Modern entrepreneurs have unparalleled access to startup financing, but how do you know what option is right for you? Here are some alternative ways to get capital that do not require a bank loan.
Take Advantage of Crowdfunding
Connecting with people online might seem unconventional, but crowdfunding is on the rise for business owners who know how to promote a cause. Furthermore, crowdfunding sites are usually free and offer unlimited campaign support. You will have full control over your fundraiser and you can run multiple campaigns until your reach your startup goal.
Defer Vendor Payments
If you have good credit, many manufacturers will supply you with inventory and defer the payment for several months. This gives you time to sell products and keeps your store stocked for returning customers. As long as you make the scheduled payments, you will never run out of inventory despite fluctuating levels of demand.
Use Purchase Order Financing for Growth
Is the reputation of your business generating more interest than you initially anticipated? With purchase order financing, you don’t have to say no to well-known clients or large projects. If the order is guaranteed, PO financing sends funds to a supplier and you can continue building without interruption. However, you and your team still get the glory for performing the work and delivering the goods.
Apply for a Personal Line of Credit
For those who like to be in control, a personal credit line is easy to manage with low monthly payments. You can even use credit cards as a form of startup financing, but remember to budget carefully. Focus on the necessities until you are able to generate regular income. Ideally, you should pay the balance of each card before expanding the reach of your business.
Ask Your Support Network
Who do you turn to when you feel excited, anxious or thoughtful? Do you rely on friends or family members for motivation and guidance? Asking loved ones for money might seem awkward, but many business owners find financial support from relatives with bridge loans and promissory notes. This also means you won’t have to document revenue, assets or expenses unless your benefactor specifically requests information.
No matter how you approach startup financing for your business, there is always a solution for clever entrepreneurs. Don’t be discouraged by traditional lenders. Instead, find a way to cut directly through the red tape and get qualified for alternative forms of financing.