, are willing to give out small loans to promote entrepreneurship and competition in the market. If you’re able to really sell your idea, companies like this are often able to help startups that don’t qualify for traditional big bank loans.
Of course the best way to fund a startup is to be able to pay out of pocket, saving you the stress of owing a loved one money or the hassle of high interest rates. If only we were all so lucky.