When you choose to open a business on your own, you are eager to get started right away. However, something that might be holding you back – you don’t have sufficient startup capital, working capital and cash flow to take your business idea off the ground.
After reading this article, you should have some ideas on how to get the financing for your new venture and start to make the capital you require to grow.
So where should you start?
Funding from your supportive friends and families
The nearest funding source is right in front of your eyes – your supportive friends and family.
Occasionally, some entrepreneurs will get lucky and can get a short-term business loan from family or friends to help them kick-start their entrepreneurship.
Having said so, it pays to be extremely cautious when it comes to borrowing from friends or family as doing so may harm your relationships with them when you fail to repayments are not made.
Leverage on the government grants or schemes
Are there any government assistance schemes that you can leverage on to get your hands on the startup loan or working capital loan you require?
Take for example, in Singapore, and small companies can apply for SME Micro Loan that offers funding up to S$100,000 to help entrepreneurs manage their daily operations and cash flow.
Other financial assistance offered by federal governments includes SME Equipment and Factory Loan, Venture Loan and more.
Apart from loans, you should also look towards government support for training subsidies as well.
Venture capital firms can be your next best friends
Another concept is to seek out venture capital firms. Venture capital firms are financial organizations that pull together all partners’ resources and use these funds to help scale and expand brand-new businesses.
Credit cards, equity or personal loans
Credit cards can be a significant funding source you can consider. If you have high enough credit limit and the means to pay for it, utilizing your business or even your personal credit card can be a favorite financing source – and it has proven to work for many startups.
Though be extra cautious when using your personal credit cards for your business endeavor and make sure that you keep up with the minimum payments at least; otherwise, you might end up hurting your credit and its score.
Alternatively, you may want to check out your house equity. These kinds of loans typically called a second home mortgage, allows you to obtain money from the bank by using your house as a form of collateral.
Ever thought of angel investors?
Angel investors are typically retired executives or business owners, who are there to assist business owners in taking their first entrepreneurship journey. These angel investors can offer you the startup capital on top of what any funding you get from your other sources. These loans can start from $20,000 to two million, depending on your business plan and capability to scale, expand and make your business a successful one.