With the emergence of a significant number of startups, the need for funding the various ideas backing these startups has arisen. Most times, the startups find it difficult to support their ideas or continue to be a going concern for the lack of funds.
About less than 50% of new startups survive up to 5 years after their startup, mostly due to lack of funds. For a startup to workout and continue in business, it needs funds to finance its birth. Unlike some fortunate businesses that immediately get seed investors, others would have to seek funding for their businesses on their own from micro-loan offices.
Some of the ways to get startup funding are:
SMALL BUSINESS LOANS:
SBA express loans, microloans, and traditional SBA loans give small businesses direct loans to enable them to profit. To be eligible for this type of loan, the business owner must have invested their equity funds and serviced a microloan for at least one year.
CROWDFUNDING: This is a more recent funding method, gaining traction for some time now. For crowdfunding, the business owner puts up his business on a crowdfunding platform mentioning the business’s objectives and aims (expected profitability of the business can also be declared). Then prospective funder can assess your business, and if it appeals to them, they can throw in some money to fund it. In this method, major professional funders may be excluded as funding is generally thrown into ordinary people’s hands.
FRIENDS AND FAMILY:
Asking friends and family for money to help your business isn’t a new concept. While the owner bootstraps the business, contributions from friends and family can go a long way in keeping the business going. Sometimes, these contributions even end up making the company succeed in the long run.
INCUBATORS AND ACCELERATORS:
Incubators or accelerators are small communal workspaces that provide funding and mentorship for small new businesses. They guide them on how best to run their business, even keeping them out of troubles they envisage the business owners might face in running their business.
VENTURE CAPITALISTS AND ANGEL INVESTORS:
These consist majorly of bigger businesses or individuals who invest in smaller businesses for a chance to own shares in the smaller company. Angel investors have helped plenty of startups grow and thrive with their influx of funds. But to get their investments, the small business would have to pitch their idea or business aim to the venture capitalist or Angel investor to which they must buy into.
Getting startup funding for small businesses isn’t as difficult as it used to be. With the right idea and guidance, almost any place these days can quickly get on their feet with monies that they can source from any of the above ways, which would greatly help them.