According to the study conducted in the United States, there are over 600, 000 startup businesses created every year. The question is where are all these businesses? Are they still thriving? The answer is definitely No! Most of these businesses folded up as soon as they were unleashed because of one major factor; lack of capital.
In this article, you will discover the various ways in which you can get funding for your startup business so as to avoid folding up your business. So, keep reading.
Sources of Startup Business Funding
To attain your dream of an established business, you must be unconditionally committed especially after you get your startup business funding. Let’s have a look at some of the common sources of capital that you can turn into:
- Personal Investments and Savings
A report by Small Business Administration released in 2016 showed that 57% of entrepreneurs who are looking for startup business loans with credit cards, usually use their personal savings to get them started. This should tell you that you are the first investor in your business. There is no range of funding.
- Friends and Family
This is will be a great deal because of its flexibility and speed. Although they are your friends and relatives, you need to have an organized business plan to build confidence in them. Besides, come up with a signed agreement document indicating when you will repay them. The common funding of friends ranges between $5,000 and $500,000.
- Business Credit Cards
If you are looking for a startup business funding that has low-interest rates, fast, and flexible outside your family and friends, then you got business credit cards. Within 5 days, you can get your money without restrictions on how to use it.
Your funding can increase within a short time as long as you have a great payment history and you are constantly using the credit cards. The funding may range between $5,000 and $150,000 but this is doomed to grow as you use the cards.
- SBA Startup Loans
It has low-interest rates but it takes a very long time for it to be processed between 3 and 6 months. It has strict requirements and you can only use the money as required. You will be required to contribute up to 30% of the capital required. You can get between $25,000 and $350,000.
- A Donor
If you can be lucky to have a donor or sponsor to fund your business, you are made. You will enjoy flexibility in your usage of the high amounts they give. Nevertheless, you need to be patient since it can take as long as one year. They just want to see your operations record in the last 6 months. It ranges between $50,000 and millions of dollars.
It is becoming popular daily because of the flexibility of using the loan as long as it complies with what you advertised in your campaigns. It takes between 1 and 3 months for it to be processed. You can get in between $5,000 and $500,000. Nevertheless, you will need some compelling and attracting marketing materials.
- Equipment Financing
With this loan, you have to use the money to buy the equipment so it has no flexibility. You can get funding of between $5,000 and $150,000 within 30 to 90 days. You must have been in operation for the past 6 months.
Now you have an understanding of where to get your startup business funding from.