Five Funding Sources That Can Finance Your Startup
You can succeed at starting your own business if you have an entrepreneurial spirit, intellect and motivation, but you will also need money. The start-up funding is where most people get thrown off their courses. Fortunately, you can obtain funding for your startup from the following sources.
1. Community Banks
Many banks offer small business loans for individuals that can show them why their idea works. Your credit score may have to be in the high range to obtain an approval for a loan from your community bank, however.
2. Peer-to-Peer Lending
Peer-to-peer lending is a system that allows you to ask investors and other people in the world-wide community to fund your project. Examples of P2P sites are Prosper.com and Zopa.com. You can create a profile and then launch your campaign. You have to repay the advance.
3. Crowdfunding
Crowdfunding could work a little bit better for you than peer-to-peer lending could. Crowdfunding is similar to P2P, except you can offer your investors a reward for backing your project. The odds are better of you receiving an approval for crowdfunding than they are for you receiving an approval for P2P lending. You have a 50 percent chance of receiving a positive answer.
4. Venture Capital
Venture Capital is money that you can receive from investors in exchange for certain rights to your company. In other words, the investors would have a say in the happenings of your business because they funded you. You have to be able to show the investors how your idea will grow. You have to have a business plan and a formal pitch.
5. Title Loans
Title loans are a last resort. They are an unconventional way to get quick cash if you need it for your business. This method only works if you own a new car. The lender will provide you with funds based on the value of your vehicle. You can receive the funds the same day you contact the company, and your credit does not have to be superb. The downside is that you may have to pay the advance back in 30 days.
You can try any of the above-stated ideas and perhaps one of these organizations will bless you with what you need. Just remember who helped you to get your business started, and give back to any community that supported you.
Chris Burch is venture capitalist and founder of Burch Creative Capital.
