Our present generation entrepreneurs have plenty of ideas for startups, but then capital arises as an issue in the takeoff process. Getting the bank loans is not possible for all startups as there are many formalities and requirements involved in it. Many small business administrations can be approached but even here the competition is increasing. So the question for a person trying to start up a business is ‘how to fund your business?’
This article is about the six alternatives which can help you raise capital:
1. Online Lending Companies
The alternate for the business loans with a high rate of interest are the online lenders. The best thing about these online lending companies is the ease of application for the loan. It hardly takes few hours to fill the application form, and your loan can be passed in a couple of days too. Because of the easy application process, a hassle free and quick achievement of the funds, online lending has been increasing every day and even the former U.S. Treasury Secretary Larry Summers has said that the number will be increasing by 70% in the near future.
2. Angel Investors
The angel investors are known to invest in all startups. They take about 20 to 25 percent of the amount they have invested in your business. Giants like Costco and Google have also risen with the help of the angel investors. It is a very good opportunity for all startups.
3. Venture Capital
Venture capital helps the new startups which can show high growth and also involve a high risk. With this kind of funding, a startup can get a high amount. Through such investors, you can raise millions of dollar which can hep the company grows really fast. The companies doing such kind of investments also guide the entrepreneurs and tell them the success rate of their service or product. The investment has to be paid back in a time period of three to five years.
4. Invoice or Factoring Advances
This process is very helpful for a startup who has been working for customers already. The funds are provided in advance to these startups on the basis of the outstanding invoice of the customers. The amount is paid back when the customer pays back the money. This helps the startups as the important work and operations do not come to a halt.
5. Crowd funding
There are many sites which help the startups get crowd funding. Crowd funding is done by various investors who can pool in small investments. The sites who do crowd funding contact these people who are willing to make small investments and create a good amount for a startup. This is helpful for you if you are not getting an investor who can raise a huge capital. Before opting for this option you must read the terms and conditions of different investors on the crowd funding website.
The government provides funds to the different businesses which are focusing on a startup related to science or some research. The grants are offered by SBA with the help of Small Business Innovation Research or the SBIR and Small Business Technology Transfer (STTR) programs. If you are looking for grants like these from aided by the government, your business must have a high potential for the commercialization and be able to meet the standards of the federal research-and-development.
Getting loans from the bank might need a number of formalities to be fulfilled and the business loans also charge a monthly return on the amount of the loan. These tips should be helpful on how to fund your business. With Midwest Corporate Credit you can get help as we connect you to a large network of authorized lenders from all across the America and which will be able to match your requirements. We filter the client base as per the previous approval patterns and give you hassle free credit approval. Visit http://www.midwestcorporatecredit.com to know more about the products and services. You can also call us at (844) 220-8826 to speak to our financial consultant and get a perfect solution to how to fund your business in no time.