Nobody ever said that being an entrepreneur would be an easy task – it is probably tougher to be an entrepreneur (at the start) than to work a 9-to-5 job. One of the things that make it hard to be an entrepreneur is the money matters that arise over the course of starting and running a business. This piece provides insight into 10 creative ways for raising funds for a business.
Squeeze more money of yourself
If you need more funding for your business, you should start by finding ways to squeeze money out of yourself before looking for loans from external sources.
- Don’t fire your boss yet: You can alleviate some of the cash problems ailing your business by keeping your current job. Keeping your current job will provide you with a steady source of income while you continue to work on your business
- Get another job: if the income from your current job is not enough to raise your startup capital, you should consider taking on a second job. You can take on a part-time second job or start looking for ways to make money with your skills as a freelancer
- Downsize personal expenses: You can free up more money for your business by finding ways to reduce your expenses. Perhaps it is time you learnt how to cook instead of eating out. You can also clip coupons and watch movies on Netflix.
- Sell off some personal assets: If you have gadgets, a second car, or other valuables, you should consider selling them to raise more money for your business.
Approach loans from a unique perspective
Sometimes, the odds of getting a loan from traditional sources are simply stacked against you. Maybe your business is new, your industry is struggling, or you didn’t meet some other requirements. You can get creative to raise the funding you need.
- Short-term loans: short-term loans are perfect for meeting short-term financing needs. If your business has a strong cashflow, short-term loans are probably the fastest routes for getting industry funding with minimal hassle.
- Invoice factoring: You can borrow money against your account receivables by doing invoice factoring. With invoice factoring, a lender gives you money against your unpaid invoices (minus a fee)
- Customer financing: if your business serves a sort of independent contractor to a much larger business, you can get money to keep your business afloat through customer financing. You only need to prove to the customer that they have much to gain by giving you an advance/loan to keep you in business.
Sometimes, you just need the cash to save your business from going under the water and you won’t think twice about borrowing money from the devil himself. If you are in a desperate need for cash, you may want to look at some of the following options. Of course, it’s in your best interest to seek the input of a financial advisor before you take any of these high risk loans.
- Home equity loan: You can get serious funding for your business if you don’t mind taking out a loan against the value of your home equity. Don’t default; otherwise, you’ll be moving out (or become homeless)
- Title loans: you can get a title loan against the value of your car if you have already paid of the auto loan on the car.
- Whole-life insurance: Many people are soaking money away in life insurance policies – you can borrow against your life insurance policy if you have paid a decent amount in premiums over the years. You’ll need to ensure that you don’t terminate the policy, default on the loan, or die until the loan is repaid.