Business Challenges and Success
When it comes to the success of your startup business, funding plays a very important role.
Do you have enough funding? How much funding do you need? Where do you get funding?
Well, here are 5 tricks to getting your business funded:
GROW YOUR BUSINESS WITH GRANTS & LOANS
Learn about the funding available for your small business. It just takes a second!
Trick #1: Funding From Family and Friends
Even though in business it is often not recommended to borrow from family and friends due to issues that may come up, it is still one trick that you can use to get some funding for your new or existing small business.
Keep in mind that when borrowing from family and friends, the trick is to try and split it into smaller amounts so you are not borrowing the full amount from one or two people.
Let’s say you need $5,000 to start up. Not many friends or family members may have that amount to give you. However, 10 family members or friends may have $500 to give you, which most of the time is not even seen as an investment and should not require a contract to be written up.
Trick #2: Funding From Credit Cards, Savings Accounts, and Banks
A second trick to get funding for your small business startup is to use your personal savings, credit cards, or lines of credit. If you do not have these, visiting a bank and setting one up would be the best option if you choose this route. Remember that a good credit score may be required.
If this is the route you take, consider credit cards that have the lowest interest rate as well as those that offer rewards, so you get something out of it as well.
Be sure to pay what you borrow on time to avoid interest charges and fees.
Trick #3: Funding From Business Partners
If you have a business partner or multiple partners, you can repeat Trick #1 and Trick #2 for each partner.
If you do not have any partners, you may consider seeking one or finding a potential investor who is willing to be a silent partner and lend the money. Keep in mind that some sort of arrangement may be needed, such as an equity share in the business.
Trick #4: Funding From the Government
Government grants, loans, tax breaks, and assistance are available. In fact, there are hundreds of different programs for startup and existing business owners in Canada. To take advantage of this, the first step is to find a source such as the Funding Database offered by CanadaStartups.org, search through programs, and apply.
The same rules may apply, such as needing good credit and breaking up how much you need across multiple sources.
Trick #5: Funding by Crowdfunding
If applying for funding is not an option for you, consider the power of the web and social media through crowdfunding.
Crowdfunding is a method of getting your business funded by a number of people who contribute small amounts, often $100 or less, sometimes more, in return for a reward.
Many startups offer rewards such as free trials, being the first customer to try out the product or service, and promotional materials.
If you are comfortable on the web, setting up a crowdfunding campaign is simple. Be sure to try it out.
Those are 5 tricks to get your small business funded, and now it is up to you to go out there and get that money.