Step 4: Fund Your Dream

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Funding Your Business

How to raise funds is one of the most important financial choices you will make as a business owner. Not only will it impact your balance sheet, it may also affect the way you will eventually make decisions for your business. Understanding and knowing your options to raise funds can help you figure out what works best for you and your business. Make sure you have a good estimate of how much start-up funding you’ll need. Check out Know your Start-up Costs if you need help.

Key options to obtain funds for your business:

1. Self-Funding

Otherwise known as bootstrapping, this option lets you leverage your financial resources to support your business.Using your own funds lets you retain complete control and ownership over your business while taking on all the risks yourself. Although most see this as the best option to start a business, it can take the longest to achieve depending on the resources you have available. If you are keen on funding your business, best to start saving for this as soon as you can. Check out different ways we can help you set it up, see our solutions below.

2. Crowdfunding

This option raises funds from a large number of people, called crowdfunders. These crowdfunders aren’t technically investors and don’t receive any shares in your business. It’s one of the more popular methods to raise funds because it is low risk and allows you to retain complete control of your company. And in case your plan fails, you are not obliged to repay your crowdfunders. There are numerous crowdfunding platforms available. Make sure to read the fine print and understand your full financial and legal obligations before signing up. To get the buy-in from these crowdfunders, make sure you clearly present your business potential, current market landscape, and competitors. Visit Find the Next Big Thing if you need help fine-tuning.

3. Loan or Line of Credit

If you don’t have enough time and funds to start your business, or want to manage your cash flow by reducing the burden of a one-time cashout, you may want to consider getting a loan or line of credit. This option can give you the immediate funds you need to launch your business. There are generally two types of loans — unsecured and secured. Usually, unsecured loans are more accessible to avail but are more short-term and have higher interest rates. They are called unsecured because these loans do not require any collateral. On the other hand, secured loans allow you to borrow larger amounts for longer terms with lower rates and require collateral which can be in the form of property, vehicle, or cash. Unsure which loan best fits your needs and requirements, check our options below.

Ways to Raise Funds

When you have your eyes set on the future of your business it’s good practice to set aside funds for expansion and growth. However, some opportunities can come to you unplanned and without warning. Whatever your reason is to raise funds, it’s good to know your options and how to prepare for them.