How to Get Startup Funding as a New Company
There are very many startup ideas you can take on and build a renowned company. There is so much that you need to do when starting a company but the main thing is to source for funding as nothing can run without capital. However, you will have to consult widely and come up with an approximate or accurate figure of how much funds you need, which will play a major role in determining your capital source. Here is a handy guide on how to get start-up funding as a new company.
Lenders are always on the front line ready to offer businesses with start-up loans to get things rolling. Most banks are skeptical about offering loans to start-up companies due to lack of security and if they agree to provide the financing, it often does not cover half the funding needs. The good thing is that there is a wide range of lenders who provide cash loans with some form of security, often personal guarantee. This is one of the reliable ways to get funding as a new company but be sure to honor the payment agreement.
Asset financing is a relatively cheaper way to borrow to fund your new company as the equipment you get provides security for the loan. Some equipment, depending on the services you offer, are too expensive to purchase even after securing a business loan. Loan companies are usually more than willing to provide asset financing since they have a sure security for the loan. This is a great alternative finance source for your new company.
If you are planning on going big from the word go, then it is wise to solicit investors to fund your new company. Investors can be generous, especially if they see a big opportunity, which means you need to work on all aspects of your new company to make it desirable and with a potential of huge returns. Come up with a warm introduction to pitch to potential investors out there
The cost of starting a new company is relatively low, which means you can fund the company yourself if you have the means. The majority of startups are self-funded. This will need you to save money, which might take longer depending on the amount needed to fund the new company, but the good thing with self-funding is that you do not have to give up equity to investors or equipment as loan security. The company remains yours and the profits you make do not service any loans.
Friends and family
You might want to consider getting a boost from friends and family if you do not want to take up any of the above-mentioned options, or you do not qualify for a startup business loan. Your circle of friends or close family could be willing to fund your new company since they believe in you or see potential in your startup idea. This could be a good alternative finance source in the early stages of starting the company where not so much funds are needed. If your friends and family believe in your new company, it is a good sign that investors and asset financiers could also want to jump in and fund your new venture.
Business credit card
If you have a good credit history and score, then you can leverage it and use it to get business credit to fund your new company. You do not need months or years to get a business card but only a credit score between good and excellent.
Funding a new company has become quite easy, and all you need is to consider any of these options, or several of them if need be depending on the amount needed.