20 Places You Can Raise Funding for Your Business

In business, whether a startup or an established one, you will at one point or another require funding. Where and how you finance your business will to a large extent determine its success or failure. Here are 20 ways of raising capital for your business.

  1. Friends and Family Contributions

If you are lucky to have friends and family members who are able to contribute to your business, they are the most reliable. They may never ask you for security, and sometimes, may agree to sell their interest in the business back to you at a nominal fee.

  1. Customers

Customers can give you the money you need on reasonable conditions, mostly in terms of advance payments for future goods or services. Dileep Rao writes in The Bootstrap to Billions that many entrepreneurs have managed to grow their businesses with customer funding.

  1. Suppliers

Your suppliers could help you grow your business by reducing reliance on your financiers who may be a threat to your independence. However, you should be careful that the suppliers do not enslave you either.

  1. Bank Loans

Banks will always be willing to give you short-term, mid-term and long-term loans depending on your needs. However, they will require some sort of security to secure the payment of the debt plus interest.

  1. Smart Leases

With limited finances, you do not need to buy every asset that you need to run your business. leasing is a great way of conserving money for your working capital. However, you should be careful not to spend so much money in leasing, which would otherwise be sufficient to buy the assets leased.

  1. Personal Savings

Before you start a business, it will be prudent to save some money so that you do not rely entirely on financiers. You may also need to run the business without taking a salary until it stabilizes.

  1. Hedge Funds

Hedge funds pool capital from an accredited individual or institutional investors. Hedge funds invest in various assets usually with complex portfolio construction and risk management techniques.

  1. Mutual funds

Mutual funds are professionally managed investment funds that pool money from different investors to purchase securities. Mutual funds may take the form of open-end funds, closed-end funds, unit investment trusts and exchange-traded funds.

  1. Venture Capital

Venture capital is a form of equity financing available to early stage emerging firms. Your firm must have demonstrable high growth potential to attract venture capital funding.

  1. Seed Money

Seed money refers to a form of securities offering where an investor puts in capital in exchange for equity in the business. It’s one of the early stage funding options.

  1. Participating in Startup Competitions

Participating and winning startup competitions would be a great way of getting capital for your business as winning startups are usually funded.

  1. University Funds

Some universities give grants to entrepreneurs with winning ideas. This will be even more of a reality if you get a business idea while still in the university.

  1. Pay to Work Programme

Once you have a bright business idea, you can ask people to make a capital contribution in return for a senior position in the firm.

  1. Crowdfunding

There are several platforms where you can create your crowdfunding campaign. Examples include Kickstarter, Indiegogo and Go Get Funding.

  1. Peer-to-Peer Lending

Peer-to-peer lending involves a group of people coming together to lend money to each other. You can look for an entrepreneur peer who is willing to fund ideas similar to yours.  

  1. Sell Excess Items

If you have items that are simply lying in the house and serving no purpose, you could sell them off and gets some capital.

  1. Letting out your House

Letting out your house will definitely give you that much needed startup capital. If you have a bigger house than you need, why not let it out?

  1. Online Lending

There are several online lending service providers. Good examples are Kabbage and OnDeck. These online lenders will process your application within hours as opposed to traditional lenders.

  1. Retirement funds

Retirement funds constitute substantial savings which you can use to start or expand your existing business. Other people would also be willing to lend you part of their retirement funds depending on how well you relate to them.

  1. Government funding

Different governments set aside some money to fund worthy causes such as new technologies. If your government has such a programme, it will be a good source of funding for your business. An example is the US government programme.

Angela Scott-Briggs: Editor : Over 15 Years Experience of Working in the Business Sector | Interested in Innovations in Business and Technology .
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