Getting funding
Option 1: Funding from investors
Investors can give you funding to start your business or help take it to the next stage. This type of funding may take the form of venture capital or angel investing.
Venture capitalists may offer loans to businesses in exchange for partial ownership and or an active role in the company. Each venture capitalist and angel investor has their own criteria and requirements for making an investment. But no matter who you ask for an investment, be prepared for the investor to carefully review your business plan, finances and experience.
Option 3: Self financing Using your own money may be an option. Perhaps you tap into your savings, money from your current job, or a retirement account. If you’re a homeowner, you may be able to use your home to take out a new loan. Self financing offers you the greatest control over your business, but it may be riskier.
Option 1: Getting a small business loan Many financial institutions offer loans for starting or running a small business. Be sure to shop around to compare interest rates, repayment terms and loan amounts. When you apply for a loan, lenders may require you to show your business plan and a variety of financial documents. These could include bank statements and tax returns from the previous few years. If you’re starting a new business, your own finances and credit could be a factor in the lender’s decision.
Financial institutions: Your financial institution will likely have a variety of options to help you fund a business, including loans or business credit products. You’ll want to have a business plan, estimate of startup costs, and business projection completed to help a bank understand why offering you a loan is a good idea.
Alternative lenders: If funding from a bank isn’t available, you’ve still got options. You could explore crowdfunding, peer to peer lending, or look into micro lending. Alternative lenders could also include friends or family that are interested in investing in your business.