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6 Ways to finance your START-UP

One major issue that comes up in any startup venture is money. Getting enough funding for your startup is one obstacle that you have to overcome before you go on to marketing your products or services.

It is therefore important to carefully consider the various sources of capital in order to settle for one that best suits the context of your business. There are many potential ways of funding a startup. Here are 6 ways to finance your startup that are practical.

PayPal working capital.
PayPal working capital is a financing plan that gives businesses access to the funding they need in a much faster and easier way than your traditional loans. The beauty of this financing option is that it is a business loan with quite an affordable fixed rate. The processing is quite fast; once your request is processed based on your peak sales account activity and you are proven eligible, the funds are transferred to your account within minutes. There are no periodic bills, late payment fees, penalty fees or interest charges.
The process is as easy as selecting your loan amount, choosing the percentage of your sales that will go towards repayment and getting the funds into your account in no time. The payments are done through an automatic deduction on your sales revenue done through PayPal.

Friends and family.
Most startups get their first customers from family and existing networks. This very same principle is also applicable to getting funding for your business. There are thousands of businesses that have gone on to success after raising money from friends and family. The beauty of this is that you may get money that you do not need to refund. In the event the money will be loaned to you, it is unlikely that there will be any interest. The best practice is to go out and ask, it will be surprising just how many people are willing to help.

Bank loans.
If you have a good credit history as a person, you can access some decent loan. You can also choose to put some assets on the line as collateral to secure finances inform of a bank loan. When getting the bank loan, it is important that you get acquainted with all the ramifications of the loan. Read the fine print and know all that is required to know. Bank loans are however good for startups that are already up and running and have a good revenue from which you can repay the loan.

Private lenders.
There are many private lending financial institutions that are ready to offer financial help for your business. This way, you don’t have to borrow from family or get involved in government startup schemes. Just be sure to do a proper research since not all private lenders are created equal.

Credit Cards.
If you need financing urgently, a quick option is to draw from your credit card. It is however important to use your own credit card. Be sure you can repay the credit you get this way because such facilities are high-interest lending facilities especially when there is a late payment.
Take note that credit cards are a short term option. Taking longer to pay may send your credit standing to the gutter.

Personal savings.
Most people don’t think this to be very creative. It is surprising that not most entrepreneurs don’t think about saving before starting a business or using their savings to starts a venture. Any investor I know will easily put money into something they know will pay off. If you are looking to start a business in the future, you can start putting away percentages of your income towards the startup.

Raising capital for your business is an inevitable step for any business. It is therefore imperative to carefully consider the available channels of funding. If you choose to bring in an external investor, be sure to draft a good shareholders agreement, one that will protect you and your control over the business. It may be advisable to get professional legal help whenever you have to handle legal documentation for financing. Some of the funding options are friendly to a business that is already up and running; to develop products and do marketing or expand, while other channels are good enough when you are starting from scratch.