5 Ways to Get the Startup Capital You Need

Startup Capital You Need

Starting a business takes a lot of hard work and money. There are many ways you can get the startup capital you need to get your dream business off the ground.

1. Get Loans

It's not uncommon to hear new business owners using personal loans to help launch a startup, but these loans can be difficult to obtain if you have no collateral like a house or a car. If you don't have collateral, you can find a co-signer who'll agree to be responsible for the debt if you end up defaulting. Another option is a personal loan. Many private lenders offer Corpus Christi loans and similar financial products in other cities. You could also look at a loan backed by the Small Business Administration, which carries fewer risks but more restrictions on who can get one. Microlending is also a good option.

2. Tap Into Your Personal Savings

This is another easy and popular method for financing your startup. It's not for everyone, but anyone with family inheritance, substantial checking account, or old money market account can tap into them to pay for some of the necessary startup costs. This is often used alongside other methods to reduce risk if something unexpected happens. Tapping savings can also mean selling unnecessary assets like heirlooms, stocks, or bonds. If you trade stocks, be sure to take any capital gains tax issues into account.

3. Use Credit Cards

If you have good credit, another way you can get startup capital is to use credit cards. They're a quick way to purchase the items you need to get your business off the ground. However, they do have relatively high-interest rates on any unpaid balances when the bills arrive. On average, someone with good credit will pay between 13-18% interest. If they miss a payment, however, the interest jumps to as high as 30%.

If you only need the money for 18 months or less, consider a card with a 0% introductory APR. Cards offering rewards or cashback for purchases can also be a big help while you wait for your business to become profitable enough to pay down the debt.

4. Find an Angel Investor

Angel investors like to invest in startups without some of the demands that venture capitalists insist on. Since most angel investors invest in fields similar to their own, many of them can even guide how to succeed. They aren't always easy to find, but there are angel investing networks online that you can look through. You'll need to show them that you've got what it takes, for they only do a few deals a year for people that they have confidence in.

5. Crowdfund Your Business

This is a newer option that can be quite lucrative if you make the right pitch. Many people have made millions of dollars for their projects via crowdfunding, but you need to know how it works. First, keep in mind that crowdfunding sites keep going by taking a cut of any successful crowdfunding efforts. Second, many platforms will hold the money until your specific target gets met. Third, people won't fund your project if you don't show them what's in it for them.

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