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Many business ideas need a bit of funding to help get them off the ground whether it’s for equipment, licensing or marketing. Here are several ways that you can raise money for your startup.
Saving up money is the slowest way of raising funds for your business, but it could prevent you paying interest or having to offer shares of your business like other forms of fundraising. It could be worth setting up a business savings account at your local bank. These bank accounts can collect a lot of interest over time, but there may be conditions as to how much you can raise or how much you need to put into an account each month. You don’t have to use a bank savings account and could use a trust fund or another form of investment.
Take out a loan
Another option is to borrow the money in the form of a loan. Several banks may offer specialist business loans – these may be low interest but may require you to have a clean credit score. Such loans can sometimes take several months to process, which could be another disadvantage. You can get fast cash loans online – these may not require you to have as clean a credit score, but may have higher interest rates as a result. Always shop around for loans to find the best deal for you.
Use a business credit card
If you only need to borrow a small amount of money, it could be worth taking out a business credit card. Some cards may have no interest charge for the first few months. It’s certainly the quickest way of borrowing money, but you may not be able to spend too much on your card – many cards are capped and may have additional charges if you get into too much debt.
Another option of funding your business could be to ask investors to contribute money in return for giving them a share of your profits. In order to persuade investors to give you money, you need to prove that your company has the ability to be successful, which may involve making a pitch. There are investment companies that specialise in funding startups – they might be able to offer you the money you need. Alternatively you may prefer to target individual investors such as local business owners.
Crowdfunding involves raising money from multiple investors. In exchange for investing, each person is rewarded in a certain way, either by receiving a freebie or a share in the company equal to the amount of money they put in. There are lots of sites that allow you to start a crowdfunding campaign. It’s also possible to take out loans through crowdfunding – multiple people offer you money and you pay back the money to each of them with interest attached. Peer-to-peer lending sites often allow this form of crowdfunding.