5 Ways in Which You Can Fund Your Business without Taking on Investors
When you are planning to set up your business a lot of thought-provoking decisions need to be taken. It is obvious that profits would not start coming in the first few months. Hence the money that has been invested has little chances of being returned so easily. When you take up money from angel investors naturally then you have a lot of answering back to do.
The least you want is to keep telling them about the status of your projects and product launches at every step of the business set up. However, you would be surprised to know that many businesses have become successful just with a small investment of $10,000. Here are 5 ways in which you can fund your business without help from angel investors.
Bootstrapping
The first and most easy technique in the market is to associate with other similar start-ups and try to barter the facilities with each other. Doing that would keep your set-up costs minimized and you could also gain from each other’s expertise. Bootstrapping could start with some shared space that you can arrange with others, thus reducing your operational investment.
Apart from that marketing services can be exchanged in return for any other from your side. A large number of organizations are using this technique as being online is becoming the most important criteria for staying in touch. Even a few dollars investment is sufficient to get you success in the long term provided you know how to harness it.
Payday loans
Taking a payday loan can infuse you with some cash just before an impending payment you may have to make. An entrepreneur who has started can benefit by taking short term payday loans as that relieves him of any big impact of financial crunch for that time being.
Moreover, the loans are approved quickly so if you have any sudden requirement you would still be able to cater to it without getting panicked over it. However, before taking a payday loan, you must trust only the most reputed payday loan companies for the same.
https://www.netpayadvance.com is one such website that deals with payday loans and gives you the comfort of tackling any untoward expenses at ease. They offer you small term payday loans so doing the repayment is not an issue and if you are regular with the payments you can hope for more assistance from their side in the future.
Credit card
If you have had a secure credit history till now, you may not need to panic at all. You can easily maintain an extra credit limit on all your cards and pay when the situation is a little better for you. However, it is better not to take a loan to the entire credit limit in one go. Take only up to 35% of the overall credit limit to avoid getting trapped in case your financial situation does not improve.
In case you go over 35% and are unable to pay your credit score would be hurt. That is not an ideal situation for anyone and it is always wise to stay away from it. You could also use both your personal and business credit cards and thus generate more money than what you were expecting. Since both would be registered to separate entities taking money against them would not be a very big problem to tackle.
Ask the family for help
A lot of entrepreneurs look for assistance from their family and friends when it comes to a financial need. This is especially useful when you know people who would be interested in guiding and bailing you out. You could take short- or long-term loans from such people. In return, these people may be offered a share of your company. Though this seems an easy option, it is not so.
This is because family members and friends would want their money back and you cannot dissuade not paying them for long. They won’t be able to understand the risks involved and thus you should first explain the same to them before going ahead. Such loans may make or break relationships hence it is always better to be clear about the payment terms before you proceed with the same.
Using assets for finance
Though doing this is not a very good idea, if you are sure of getting successful, you may attempt the same. You may take a second mortgage on your home but that can be done only if you have full ownership of it.
Apart from that you could release the equity on some of your existing assets and sell those which you feel are not so important, like shares of any other company. Doing that would give you some immediate money in hand to set up the business. There would be no creditors involved and you keep yourself away from the trauma of their unnecessary demands to deliver results.
However, remember that things can go wrong in this case. If you have taken a second mortgage on the home, there are chances you might lose your home if you are unable to make the payments on time. You might also have to file for bankruptcy in case a situation like that arises. Hence it is always advisable to use only these assets whose sale is not going to hamper your financial status as such.
Conclusion
When starting a new business, any wrong decision can complicate matters for you. However, using the above methods you can stay away from the clutches of angel investors and their bickering. But, all the above solutions have their terms and conditions so it is always better to weigh the entire benefit before going for any of them.
A payday loan is easy to procure and if you join with a trustworthy company, it can help you stay afloat in the most trying of times too. Taking a payday loan keeps your financial status on the plus side even when the profits are not coming. Plus you do not have to deal with the stress of convincing any external investors again and again.
